Am I Understanding Form 709 And The Gift Tax Rules Correctly?

[JohnASmith]

My wife and I gifted jointly $158,000 of value to our son and daughter-in-law in 2022.

My understanding is that my wife and I must separately file our own form 709 showing our share of the total gift.  The 2022 gift amount would be $79,000 from each of us.   Both recipients can be on each of our individual form 709.  For tax year 2022 my wife and I each are allowed a $32,000 exclusion.  The balance of $47,000 for each of us can be applied to our individual lifetime exclusion.   We have never done this before so there is no carryforward.  So far, am I on track?  Any thoughts or suggestions will be greatly appreciated.    

[tagteam · Accepted solution]

If you do a Google search using the search terms below, you should see a listing for Form 709 preparation that costs roughly $50. You might want to give that a shot since the form is more difficult to navigate than it first appears.

"709 online us gift tax software 2022 now available"

[JohnASmith]

I had no idea anything like that was available, I will check it out.  Thank you. 

[JohnASmith]

Do you see any downside to me showing the gift only from me to my son and daughter-in-law? I know the exemption would only be $32k, but I'm 74 and my estate will be a fraction of my lifetime exemption.  That way I could file only one 709. 

[tagteam]

I am not sure I understand you query. You only need to file one Form 709 for the calendar year.

[JohnASmith]

I was under the impression that my wife and I have to file the 709 individually in order for each get a $32k exemption.  The 709 doesn't seem to allow joint filing.  

[tagteam]

What I meant was that you file one 709 (individually) for any particular calendar year.

[JohnASmith]

While studying the Form 709 further I now see  that I was advised wrongly, on another site, that my wife and I had to file our own Form 709 for our share of a gift.  Now it seems clear that we can jointly gift community property on one form.   I understand why Tagteam found my question confusing.  Thanks for sticking with me Tagteam.   You've been a great help.  

[KrisD15]

Form 709 does not allow "Joint" filing. Even if you are splitting a gift between you and your spouse, you each report Form 709, but the two forms should be mailed to the IRS in the same envelope.

If you are splitting a gift between you and your spouse, you must each consent on one-another's Form 709 and agree to have the gift amount split. 

You have the option of claiming the entire amount of the gift and file only one Form 709. 

If the anticipated worth of you and your wife's estates is such that the lifetime limit is of no concern, and filing only one Form 709 is appealing, file just one Form 709 for the gift as made by one Taxpayer. 

According to the IRS:

“A married couple may not file a joint gift tax return. However, if after reading the instructions below, you and your spouse agree to split your gifts, you should file both of your individual gift tax returns together (that is, in the same envelope) to help the IRS process the returns and to avoid correspondence from the IRS.”

Form 709 

@JohnASmith

[JohnASmith]

Now I am back to confused :(  Our estate will be a fraction of the lifetime exemption, so I'm back to thinking that it would be safer to just show the gift as being from me with my wife approving it, per the form.  

Another question: There's only space to enter one "Donee" on Schedule A, but line 10 of Form 709 asks "Enter the total number of Donees listed on schedule A".  Another post said you use Schedule A Addendum for additional donees.   Where do I find a Schedule A Addendum?  

[tagteam]

There are four lines on Schedule A. You can use another one if you have more donees.

[jliu229]

The Schedule A is only for one donee. If I have more than one donees, should I use two Schedule A forms? Thanks

[tagteam]

---

@jliu229 wrote:

The Schedule A is only for one donee. If I have more than one donees, should I use two Schedule A forms? Thanks

---

There are four. 

If you need more space, attach a separate sheet using the same format as Schedule A.

See https://www.irs.gov/instructions/i709#en_US_2023_publink16784xd0e1445