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How far back can you go when filing the form 709 when the gift is under the exclusion limit for that year? E.g Can I now file form 709 for the year 2019's cash gift ($15,000) and add that to the $16,000 gift in 2022 for a total gift of $31,000 transferred to the child's account now ?
Each tax year (which is a calendar year in this instance) stands on its own with respect to the annual exclusion (hence the term).
If you need to file a return for a particular year, you would simply file a 709 for that year alone. You would not add that year's exclusion amount to a subsequent year.
I am not adding that amount to a subsequent year. Just transferring that amount to a brokerage account of the child. Since the child was under 5 we had not created a brokerage account for the child but had just set aside the money as cash so far. The money set aside was under the limit for that year, so technically 709 was not even required to be filed. But I want to do it for documentation purposes so there is no issue later.
Yes, you can file for that year despite the fact that it is not required.
You are such an expert on this! Can you please help me with my question? In year 2021, I transferred my company's RSU to my daughter's account as gift. The transferred RSU market value on that day was $28000. I figured half shall be counted from me and half from my husband and therefore $28000 is below the $30000 of IRS limit for year 2021. Therefore, I did not file form709 for year 2021. I did the same thing for year 2022($30000 worth of RSU) and year 2023($32000 worth of RSU).
Now I'm preparing to file tax for year 2023 and suddenly learned about form 709 for Gift Splitting regardless of the gift amount. Now I'm panic: shall I file form 709 for gift splitting for year 2021 and 2022 before I move on for year 2023? How shall I operate? Is it too late to file gift splitting for year 2021? Thank you so much in advance!
https://www.law.cornell.edu/uscode/text/26/6651
It doesn't really matter for the purposes of Form 709 since any late fees are based on the tax due and there would be no tax due for those tax years.
Thank you so much for the prompt reply!
I'm not worried about penalty because I have read all your previous responses on the topic and known that I would not pay penalty. I'm more looking for the best way to avoid possible trouble in future, especially when I'm gone. Thank you again!
Just so to confirm what I have learned: It's better to file form 709 for year 2021/2022 and 2023 to avoid possible trouble in future, right? Any possible negative consequences from filing them then?
The requirements for filing gift tax returns is what it is. Since you were exempt for filing Form 709 gift tax returns for all those 3 years because you were under the filing requirements.
In 2021, $15,000 and less per donor spouse was the gift tax filing exclusion and you gifted $28,000 in rsu's between both your spouses so you met the exemption requirement. $16,000 and less per donor spouse in 2022 and you gifted $30,000 between both of your spouses so once again you met the exemption requirement.
And finally in 2023, $17,000 and less per donor spouses and you gifted $32,000 between both of your spouses
so you are again exempt from the 709 gift tax filing requirement.
Also remember that both you and your husband must agree to the gift and you both must file a joint tax return.
So there is no confusion here, there is no such thing as a joint gift tax return (Form 709).
When splitting gifts, each (married) party files their own 709 which should be mailed together in the same envelope.
AbrahamT Actually I'm NOT exempt for filing Form 709 gift tax returns for all those 3 years because gift splitting was used between my husband and I. My understanding is, as long as gift splitting is involved between a couple, then form 709 must be filed by each one of the couple, regardless of the gift amount.
@WendyNull Yes, as long as the gift is more than the annual exclusion amount.
tagteam Just to clarify, this is my understanding: even when gift is less than the annual exclusion amount. as long as gift splitting is involved, each of the couple is expected to file form 709, for gift splitting.
@WendyNull The annual exclusion amount is per person, per donee. If you, personally, exceed that amount you can split the gift. You and your husband file separate returns (709) and mail them to the IRS in the same envelope.
I have never filed a 709 for either of my two, now adult, children. Using the maximum amount for a gift from me and my wife, we should have filed a 709, for at least years 2016, 2018, 2022, 2023 for one child and for the other child, 2022 only. And we have been giving gifts, all less than the maximum allowed for all other years 2012-2023. It seems like we still need to report every year, so that the lifetime total per child can be accurately tracked to prove it never exceeded the amount for which taxes must be paid - now over $12 million. We will never even come close to that. So what is best advised? It seems like we should be able to safely ignore and, only if we ever reached that lifetime limit (literally impossible) we would then have to back file. We have all the records, but don't see the point in filing a 709 unless there's some requirement we don't understand. Thanks for any advice. I have been using TurboTax since the '80s.
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