Form 709 Gift Tax Return - Include Spouses Gifting Question

[Romper]

I know TurboTax does not support Form 709 but hoping someone will know the answer.

The provider of the software I use for Form 709 has made a change to the 2020 version of Form 709 that does not seem correct. I spoke to them and was told that I may be correct but CPA's told him they don't follow the rule.

Feedback please...

1. With split gifts, should the spouse's gifting be included on Page 3, Part 4, Line 1?
2. Am I interpreting the instructions incorrectly?

On Page 3, Part 4, Line 1.

- Line 1 on the 2020 version now includes the gifts by the donor, as well as the spouse.

- On the 2019 version it only includes the gifts by the donor. The spouse's gifts are not included.

- Line 1 states "value of gifts of DONOR", "Add totals from column H of Parts 1,2,3"

The instructions for Part 4 (Page 11) - Taxable Gift Reconciliation seem to be quite clear:

Line 1 (Instructions for 2020, page 11)

• Enter only gifts of the DONOR. If gift splitting has been elected, enter only the value of the gift that is attributable to the spouse that is filing the return.

[Anonymous_]

Are you still confused about this topic or the instructions? Which software are you using?

[Romper]

Thanks for responding...

The issue is:

To me, the instructions for split gifts on Form 709, Page 3, Part 4, Line 1 are quite clear yet the software provider has added the spouses split gifts beginning with the 2020 return. 

• Page 11, Part 4 - Taxable Gift Reconciliation. Enter only gifts of the DONOR. If gift splitting has been elected, enter only the value of the gift that is attributable to the spouse that is filing the return.

The questions are:

1. Am I missing something obvious?

2. What is the argument that the spouses gifting should be included?

I'd rather not identify the provider since I may be mistaken.

[Romper]

Noting my earlier question:

The instructions for Form 709, Page 3, Part 4, Line 1 seem quite clear that only the DONORS gifts are to be reported on Line 1 yet the software provider has added the spouses split gifts to Line 1 beginning with the 2020 return.

Can anyone provide documentation that the spouses gifting is required to be included on Form 709, Page 3, Part 4, Line 1?

[ReneeM7122]

The reason TurboTax has you split the gift with your spouse is because otherwise, Each spouse must file a separate return if he or she makes any taxable gifts. You can, however, choose to “split” gifts with your spouse. Making a split gift allows you to take advantage of your annual gift tax exclusion plus your spouse's exclusion for a gift that is made entirely by you.

Here is a TurboTax article about gift splitting.

The instructions for form 709 state as follows with regards to spouses and gifts:  (See line #8, as it corresponds to Form 709, Page 3, Part 4, Line 1.)

1. Determine whether you are required to file Form 709.

2. Determine what gifts you must report.

3. Decide whether you and your spouse, if any, will elect to split gifts for the year.

4. Complete lines 1 through 19 of Part 1—General Information.

5. List each gift on Part 1, 2, or 3 of Schedule A, as appropriate.

6. Complete Schedules B, C, and D, as applicable.

7. If the gift was listed on Part 2 or 3 of Schedule A, complete the necessary portions of Schedule D.

8. Complete Schedule A, Part 4.  

9. Complete Part 2—Tax Computation.

10. Sign and date the return.

.Make sure to complete page 1 and the applicable schedules in their entirety. Returns filed without entries in each field will not be processed..

.Remember, if you are splitting gifts, your spouse must sign line 18 in Part 1—General Information..

@Romper

[Romper]

Thankyou for your reply. Perhaps I missed it, but I don't see an answer addressing my question.

Specifically:

Page 11 of the instructions for 2020 Form 709, Page 3, Part 4, Line 1 seem quite clear:

Enter only gifts of the donor. If gift splitting has been elected, enter only the value of the gift that is attributable to the spouse that is filing the return.

Of the examples I can find with split gifts, many are adding the spouse's gift to the donor's gift on Line 1. Why?

Can anyone provide documentation that the spouses gifting is required to be included on Form 709, Page 3, Part 4, Line 1?

[M-MTax]

That line says to add lines 1 and 2 and 3 in column H so there's your answer. If not, then why does the form have you split the gift in half for both spouses on the schedule above that part?

[Romper]

Thanks but the instructions for split gifts are:

Page 11 of the 2020 instructions for Form 709, Page 3, Part 4, Line 1 are quite clear:

Enter only gifts of the donor. If gift splitting has been elected, enter only the value of the gift that is attributable to the spouse that is filing the return.

Also, Line 1 on Part 4 states "Total value of gifts of DONOR"

[M-MTax]

Wouldn't be the first time the instructions conflicted with the form. Look at the form itself.

[Romper]

It seems the instructions are provided to give direction.

Line 1 states "Total value of gifts of DONOR". Nothing more.

[M-MTax]

Why don't you call the IRS? Either that or use a tax pro. The instructions have been wrong before and the IRS had to correct them. 

[Romper]

I was hoping to find an expert that could find documentation that would override the instructions. It seems such a basic question yet no one has been able to.

I've seen examples by the pros that do it both ways. 

[M-MTax]

I've seen examples by the pros that do it both ways. 

Yep, and you won't find an expert that has ANY documentation that would override the instructions.....there is no law or regulation.....the forms and instructions are designed and produced by the IRS and there's no code section or regulation that controls that.

[Romper]

Thanks - If it were you, would agree that the instructions state to only include the donors gifts on line 1 for Split Gifts or would you add them anyway even though adding the spouse's gifts will increase your Taxable gifts on Line 11.

[M-MTax]

Read the instructions for line 2 and you'll discover that the math is wrong no matter what you do. I'd add them and include a statement with the returns.