Form 709 Schedule B line 1c : Should we just add applicable credit for all the years?

[johnsantaclara]

Hi there,

In Form 709, I am entering info for each of the prior years  2018 and 2019 in Schedule B, column C. I referred to “Table of Basic Exclusion and Credit Amounts”  and entered 4,417,800 for 2018 and 4,505,800 for 2019.

Now I entered 4,417,800+4,505,800= 8923600 in Line 1 Column C: Totals for prior periods.

Is the above correct?

Then in Part 1: General information line 8=8923600 and line 7= 4,577,800 Is this correct?

Now for line 9: [Line 7 - line 8] =  4,577,800  - 8923600  = -4345800. Is this correct? It says don't enter numbers less than 0, so should I enter 0 for line 9?

Thank you!

[M-MTax]

There's an online calculator that may help....https://www.taxformcalculator.com/calculator/709.html......but this thing gets wicked complicated and you should get help from a tax pro when you're preparing this form....the IRS has a lower tolerance for any mistakes on this form than any other and it only comes back to bite years down the road.

[johnsantaclara]

Thank you so very much! That calculator is super helpful. I wasn't aware of that earlier. I tried the calculator and ran into following questions. Thanks a lot again!

1) As in screen shot below as an example, Line 3 of Item 19 says "Total taxable gifts. Add lines 1 and 2", but it doesn't add because 110+14= 124 and not 102.. Wondering how it is coming up with that calculation.

2) The calculator also fills 0 from line 4 onwards exception for line 8. Are we not expected to compute the tax using Table for computing gift tax?

[LenaH]

Please see my comments below regarding your Form 709 gift tax questions :

1. It is hard to recreate your exact situation from your screenshot since I do not know what was entered on the backup schedules that support Line 1 and Line 2. However, the website used may not work correctly if you entered $22 in any gift or part of a gift that qualified for the political, educational, or medical exclusions. Otherwise, Line 3 is supposed to sum Line 1 and Line 2 correctly. 
2. As stated in 2020 Instructions Form 709, page 18, the tax table should be used to compute the gift tax for the amount on Line 3 and the amount on Line 2. However, the amounts entered in Line 2 and Line 3 are under the taxable amount.  

 

@johnsantaclara

[johnsantaclara]

Thank you.