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GotNoName
Returning Member

How to fill out Form 709

So here goes. Will try to keep this simple.

1) I gave my son and daughter a gift of 20k each.

2) can I use one form or one need form for each gift.

3) I live in WA and plan on not splitting gifts since we are a community property state. Is this, ok?

4) From what I see in form and instructions, I owe $900 per gift. Is this correct?

5) I also see that this would apply to lifetime deductions. Any clarification on how and steps in form I need to fill out.

Just spent 4 hours on my phone waiting of IRS to help. That didn`t work. Trying to avoid this again. 

Any help would be appreciated

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8 Replies

How to fill out Form 709

TurboTax does not support Form 709 and professional guidance is recommended.

 

Regardless, you can prepare and file one 709 for the two gifts (just list them separately in Schedule A).

 

You should not owe any gift tax unless you exceeded your lifetime exclusion ($11,700,000 in 2021) so, if you owe tax you most likely did not enter your basic credit amount on the form.

 

See https://www.irs.gov/instructions/i709#en_US_2021_publink16784xd0e197

 

If the gift is of community property, then the gift is considered made one-half by each spouse.

How to fill out Form 709

line 7 of the tax computation is where you enter the lower of your unused lifetime exemption or the taxable amount of gifts

 

GotNoName
Returning Member

How to fill out Form 709

Thanks for all the reply's. Got this finally figured out and for completed. Found a tutorial on U-Tube that was excellent and easy to follow. The only thing I want to add here is the lifetime exemption is 4,625,800.00 not the 11,700,00 million number. This is on the next page, page 20, in the top left column just below the table for gift tax calculation. I had to read the instructions form a few times before I felt that I understood all the legal BS in the instructions form. If I gift again, I see that will require the resurrection of the filled-out form and a little more work will be needed the next time. Always keep gift under 15K is a lesson learned if you want to keep taxes simple.

How to fill out Form 709

It's $11 million. you're looking at an old post. there are many on the web. they never get removed so be wary. for up to date tax info and form instructions, you can use the IRS website. however, look at the year because not all 2021 instructions are live. just type in the form number.

https://www.irs.gov/

 

 

What Is the Lifetime Gift Tax Exemption? For 2021, the lifetime gift tax exemption is $11.7 million. This means that you can give up to $11.7 million in gifts over the course of your lifetime without ever having to pay gift tax on it.

 

How to fill out Form 709


@GotNoName wrote:

The only thing I want to add here is the lifetime exemption is 4,625,800.00 not the 11,700,00...


No, the $4,625,800 is the basic credit amount while the $11,700,000 is the lifetime exclusion.

How to fill out Form 709


@Mike9241 wrote:

It's $11 million. you're looking at an old post. there are many on the web.


Actually, @GotNoName is looking at the applicable credit (formerly unified credit) instead of the basic exclusion amount. 

 

The applicable credit is the tentative tax on the applicable exclusion amount.

GotNoName
Returning Member

How to fill out Form 709

So, if I do not have a deceased spouse yet or RTA amount, then I can use the 11,700,000 credit. The way I read this was if I did not use those 2 items then I must use the lower amount. Either way I will not have to pay a gift tax. I just need to make sure form is filled out correctly so I do not trigger audit since I will have to send my return instead of electronically filing with Turbo Tax

GotNoName
Returning Member

How to fill out Form 709

Actually, @dumbass1 is looking at the applicable credit (formerly unified credit) instead of the basic exclusion amount. 

 

The applicable credit is the tentative tax on the applicable exclusion amount.

 

So is the 11,7000,000 correct or my original value of 4,625,8000 what should be entered on line 7

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