If I am gifting $30,000 per couple, do I need to write out separate checks to each person in the couple, or can I write one check with both names?

[2596]

Just want to clarify.  Does the couple have to have separate check for $15,000 each, or can one check for $30,000 be written to both of them?  ex.  Joe and Sue Smith

[kerriP]

I think to be on the safe side, I would do separate checks.  You did not indicate if the couple is married, but by completing two checks, you have covered yourself.  Also,you can give away $15,000 to as many individuals as you’d like. A husband and wife can each make $15,000 gifts, to one person.  So, a couple could make $15,000 gifts to each of their four grandchildren, for a total of $120,000. 

[mv taxman]

Is there any reason one could not do a direct transfer of funds to the recipient?  i.e.  a couple gifting a child $30,000 and do one transfer from their bank to the child's bank account

also do you have to file anything with IRS for gifts over $10,000 still?  There was a form on IRS website stating this but not clear if this was before they raised the annual gift exclusion limit.  

[DanielV01]

While a single bank transfer from a jointly-held account may be acceptable, it is still probably better practice to at least have separate deposits made, and ideally from separate bank accounts.  It makes substantiation much easier when they are separate, payments, and can eliminate the need for filing two Gift Tax Returns (one for each spouse, since there is no "joint Gift Tax Return") if otherwise neither would be necessary.

The reason why is that if any individual makes a gift that is greater than $15,000 (whether or not the gift is a one-time gift or the cumulative value of all gifts throughout the year), then Form 709 (Gift Tax), must be filed.  As mentioned before, married couples must file separate gift tax returns, but, also mentioned before, each spouse can gift up to the $15,000 limit on individual gifts.  Married couples may also choose to split any gifts that they make from jointly-held property, but this requires separate Gift Tax Returns to be filed, regardless of the gift amount.  

It is a complex subject, and more information can be found at the following link: Instructions for Form 709.  Here are a couple of excerpts from that webpage.  First, note the following (other than the subheadings, bolding is added):

Who Must File

In general. If you are a citizen or resident of the United States, you must file a gift tax return (whether or not any tax is ultimately due) in the following situations.

• If you gave gifts to someone in 2019 totaling more than $15,000 (other than to your spouse), you probably must file Form 709. But see Transfers Not Subject to the Gift Tax and Gifts to Your Spouse, later, for more information on specific gifts that are not taxable.

• Certain gifts, called future interests, are not subject to the $15,000 annual exclusion and you must file Form 709 even if the gift was under $15,000. See Annual Exclusion, later.

• Spouses may not file a joint gift tax return. Each individual is responsible for his or her own Form 709.

• You must file a gift tax return to split gifts with your spouse (regardless of their amount) as described in Part 1—General Information, later.

• If a gift is of community property, it is considered made one-half by each spouse. For example, a gift of $100,000 of community property is considered a gift of $50,000 made by each spouse, and each spouse must file a gift tax return.

• Likewise, each spouse must file a gift tax return if they have made a gift of property held by them as joint tenants or tenants by the entirety.

• Only individuals are required to file gift tax returns. If a trust, estate, partnership, or corporation makes a gift, the individual beneficiaries, partners, or stockholders are considered donors and may be liable for the gift and GST taxes.

• The donor is responsible for paying the gift tax. However, if the donor does not pay the tax, the person receiving the gift may have to pay the tax.

• If a donor dies before filing a return, the donor's executor must file the return.

As noted above, any type of jointly-held marital property that is split between the spouses to gift requires two separate Gift Tax Returns, one for each spouse.  In addition, note these further comments:  

Lines 12–18. Split Gifts

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.

If you and your spouse both consent, all gifts (including gifts of property held with your spouse as joint tenants or tenants by the entirety) either of you makes to third parties during the calendar year will be considered as made one-half by each of you if all of the following apply.

• You and your spouse were married to one another at the time of the gift.

• If divorced or widowed after the gift, you did not remarry during the rest of the calendar year.

• Neither of you was a nonresident not a citizen of the United States at the time of the gift.

• You did not give your spouse a general power of appointment over the property interest transferred.

If you transferred property partly to your spouse and partly to third parties, you can only split the gifts if the interest transferred to the third parties is ascertainable at the time of the gift.

The consent is effective for the entire calendar year; therefore, all gifts made by both you and your spouse to third parties during the calendar year (while you were married) must be split.

If the consent is effective, the liability for the entire gift tax of each spouse is joint and several.

If you meet these requirements and want your gifts to be considered made one-half by you and one-half by your spouse, check the "Yes" box on line 12, complete lines 13 through 17, and have your spouse sign the consent on line 18.

If you are not married or do not wish to split gifts, skip to line 19.

The above is a bit complicated because this information is what is required (among other information) for a married couple to make the election.  Thus, unless the couple lives in a community-property state (where the election will be forced and they have no choice but to file two separate Gift Tax returns), a married couple can avoid all of this filing by making separate gifts within the limits.

[Think57]

Hello DanielV01.  Understand how to complete Form 709 to split gifted amount when gifting to one person.  However, if  a "wired" amount is going to an escrow for a married couple and gifts are to both of the couple, how does one complete the form 709?  The one amount is from two people (married, from a joint account) going to two people, who are married, to their joint escrow account for buying a house.  This is done because the escrow company wants a wired amount over a check, even a cashier's check, and because sending money via wire is expensive (want to send one wire versus up to four separate wires).     Escrow company also prefers funds coming directly from us versus first being gifted to each individual. Thanks for your assistance.

[DanielV01]

@Think 57  Although my answer was from 2019, the gift tax rules have not changed, so the instructions I provided there are still valid.  You'll notice at the beginning I stated that a gift from a joint account may be acceptable, and the same would hold true to gifting to a joint account of a married couple.  The key is to document everything, if the IRS were to request proof.  As proof you can maintain records of the direction provided by the escrow company that shows the intent of the gifting.  

In this situation. each spouse can gift up to $15,000 to each spouse that is receiving the gift before gift tax must be accounted for.  That means total you can gift $60,000 before reporting anything.  But again:  document, document, document.  That's the key.

[Think57]

Thanks DanielV01!!  Have completed the Form 709 and am stuck on only one line in General Information, line #17, which is "Will a gift tax return for this year be filed by your spouse?" Trying to determine if we fall under Exception 1 in the Instructions, which is: 

- Only one spouse made any gifts

- The total value of these gifts to each third-party donee does not exceed $30,000

- All of the gifts were of present interest

A)  Is the "...total value of these gifts..." the value before or after the split?

B)  Are we computing the total value of the gifts across all donees, or is the threshold the total value of all gifts to just one donee?  So if we give $25,000 to our son, and $25,000 to our daughter-in-law, and are splitting the gifts, are we under the $30,000 threshold for having my spouse file a Form 709 Gift Tax Return?

C)  In your Reply, you say "... That means total you can gift $60,000 before reporting anything ...".  Do I understand what you are saying, for this scenario, is that you can gift up $60,000 before a gift tax must be accounted for, however, if you and your spouse are splitting the gift(s), you must still file a Form 709?  That is how I read the section "Who Must File" in the Form 709 Instructions.

Thanks again for your help!!!!

[KrisD15]

A. Before the split. You may gift up to 15,000 per person each. 15,000 from you and 15,000 from your spouse to one person. 

B. Threshold for EACH Donee. Yes, you would be under.

C. True. The two of you can gift 15,000 each to as many people as you want in the year and not file Gift Tax Form 709 until/unless you exceed the lifetime limit of 11.58 million in gifting. 

[X15]

My husband and I have joint checking accounts. We would like to gift our Niece the maximum of $15,000 from each of us for a total of $30,000. Questions:

1. Can we draw the gifts from the same joint bank account?

2. Can we write one check to her or would two check be better?

3. We will be drawing the funds from our IRA, so we will pay the federal and state taxes on them on our end. Will our Niece have to pay any tax or even declare the gifts on her federal or state tax forms (we both live in CA)? We do not want there to be any tax implication for her.

Thank you for your help.

[Critter-3]

1. Can we draw the gifts from the same joint bank account?   You can.

2. Can we write one check to her or would two check be better?  Two would be better... one from each of you. 

3. We will be drawing the funds from our IRA, so we will pay the federal and state taxes on them on our end. Will our Niece have to pay any tax or even declare the gifts on her federal or state tax forms (we both live in CA)? We do not want there to be any tax implication for her.  There are never any tax implications to the person getting the gift.