Gifting 2013 14K

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Gifting 2013 14K

Postby exoilman » Sat Feb 09, 2013 12:44 pm

Can you write one check for 28K to an individual if both husband and wifes name is on the check header? Also if there is additional gifts to the same person is a Form 709 is required?

thanks
Sam
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Re: Gifting 2013 14K

Postby Jason Hull » Mon Feb 11, 2013 9:03 pm

Sam--It appears that you can, as long as you fit within the rules set forth by the IRS. Check out the instructions for lines 12-18. If you exceed the annual gift tax exemption, then you'll need to file as part of your lifetime exclusion, although, when in doubt, asking your CPA for confirmation is the safest route.

Here's the form: http://www.irs.gov/pub/irs-pdf/i709.pdf
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Re: Gifting 2013 14K

Postby jon-nyc » Mon Feb 11, 2013 10:13 pm

I hope you can because we've done it a number of times!
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Re: Gifting 2013 14K

Postby zotty » Mon Feb 11, 2013 10:24 pm

I thought it was 13K for 2013?

Did this change?

[EDIT] I'm talking about the exclusion amount only.
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Re: Gifting 2013 14K

Postby masteraleph » Mon Feb 11, 2013 11:27 pm

zotty wrote:I thought it was 13K for 2013?

Did this change?

[EDIT] I'm talking about the exclusion amount only.


Yes. It's indexed to inflation, and is $14,000 for 2013.
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Re: Gifting 2013 14K

Postby zotty » Mon Feb 11, 2013 11:47 pm

Sure enough! Thanks
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Re: Gifting 2013 14K

Postby Alan S. » Tue Feb 12, 2013 12:45 am

You can do it, but it appears both spouses will have to file a 709 to elect gift splitting. The exception is for community property state residents making gifts from community funds, where the 50-50 split is automatic. The OP was from NJ which is not a CP state.

Additional gifts from either spouse would then exceed the 13k annual exclusion per donee, and the excess would become a taxable gift. Not currently taxable, but a reduction in the remaining unified credit.
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Re: Gifting 2013 14K

Postby Penguin » Tue Feb 12, 2013 12:58 am

Alan S. wrote:You can do it, but it appears both spouses will have to file a 709 to elect gift splitting. The exception is for community property state residents making gifts from community funds, where the 50-50 split is automatic. The OP was from NJ which is not a CP state.

Additional gifts from either spouse would then exceed the 13k annual exclusion per donee, and the excess would become a taxable gift. Not currently taxable, but a reduction in the remaining unified credit.

That is not how I interpret the instructions for for 709 for year 2012:
When the Consenting Spouse Must Also File a Gift Tax Return

In general, if you and your spouse elect gift splitting, then both spouses must file his or her own, individual, gift tax return.

However, only one spouse must file a return if the requirements of either of the exceptions below are met. In the exceptions below, gifts means transfers (or parts of transfers) that do not qualify for the political organization, educational, or medical exclusions.

Exception 1. During the calendar year:
Only one spouse made any gifts,

The total value of these gifts to each third-party donee does not exceed $26,000, and

All of the gifts were of present interests.

Exception 2. During the calendar year:
Only one spouse (the donor spouse) made gifts of more than $13,000 but not more than $26,000 to any third-party donee,

The only gifts made by the other spouse (the consenting spouse) were gifts of not more than $13,000 to third-party donees other than those to whom the donor spouse made gifts, and

All of the gifts by both spouses were of present interests.

If either of the above exceptions is met, only the donor spouse must file a return and the consenting spouse signifies consent on that return.
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Re: Gifting 2013 14K

Postby Alan S. » Tue Feb 12, 2013 7:13 pm

The entire issue is dependent on WHICH spouse made the gifts, since the 709 Inst. and IRS Regs are less than clear regarding donations from joint accounts.
1)Is the donor only the spouse who signed the check?
2) Or since the funding account was joint, is each spouse deemed to have donated 50% ?
1) If 1 above is true, will having both spouses sign the check avoid the 709?

There seems to be general lack of consensus regarding these questions with respect to non community property states. Therefore, you might look at the 709 as a conservative precautionary measure.

With respect to the 709 if filed, the OP suggested that additional gifts above the 26k would be made by the other spouse to the SAME donee. That would require a 709 for each spouse, but if the additional gifts were not made, then only the donor spouse must file the 709 and the other spouse could sign consent on that form.
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Re: Gifting 2013 14K

Postby letsgobobby » Tue Feb 12, 2013 9:04 pm

Alan S. wrote:The entire issue is dependent on WHICH spouse made the gifts, since the 709 Inst. and IRS Regs are less than clear regarding donations from joint accounts.
1)Is the donor only the spouse who signed the check?
2) Or since the funding account was joint, is each spouse deemed to have donated 50% ?
1) If 1 above is true, will having both spouses sign the check avoid the 709?

There seems to be general lack of consensus regarding these questions with respect to non community property states. Therefore, you might look at the 709 as a conservative precautionary measure.

With respect to the 709 if filed, the OP suggested that additional gifts above the 26k would be made by the other spouse to the SAME donee. That would require a 709 for each spouse, but if the additional gifts were not made, then only the donor spouse must file the 709 and the other spouse could sign consent on that form.

is there a consensus for community property states?
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Re: Gifting 2013 14K

Postby exoilman » Wed Feb 13, 2013 9:41 am

Thanks for the replies and the additional discussions raised. But just to be sure, we can gift the 28K (to one individual) on one check because both our names are on the header?

regards
Sam
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Re: Gifting 2013 14K

Postby theduke » Wed Feb 13, 2013 11:29 am

I think I would just write two checks, one from me, and one from my wife. It's easier than filling out form 709, and I've did that before also. I'm not certain if form 709 is required for a gift of $28,000, but I believe in making things as simple as possible. Writing two checks isn't hard.
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Re: Gifting 2013 14K

Postby Alan S. » Wed Feb 13, 2013 5:28 pm

For community property states, the 709 Instructions are clear (see p 1). There is no filing requirement for the other spouse to consent to gifts not exceeding 28k for 2013 if the check is written on an account holding community funds, regardless of who signs the check. The gift is automatically deemed made 50-50 from each spouse and therefore split without any consents. Not so clear for common law states.
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Re: Gifting 2013 14K

Postby Leesbro63 » Wed Feb 13, 2013 6:01 pm

What if both spouses sign the single check?
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Re: Gifting 2013 14K

Postby kenyan » Wed Feb 13, 2013 6:18 pm

masteraleph wrote:
zotty wrote:I thought it was 13K for 2013?

Did this change?

[EDIT] I'm talking about the exclusion amount only.


Yes. It's indexed to inflation, and is $14,000 for 2013.


Sadly for me, the only thing that doesn't seem to be indexed to inflation these days is my salary.

[/whine]
Retirement investing is a marathon.
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