Gift tax return not filed

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Cpadave
Posts: 215
Joined: Wed Nov 22, 2017 11:53 am

Gift tax return not filed

Post by Cpadave »

Has anyone received notice for not filing a gift tax return from IRS or State? In a situation when account was set up for minor and or 529 was funded that exceeded the gift tax exclusion limit.
codedude
Posts: 69
Joined: Thu Jan 26, 2017 9:15 pm

Re: Gift tax return not filed

Post by codedude »

I did not for 5 years. By then I came to know that a gift tax return needed to be filed, so I filed it, and haven’t heard for 2-3 years so far.
bsteiner
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Joined: Sat Oct 20, 2012 9:39 pm
Location: NYC/NJ/FL

Re: Gift tax return not filed

Post by bsteiner »

I've had clients who've received notices asking about gift tax returns where the IRS found out about a transfer that they thought was a gift, though none of them involved a gift to a 529 plan.

There was a story in the Wall Street Journal a few years ago saying that the IRS checks real estate records for transfers for no consideration or nominal consideration (since most states have a real estate transfer tax based on the consideration) and then checks to see if the transferor reported the transfer on a gift tax return.

On an estate tax audit, the IRS often looks at the decedent's bank records for the last 3 years of the decedent's death.
Topic Author
Cpadave
Posts: 215
Joined: Wed Nov 22, 2017 11:53 am

Re: Gift tax return not filed

Post by Cpadave »

Thanks for the helpful replies.
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munemaker
Posts: 4174
Joined: Sat Jan 18, 2014 6:14 pm

Re: Gift tax return not filed

Post by munemaker »

I just completed Form 709 "United States Gift (and Generation-Skipping Transfer) Tax Return."

They make it a lot more difficult than you would think. Thirty six pages of instruction to fill out a 4 page form.

I was able to do it without help but it took a couple hours to report two gifts from parent to children.
TonyUncleJohnny
Posts: 43
Joined: Wed Jan 03, 2018 4:02 pm

Re: Gift tax return not filed

Post by TonyUncleJohnny »

Am I correct in understanding that this "gift tax return" is only applicable in situations where the exclusion limit was crossed? Gift giver's exclusion limit of $15,000 per recipient.

My wife and I fund our children's 529 plans annually where each parent contributes $15k per child. So a total of $60k/yr gifted by 2 parents to 2 children. No other gifts made to the 2 children by parents. So we're maxing our gift exclusion limits but not crossing them. Other family members also contribute to the 2 children's 529 plans while staying within their individual exclusion limits. No gift-tax returns to be filed, am I correct?

Thank you.
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