Gift tax question

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Sam1
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Joined: Mon Apr 09, 2018 7:24 am

Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 3:56 pm

epoxyresin wrote:
Mon Dec 03, 2018 3:53 pm
Sam1 wrote:
Mon Dec 03, 2018 3:50 pm
epoxyresin wrote:
Mon Dec 03, 2018 3:45 pm
Greenman72 wrote:
Fri Nov 30, 2018 8:10 pm
defscott627 wrote:
Fri Nov 30, 2018 2:50 pm

My in-laws have decided to gift 60k before January 1st and 60k after (just because they don't really want to fill out any gift tax forms, and this seems to be perfectly legal, correct?)
I’m a Cpa. And if you were my client, we would still do a gift tax return.

Even though you’re not using any lifetime exclusion, any gift between $15k and $30k must still be reported on a 709. (Just one 709 is fine, since you’re splitting gifts.)

Before you disagree with me, read the 709 instructions. Page 6. Middle column, toward the bottom.

https://www.irs.gov/pub/irs-dft/i709--dft.pdf
And what's the penalty for failing to file a 709? It's five percent per month of the taxes due, up to 25% of the taxes due. If they can prove that you failed to file the form fraudulently, it's 15% per month, up to 75% of the taxes due. So if you don't owe any gift tax...
Well the estate tax return is due nine months after the date of death! You won’t owe any tax until the person dies because again, this is about the ESTATE TAX. Even if OP’s parents give him $1 million dollars, they won’t tax on it until after they die!!! They just have to file a form because the $1 million will count towards the exclusion. Get it?!?!
And in the likely case that no estate tax is indeed due, there will be no penalty for failing to file form 709 when you went over the $15k annual exclusion limit.
Yes!!!! Finally someone who gets it!

I suppose if OP’s parents’ estate Is over $11 million and then it’s discovered they didn’t file a form for the $60k, it could be penalized for the 60k? But would there even be interest since the tax isn’t due until after both of his parents die?

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tadamsmar
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Re: Gift tax question

Post by tadamsmar » Mon Dec 03, 2018 5:34 pm

Sam1 wrote:
Mon Dec 03, 2018 3:56 pm
epoxyresin wrote:
Mon Dec 03, 2018 3:53 pm
Sam1 wrote:
Mon Dec 03, 2018 3:50 pm
epoxyresin wrote:
Mon Dec 03, 2018 3:45 pm
Greenman72 wrote:
Fri Nov 30, 2018 8:10 pm

I’m a Cpa. And if you were my client, we would still do a gift tax return.

Even though you’re not using any lifetime exclusion, any gift between $15k and $30k must still be reported on a 709. (Just one 709 is fine, since you’re splitting gifts.)

Before you disagree with me, read the 709 instructions. Page 6. Middle column, toward the bottom.

https://www.irs.gov/pub/irs-dft/i709--dft.pdf
And what's the penalty for failing to file a 709? It's five percent per month of the taxes due, up to 25% of the taxes due. If they can prove that you failed to file the form fraudulently, it's 15% per month, up to 75% of the taxes due. So if you don't owe any gift tax...
Well the estate tax return is due nine months after the date of death! You won’t owe any tax until the person dies because again, this is about the ESTATE TAX. Even if OP’s parents give him $1 million dollars, they won’t tax on it until after they die!!! They just have to file a form because the $1 million will count towards the exclusion. Get it?!?!
And in the likely case that no estate tax is indeed due, there will be no penalty for failing to file form 709 when you went over the $15k annual exclusion limit.
Yes!!!! Finally someone who gets it!

I suppose if OP’s parents’ estate Is over $11 million and then it’s discovered they didn’t file a form for the $60k, it could be penalized for the 60k? But would there even be interest since the tax isn’t due until after both of his parents die?
So you are saying that I don't need to bother with following the IRS regulations even if I gift millions to someone. Correct?

No problem if no taxes are due, according to you.

To be serious and not rhetorical for a moment: I think these self-reporting regulations exist to help the IRS determine the difference between gifts, loans, and payments for goods and services. These 3 categories are taxed very differently and the IRS seeks to prevent tax fraud and make it easier to monitor tax fraud by requiring self-documentation and self-reporting, I think.
Last edited by tadamsmar on Mon Dec 03, 2018 5:47 pm, edited 3 times in total.

Greenman72
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Re: Gift tax question

Post by Greenman72 » Mon Dec 03, 2018 5:40 pm

Trust me. Most of us are well aware of the relationship between estate and gift tax, and the lifetime exclusion.

However some people don’t understand the difference between theory and reality. In theory, there’s no difference between theory and reality. In reality, there is.

Go ahead and give a $130k gift, and don’t file a gift tax return because “there’s no tax due”. Tell us how much time and money you spend fighting off the IRS.

Remember—you’re guilty until you prove yourself innocent with the irs. How do you prove yourself innocent? By filing a 709.

Sam1
Posts: 179
Joined: Mon Apr 09, 2018 7:24 am

Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 5:44 pm

tadamsmar wrote:
Mon Dec 03, 2018 5:34 pm
Sam1 wrote:
Mon Dec 03, 2018 3:56 pm
epoxyresin wrote:
Mon Dec 03, 2018 3:53 pm
Sam1 wrote:
Mon Dec 03, 2018 3:50 pm
epoxyresin wrote:
Mon Dec 03, 2018 3:45 pm


And what's the penalty for failing to file a 709? It's five percent per month of the taxes due, up to 25% of the taxes due. If they can prove that you failed to file the form fraudulently, it's 15% per month, up to 75% of the taxes due. So if you don't owe any gift tax...
Well the estate tax return is due nine months after the date of death! You won’t owe any tax until the person dies because again, this is about the ESTATE TAX. Even if OP’s parents give him $1 million dollars, they won’t tax on it until after they die!!! They just have to file a form because the $1 million will count towards the exclusion. Get it?!?!
And in the likely case that no estate tax is indeed due, there will be no penalty for failing to file form 709 when you went over the $15k annual exclusion limit.
Yes!!!! Finally someone who gets it!

I suppose if OP’s parents’ estate Is over $11 million and then it’s discovered they didn’t file a form for the $60k, it could be penalized for the 60k? But would there even be interest since the tax isn’t due until after both of his parents die?
So you are saying that I don't need to bother with following the IRS regulations even if I gift millions to my kid. Correct?

No problem if no taxes are due, according to you.
Nope. Common sense would tell you to file one. Heck, I’d always file one over $15k. If you’re talking about millions, that’s an actual high percentage of the $11 million exclusion. IF you have millions to give, you’re exactly who the estate tax is trying to capture! So again, common sense would tell you that if you’re facing a multi million dollar estate that you should file the form.

Should someone gifting $60k file the form? Yes. But should it be a HUGE deal and something they should really worry about? No.

Sam1
Posts: 179
Joined: Mon Apr 09, 2018 7:24 am

Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 5:46 pm

Greenman72 wrote:
Mon Dec 03, 2018 5:40 pm
Trust me. Most of us are well aware of the relationship between estate and gift tax, and the lifetime exclusion.

However some people don’t understand the difference between theory and reality. In theory, there’s no difference between theory and reality. In reality, there is.

Go ahead and give a $130k gift, and don’t file a gift tax return because “there’s no tax due”. Tell us how much time and money you spend fighting off the IRS.

Remember—you’re guilty until you prove yourself innocent with the irs. How do you prove yourself innocent? By filing a 709.
The problem is that most posters on here have been telling OP to file the gift tax form. As in, the person receiving the gift.

Also, I think it’s a valid question what the penalty is for NOT filing the form. I’m actually curious if it just means the gifted amount is counted above the exclusion amount. In other words, the $60k is subject to estate taxes one day.

J G Bankerton
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Re: Gift tax question

Post by J G Bankerton » Mon Dec 03, 2018 5:48 pm

Sam1 wrote:
Mon Dec 03, 2018 3:50 pm

Well the estate tax return is due nine months after the date of death! You won’t owe any tax until the person dies because again, this is about the ESTATE TAX. Even if OP’s parents give him $1 million dollars, they won’t tax on it until after they die!!! They just have to file a form because the $1 million will count towards the exclusion. Get it?!?!
How does the IRS collect if the estate can't pay taxes because all the money was gifted away?

Sam1
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Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 5:53 pm

Greenman72 wrote:
Mon Dec 03, 2018 5:40 pm
Trust me. Most of us are well aware of the relationship between estate and gift tax, and the lifetime exclusion.

However some people don’t understand the difference between theory and reality. In theory, there’s no difference between theory and reality. In reality, there is.

Go ahead and give a $130k gift, and don’t file a gift tax return because “there’s no tax due”. Tell us how much time and money you spend fighting off the IRS.

Remember—you’re guilty until you prove yourself innocent with the irs. How do you prove yourself innocent? By filing a 709.
My point in making light of the form filing from Op’s parents was more out of dismay at how many (most likely) average Americans are posting on here super concerned about a gift tax form for a measley $60k. They must have NO idea how the Uber wealthy act and the stuff they pull to avoid estate taxes and the like. It’s sad that so many are “above the law” and then you have average people who actually think someone who receives a mere $60k from their parents has to worry about paying taxes. It’s another example of the little man being screwed and not getting ahead.

Most Americans can file gift tax forms all day long but it won’t ever matter because they will NEVER have an estate worth $11 million or more.

Sam1
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Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 5:55 pm

J G Bankerton wrote:
Mon Dec 03, 2018 5:48 pm
Sam1 wrote:
Mon Dec 03, 2018 3:50 pm

Well the estate tax return is due nine months after the date of death! You won’t owe any tax until the person dies because again, this is about the ESTATE TAX. Even if OP’s parents give him $1 million dollars, they won’t tax on it until after they die!!! They just have to file a form because the $1 million will count towards the exclusion. Get it?!?!
How does the IRS collect if the estate can't pay taxes because all the money was gifted away?
As in they gave away more than $11 million and have nothing left? Good question. My guess would be that most people of that means (who have $11 million to give away PRE death), have all sorts of other mechanisms to avoid the estate tax whenever possible. Add my in-laws to this list of people.

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tadamsmar
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Re: Gift tax question

Post by tadamsmar » Mon Dec 03, 2018 6:05 pm

If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, even if the filing wouldn't result in taxes being owed, according to Cramer Law Center. Also, the IRS is cracking down: It has begun checking real estate transfer transactions in several states to catch offenders, according to Vogel Consulting.
https://pocketsense.com/penalties-failu ... -6652.html

Sam1
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Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 6:18 pm

tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, even if the filing wouldn't result in taxes being owed, according to Cramer Law Center. Also, the IRS is cracking down: It has begun checking real estate transfer transactions in several states to catch offenders, according to Vogel Consulting.
https://pocketsense.com/penalties-failu ... -6652.html
You really think they are sending people to jail for not filing the gift tax form??

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tadamsmar
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Re: Gift tax question

Post by tadamsmar » Mon Dec 03, 2018 6:55 pm

Sam1 wrote:
Mon Dec 03, 2018 6:18 pm
tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, even if the filing wouldn't result in taxes being owed, according to Cramer Law Center. Also, the IRS is cracking down: It has begun checking real estate transfer transactions in several states to catch offenders, according to Vogel Consulting.
https://pocketsense.com/penalties-failu ... -6652.html
You really think they are sending people to jail for not filing the gift tax form??
I don't spend my time thinking about how I can break the law and get away with it.

And, I am currently being hounded by an IRS auditor. And, I really think that all I did was fail to file an IRS form. I think I will prevail, but it a long, drawn-out process, and every letter they send me suggests that I should just send them $12,000 to avoid possible penalties and interest.

Greenman72
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Re: Gift tax question

Post by Greenman72 » Mon Dec 03, 2018 6:56 pm

Sam1 wrote:
Mon Dec 03, 2018 6:18 pm
tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, even if the filing wouldn't result in taxes being owed, according to Cramer Law Center. Also, the IRS is cracking down: It has begun checking real estate transfer transactions in several states to catch offenders, according to Vogel Consulting.
https://pocketsense.com/penalties-failu ... -6652.html
You really think they are sending people to jail for not filing the gift tax form??
Doubtful, but you could simply obey the law (for really cheap or free) and not have to worry about it.

Gill
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Location: Florida

Re: Gift tax question

Post by Gill » Mon Dec 03, 2018 7:31 pm

Sam1 wrote:
Mon Dec 03, 2018 3:54 pm
It continues to blow my mind how many people are completely unaware that the gift tax is about ESTATE taxes and the gift giver is responsible for filing a form and the estate’s tax return is due following death.

This is one example of how average people can’t get ahead. They don’t even know basic information like this. They really think that if someone gives them $60k there is a TAX they have to pay. Good god.
Relax Sam. I don’t know what you mean by saying the gift tax is “about” estate tax. Yes, the gift tax was designed to avoid taxpayers from avoiding the estate tax by making lifetime gifts. It is now a unified transfer tax. Also, the ‘gift giver” is known as the donor and the recipient is the donee.
Gill

Sam1
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Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 7:48 pm

Gill wrote:
Mon Dec 03, 2018 7:31 pm
Sam1 wrote:
Mon Dec 03, 2018 3:54 pm
It continues to blow my mind how many people are completely unaware that the gift tax is about ESTATE taxes and the gift giver is responsible for filing a form and the estate’s tax return is due following death.

This is one example of how average people can’t get ahead. They don’t even know basic information like this. They really think that if someone gives them $60k there is a TAX they have to pay. Good god.
Relax Sam. I don’t know what you mean by saying the gift tax is “about” estate tax. Yes, the gift tax was designed to avoid taxpayers from avoiding the estate tax by making lifetime gifts. It is now a unified transfer tax. Also, the ‘gift giver” is known as the donor and the recipient is the donee.
Gill
I said it’s about estate tax bevause so many posters seem confused and acting as though some sort of income tax is owed. Someone actually mentioned income tax. Yes, I know the correct terms for the giver and recipient. I also have access to google if I did not

Gill
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Location: Florida

Re: Gift tax question

Post by Gill » Mon Dec 03, 2018 7:57 pm

Sam1 wrote:
Mon Dec 03, 2018 7:48 pm
Gill wrote:
Mon Dec 03, 2018 7:31 pm
Sam1 wrote:
Mon Dec 03, 2018 3:54 pm
It continues to blow my mind how many people are completely unaware that the gift tax is about ESTATE taxes and the gift giver is responsible for filing a form and the estate’s tax return is due following death.

This is one example of how average people can’t get ahead. They don’t even know basic information like this. They really think that if someone gives them $60k there is a TAX they have to pay. Good god.
Relax Sam. I don’t know what you mean by saying the gift tax is “about” estate tax. Yes, the gift tax was designed to avoid taxpayers from avoiding the estate tax by making lifetime gifts. It is now a unified transfer tax. Also, the ‘gift giver” is known as the donor and the recipient is the donee.
Gill
Gill
Gill
I said it’s about estate tax bevause so many posters seem confused and acting as though some sort of income tax is owed. Someone actually mentioned income tax. Yes, I know the correct terms for the giver and recipient. I also have access to google if I did not
If Google had existed I could have avoided getting a law degree. :wink:
Gill

Sam1
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Re: Gift tax question

Post by Sam1 » Mon Dec 03, 2018 9:03 pm

Gill wrote:
Mon Dec 03, 2018 7:57 pm
Sam1 wrote:
Mon Dec 03, 2018 7:48 pm
Gill wrote:
Mon Dec 03, 2018 7:31 pm
Sam1 wrote:
Mon Dec 03, 2018 3:54 pm
It continues to blow my mind how many people are completely unaware that the gift tax is about ESTATE taxes and the gift giver is responsible for filing a form and the estate’s tax return is due following death.

This is one example of how average people can’t get ahead. They don’t even know basic information like this. They really think that if someone gives them $60k there is a TAX they have to pay. Good god.
Relax Sam. I don’t know what you mean by saying the gift tax is “about” estate tax. Yes, the gift tax was designed to avoid taxpayers from avoiding the estate tax by making lifetime gifts. It is now a unified transfer tax. Also, the ‘gift giver” is known as the donor and the recipient is the donee.
Gill
Gill
Gill
I said it’s about estate tax bevause so many posters seem confused and acting as though some sort of income tax is owed. Someone actually mentioned income tax. Yes, I know the correct terms for the giver and recipient. I also have access to google if I did not
If Google had existed I could have avoided getting a law degree. :wink:
Gill
True. AI is coming for us all!

J G Bankerton
Posts: 343
Joined: Thu Sep 14, 2017 3:30 pm

Re: Gift tax question

Post by J G Bankerton » Tue Dec 04, 2018 12:39 pm

tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, ... Also, the IRS is cracking down: It ...
Payments that you make on someone's behalf for qualified tuition is not a gift. Ya that's the ticket, I'm paying my girlfriend's "tuition". :sharebeer

Gill
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Location: Florida

Re: Gift tax question

Post by Gill » Tue Dec 04, 2018 5:14 pm

J G Bankerton wrote:
Tue Dec 04, 2018 12:39 pm
tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, ... Also, the IRS is cracking down: It ...
Payments that you make on someone's behalf for qualified tuition is not a gift. Ya that's the ticket, I'm paying my girlfriend's "tuition". :sharebeer
...provided you pay it directly to the educational institution.
Gill

J G Bankerton
Posts: 343
Joined: Thu Sep 14, 2017 3:30 pm

Re: Gift tax question

Post by J G Bankerton » Tue Dec 04, 2018 5:21 pm

Gill wrote:
Tue Dec 04, 2018 5:14 pm
J G Bankerton wrote:
Tue Dec 04, 2018 12:39 pm
tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, ... Also, the IRS is cracking down: It ...
Payments that you make on someone's behalf for qualified tuition is not a gift. Ya that's the ticket, I'm paying my girlfriend's "tuition". :sharebeer
...provided you pay it directly to the educational institution.
Gill
Link?

J G Bankerton
Posts: 343
Joined: Thu Sep 14, 2017 3:30 pm

Re: Gift tax question

Post by J G Bankerton » Tue Dec 04, 2018 5:24 pm

This is what the IRS says.

"If you are required to but do not file a Form 709, or do not provide the information requested on the form, or provide fraudulent
information, you may be charged penalties and be subject to criminal prosecution."

May is the word. If the form was not filed to evade taxes they will come down hard; they have accounts with guns. The bigger the evasion the harder they come. With ZERO evasion of taxes don't worry about it.

senex
Posts: 105
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Re: Gift tax question

Post by senex » Tue Dec 04, 2018 5:39 pm

Greenman72 wrote:
Sat Dec 01, 2018 7:48 am
The only way that I would allow my clients to NOT file a 709 (in this circumstance) is if they wrote four separate $15k checks:
1. From Dad's solo account to Husband's solo account
2. From Dad's solo account to Wife's solo account
3. From Mom's solo account to Husband's solo account
4. From Mom's solo account to Wife's solo account

If ANY check is for more than $15,000, then you file a 709. If anybody receives more than $15,000 (as in, Husband deposits two $15k checks in his bank account, even if it is a joint account), then you file a 709. This is the only way to avoid IRS scrutiny. Otherwise, you open yourself up to the possibility (however remote) of jeopardy with the IRS.
I've heard about writing separate checks to avoid ambiguity, but I have three questions about your post:

1) I haven't heard of a requirement for solo account titling by the donor. I thought a joint account is owned half by one spouse and half by the other, so I don't understand why I can't write a check from my "half". Are you saying that legally every check written from a joint account is deemed to be half from one owner and half from the other? Is there a good reference to support this?

2) I also haven't heard about solo titling by the donee. I don't see anything in Form 709 that discusses different reporting requirements based on where/how the donee deposits funds. Are you saying that legally a check to me that is deposited in a joint account is deemed to have been written half to me and half to my spouse? Is there a reference to support this?

3) You make two contradictory claims in the quoted text: your example gives a case where "my clients to NOT file a 709," but below that you say that a 709 must be filed if the husband deposits two $15k checks (which does happen in your example case). So, which of those claims was wrong?

Thanks.

Gill
Posts: 4823
Joined: Sun Mar 04, 2007 8:38 pm
Location: Florida

Re: Gift tax question

Post by Gill » Tue Dec 04, 2018 6:53 pm

J G Bankerton wrote:
Tue Dec 04, 2018 5:21 pm
Gill wrote:
Tue Dec 04, 2018 5:14 pm
J G Bankerton wrote:
Tue Dec 04, 2018 12:39 pm
tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
If you won't owe any taxes anyway, why file? Failure to file a form 709 can result in a fine of up to $25,000 and a year in jail, ... Also, the IRS is cracking down: It ...
Payments that you make on someone's behalf for qualified tuition is not a gift. Ya that's the ticket, I'm paying my girlfriend's "tuition". :sharebeer
...provided you pay it directly to the educational institution.
Gill
Link?
Huh?

OnTrack
Posts: 369
Joined: Wed Jan 20, 2016 11:16 pm

Re: Gift tax question

Post by OnTrack » Wed Dec 05, 2018 2:03 am

Gill wrote:
Tue Dec 04, 2018 6:53 pm
J G Bankerton wrote:
Tue Dec 04, 2018 5:21 pm
Gill wrote:
Tue Dec 04, 2018 5:14 pm
J G Bankerton wrote:
Tue Dec 04, 2018 12:39 pm
tadamsmar wrote:
Mon Dec 03, 2018 6:05 pm
Payments that you make on someone's behalf for qualified tuition is not a gift. Ya that's the ticket, I'm paying my girlfriend's "tuition". :sharebeer
...provided you pay it directly to the educational institution.
Gill
Link?
Huh?
"The following rules must be strictly adhered to in order for payments for educational expenses to be nontaxable gifts:

The payment must be made directly to the institution providing the education, not to the individual receiving the education.
The payment must be made for tuition only."
https://www.thebalance.com/what-gifts-a ... ax-3505684

J G Bankerton
Posts: 343
Joined: Thu Sep 14, 2017 3:30 pm

Re: Gift tax question

Post by J G Bankerton » Wed Dec 05, 2018 4:39 am

OnTrack wrote:
Wed Dec 05, 2018 2:03 am
Gill wrote:
Tue Dec 04, 2018 6:53 pm
J G Bankerton wrote:
Tue Dec 04, 2018 5:21 pm
Gill wrote:
Tue Dec 04, 2018 5:14 pm
J G Bankerton wrote:
Tue Dec 04, 2018 12:39 pm
Payments that you make on someone's behalf for qualified tuition is not a gift. Ya that's the ticket, I'm paying my girlfriend's "tuition". :sharebeer
...provided you pay it directly to the educational institution.
Gill
Link?
Huh?
"The following rules must be strictly adhered to in order for payments for educational expenses to be nontaxable gifts:

The payment must be made directly to the institution providing the education, not to the individual receiving the education.
The payment must be made for tuition only."
https://www.thebalance.com/what-gifts-a ... ax-3505684
“The determination whether a gift is a present or future interest does not depend upon the classification of the interest conveyed. Such an undertaking would obscure judicial analysis which is limited to deciding whether the gift satisfies the test requiring that the donee receive the present right to enjoy and possess the gift.” [Estate of McClure, 221 Ct. Cl. 570 (Ct. Cl. 1979)].

Greenman72
Posts: 190
Joined: Fri Nov 01, 2013 2:17 pm

Re: Gift tax question

Post by Greenman72 » Thu Dec 06, 2018 3:01 pm

OK. So I asked two other tax practitioners who have been in business for 20 years or more.

One of them said that no 709 needs to be filed. The intent of the gift is to give $15k four ways.

The other one said that a 709 should be filed to elect gift-splitting, ere $30k of the gift is considered a taxable gift which uses up the exclusion.

So there you have it.

Spirit Rider
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Joined: Fri Mar 02, 2007 2:39 pm

Re: Gift tax question

Post by Spirit Rider » Thu Dec 06, 2018 8:46 pm

Greenman72 wrote:
Thu Dec 06, 2018 3:01 pm
OK. So I asked two other tax practitioners who have been in business for 20 years or more.

One of them said that no 709 needs to be filed. The intent of the gift is to give $15k four ways.

The other one said that a 709 should be filed to elect gift-splitting, ere $30k of the gift is considered a taxable gift which uses up the exclusion.

So there you have it.
Having done something wrong for twenty years does not make an authoritative source. We have often seen here on BHs when it comes to CPAs and employer retirement plans, especially one-participant 401k plans.

How about an authoritative source from the Tax Adviser of the American Institute of CPAs (AICPA):

"Community property and property held by spouses as joint tenants or tenants by the entirety are generally considered as owned one-half by each spouse. Thus, spouses do not need to elect to split gifts with regard to these types of property."

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