IRS 709 Gift Tax return

[geekette]

This really should be simple.  We gave the gift of equity ($27,500) to my husband's cousin, which allowed her to (finally) buy DH's dad's house after his death in 2014.

IRS Form 709 is apparently a completely separate tax return that must be paper filed, and we each have to fill it out separately.  It has instructions on all sorts of things, but DH and I are disagreeing on how to fill out this bit in part A, basically the gift splitting.  It seems to me that he should fill out the top part of part 1 and I, on the separate form, should fill out the bottom of part 1.  He thinks we both have to fill out both top and bottom.

Anyone know?  Maybe we're both wrong...

[reeshau]

You say "we."  If it was your husband and yourself, you each get the gift exclusion of $15,000 for the year, per recipient.  So, you're fine.  No return needed.  (and if the cousin had a husband, you could double it again)

Just to dot the i's on this:  was the equity in both of your names?  Was the check listed from both of you?  Those are technicalities, but would cement the conclusion.

[geekette]

The house was in his and his sister's name (although NC required I also sign for the sale).

The amount was deducted from the proceeds of the sale, so no check.

So from what I can tell, we can gift split, but I thought a form 709 was required from each of us.  His sister (not married) also gave a gift of equity of $27,500, so as far as I can tell, she must file.

I have a call in to a tax preparer in the area. 

[reeshau]

Yes, the sister went over the limit, so would have to file.

Talk to the preparer about whether or not you need to document the cash flow, and whether property in his name would be considered yours, too. (i.e. community property state)

In my case, It's just a form, as long as you fill it out.  The only consequence beyond penalties for not doing it, is a reduction in your tax-free estate.

[geekette]

Sadly, although I've filed our taxes for years, I cannot figure out this form.  I have a phone appointment with an enrolled agent set up in a couple weeks, which is the earliest I could get.

It's not a community property state, but NC did require that I sign the closing papers.

[MissNancyPryor]

Sadly, although I've filed our taxes for years, I cannot figure out this form. 

Um, yeah. 

I need to file this because I gave a large amount away this year as a simple lump sum, in cash.  I am single so it seems like I have hardly anything to fill out among the sections but it is frustrating and is confusing me.  Examples online are for complicated situations with married couples and property transfers and generation skipping stuff where grandma is handing out college degrees to the grandkids.  Mine is a single cash transfer to an immediate family member. 

I hate the idea that I need to hire someone to fill out the form but obviously their expertise is why they get to make this money off me.  I wonder how much one form costs to prepare?

Lump sum, one time payment, from single me to my unwed daughter.  What if I take a whack at it and just do my best?   

[geekette]

It actually ended up being not too horrid (eventually) for our simple version.  PM me and I'll see if I can send you a redacted version.

It's snail mailed to a different address - not filed with your taxes.  We got no reply, so we assume things are fine?

BTW, I have this youtube bookmarked, which cleared up some stuff for me, specifically part 1, line 7. The applicable credit amount is the *tax* you would have owed on the exclusion amount of $11 million plus, which for last year was 4,577,800.  It was lower in the video and probably different this year as well.  I had to look in the tax tables.

 

[MissNancyPryor]

Hey that YouTube was pretty good, thanks!  Your question about the exemption amount is exactly where I was drifting off into the confusopoly that is taxes.  Even though they are demonstrating software in the video there was enough detail as it relates to the form that it cleared up some things.  I think I am confident to try it out. 

I did hear that it was mailed in separate from the tax return.  The whole blind nature of it makes me want to send it registered or return-receipt-requested just to know it did arrive somewhere. 

Thanks for the link, I would never have found that.