parents gifted the couple, one check

[Possi]

I think this is a dumb question, but my client asked and I don't know the legal answer.

Her mother gifted her and her husband $30,000 in one check made out to her.

Is that a problem? They are married, happily living together.

Does she need Mom to make out 2 checks for 15 each?

If it was me, I wouldn't give it a thought. I'd take the money and run for the hills...But I suppose since I am the tax woman, I should at least ask..........the pros.............

What say you?

[snowbird]

You will have to file a 709 even if you split it equally ... the excusion is $13,000 for 2009. If there is no likelihood of an estate exceeding $3.5 mil or what ever the number will be in the future (maybe back to $1.5 mil) , go ahead and leave it as one gift to one person. The unified credit will keep the client from paying gift tax. However, if there is a large potential estate, not spliting the gift could at some point cost the beneficiaries up to 45% of the $13,000 annual exclusion not used for the husband.

[Snaggletooth]

Was the donor married?

Did Momma have a husband?

If so, the amount excluded could be $52,000. Momma can give $13K to son and his wife, totalling $26,000. Should Momma and her husband agree to it, husband can be deemed to have given half of the $30,000, even if he didn't really do it.

Splitting the gift means Momma gave $15,000 and her husband gave $15,000. That is only $7500 apiece for son and $7500 apiece for his wife.

No gift tax effect on the ultimate estate tax, but Momma and her husband must agree to this, and there is a checkoff box on the front of the return.

[taxmom34]

are they newlyweds with no children, ?

[Possi]

not newlyweds

are they newlyweds with no children, ?

No, not newlyweds.

Jack and Jill are married. Jill started a business, a restaurant. Jill is suffering in the first couple of years, as expected.

Jill's mother gave the gift of $30,000.

I'll check to see if Jill's mother is married so that her husband can be deemed to have given a portion as well.

..... off to email Jill....

[Possi]

Widow

Did Momma have a husband?

If so, the amount excluded could be $52,000. Momma can give $13K to son and his wife, totalling $26,000. Should Momma and her husband agree to it, husband can be deemed to have given half of the $30,000, even if he didn't really do it.

Splitting the gift means Momma gave $15,000 and her husband gave $15,000. That is only $7500 apiece for son and $7500 apiece for his wife.

No gift tax effect on the ultimate estate tax, but Momma and her husband must agree to this, and there is a checkoff box on the front of the return.

Not married. She is a widow. Dad died in '91.

She could treat it as an interest free loan and pay back a little at a time. Would that work?

[snowbird]

Yes it would, but there are conditions. See Deluxe TTB page 21-24. But, if there is no large estate in the future, why worry about it. Do a gift. A form 709 is very simple. No gift tax due.

[Possi]

Thanks Snowbird

It will be my first 709 and I'm glad for the challenge.

Thanks for the input!