Gift tax return - form 709

[Black Bart]

Client (single man) wants to file a gift tax return. Last year he gave $40,000 in cash to his adult daughter and wants to know how much tax he'd owe. I never filed one before and have only a general idea about them. As I understand it, there's an exclusion for the first $14,000 and tax is due on the balance, but he does not have to pay any money with the return right now (assuming that he, of course, has not previously given away five million bucks). And if he never reaches that 5 meg plateau, then he never pays anything. Is that right?

[bgiez]

That's how I remember it, Black Bart. But it's been 8 or 9 years since I had to know anything about gift taxes. None of my clients have enough money to give away by choice these days

[Roberts]

You have to keep track of cumulative gifts given and like you say, no tax is allotted until the lifetime gift is achieved.
Their gift allotment available is reduced from $5 million to $4.96 million. Or whatever the current lifetime gift amount is this year.

I've only done one of them and the client was darn close to firing me when I explained to him that he didn't owe tax on a $100k gift to his daughter. Him being a genius was sure he paid tax now. He gave his daughter the $100k to buy a house after coming out of bankruptcy which she in turn sold without his knowledge and snorted the proceeds in the form of cocaine. She's now swearing she wont do it again and he's considering buying her a condo.

[DaveinTexas]

5 this year

I don't know why but I've had 5 Gift Tax Returns this year so far. I'm waiting for someone to share the wealth with me!!