Gift Tax and Splitting with Spouse

[Lion]

Please read TTB explanations cited above. TTB explains things well.

[Dude]

It would be appropriate to ask TP if her brother had outstanding medical bills or tuition, if so, the gift tax issue is negated. Maybe brother has a tuition expenses for his child. In that case sister could also fund a 529 with $75k, spread it over five years. Her spouse could then gift the remaining 15K or she could finagle a combination of any of the above.

[New York Enrolled Agent]

I don't get it - what's the big deal about filing a 709 form? It's simple to do - does everything right for the taxpayer. Ruth could have completed the form(s) in less time than she spent reading all these posts.

BTW, funding a 529 plan with $75K still requires filing a Form 709.

[ruthc]

There is no big deal about doing the form return at all !!!!!!! Never said there was. I stated that I am suggesting to her to just pay her brother the $100K and be done with it. Then the return is going to be done. I wasn't going to respond anymore, but as posters wrote, I figured I would respond out of courtesy. AMEN!!!!

[Dusty2004]

Ruth said: "I thought an option could be: she and her spouse (if he agrees to split) could give $15K each to her brother and his spouse in 2019 (total equals $60K). Then give $10K each in 2020 (total equals $40K). I didn't think she would have to do a return, but I may be wrong because of the splitting."

You understand it correctly. If both husband and wife agree to give the money away they can give a married couple a total of $60,000 made out to the recipient and their spouse and not have to file a gift tax return. It is the same as give 4 checks for $15,000.

Dusty

[Lion]

Ruth kinda combined two things. 1.) "If she and her spouse could give $15K each..." No splitting required if EACH gives $15K. No gift tax return. 2.) "If he agrees to split." That implies that she gives $30K from her account, and he agrees to split. Two gift tax returns required to split her $30K gift into two $15K gifts.

[TAXNJ]

Ruth kinda combined two things. 1.) "If she and her spouse could give $15K each..." No splitting required if EACH gives $15K. No gift tax return. 2.) "If he agrees to split." That implies that she gives $30K from her account, and he agrees to split. Two gift tax returns required to split her $30K gift into two $15K gifts.

Well summarized. At this point and earlier reply posts refer others to review The Tax Book section for “gifts” and/or applicable IRS code.

Need to be careful of reply posts not providing a reference.

This post can now be archived since Original Poster made a final decision.