Gift Tax Return

[Maria]

Hello,

I am preparing a gift tax return.

A client owns 100% stock of a California S corporation. He is married and has been filing joint return with his wife. In 2005, he gifted 50% stock of the S corp to his daughter. On form 709, do I need to input his wife's information, so that the exemptions are 2 x $11,000, or do I just show him? We are in California.

Thanks a lot.

[jainen]

something for your clients

>>do I need to input his wife's information, so that the exemptions are 2 x $11,000, or do I just show him?<<

How would we know? Isn't that something for your clients to decide?

[Bees Knees]

I think the question has to do with community property states (California). The question could be, since this is a community property state, is the gift splitting automatic.

I believe the answer is no. Even in a community property state, you have to make the election to split the gift between husband and wife.

[jainen]

his daughter

>>ou have to make the election to split the gift<<

That's right, whether or not this gift is from community property. The original post said the client owns 100%. If it is community property, the wife might not want to make a gift to "his daughter."