When does a form 709 have to be filed? and why. I really need some help on this one... A client called me and told me her lawyer told her she needs to have a form 709 filed because she bought a home for her daughter.............The house is in the daughters name but the Mother paid for it with a CD that had expired... I am not familiar with a form 709 at all...........thanks in advance for any help..
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Form 709
Any year that someone gifts more than $12,000 to another person they will need to file the Form 709, Gift tax return. And it sounds like that is the case with mom, so the lawyer is correct a Gift Tax return is due. The return is a tracking mechanism for the IRS, any amount given to another above the $12k reduces the estate exclusion amount when they die and the exclusion from estate tax is determined. If the value of the gift exceeds the exclusion amount ( I think it's ~$345K) then a tax will be owed by mom this year."A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain -
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You also need to find out if the mother has filed any 709 returns befoire.
You have to list the prior year gifts to get a cumulative total for all gifts.
If the mother has already given the max for her lifetime credit, then the gift she gave her daughter this year would have some gift tax due.
If the mother has not reached her max credit, then the total is reported for use in future years should she give anymore gifts.
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