Gift Tax Form 709 question

[TaxLadyinPA]

Am I doing this right ? I never in all my years of doing taxes ... never never have I had to do a gift tax return. Your help and wise answers are appreciated.

Mother gives $ 20,000 to daughter as a gift so daughter can make a down payment on a new home. Mom gave it directly to the mortgage company and has a "request for verification of gift" letter from the mortgage company.

I am assuming that I do need to do a Form 709 and that $ 8000 is the taxable amount, however .... when I'm reading about "unified credit" of 345,800 this means that Mom files the return but does not have to pay the $ 1440 in tax that would be owed on the 8000 of taxable income.

the 345800 is a lifetime amount of deductible tax that mom can use and not pay taxes on the gifts ... Am I right ???
So Mom files this return , does NOT pay any tax on the taxable amount of 8000, and now has a remaining lifetime unified credit amount of 344,360.

Then any time in the future that mom gives another gift, we put the 1440 for prior years tax credit and keep reducing the unified credit until all used up

Am I right on this ??

Mom files Form 709, shows 1440 in tax on the 8000 taxable but does not have to pay the tax because she can deduct the tax from the unified credit.

Thanks for helping me learn something new.

[Roland Slugg]

That's how it works

Yep, that's how it works. I didn't check your numbers, but your overall description was correct.

[Burke]

You are right on. If you ever have a chance to do a 706, they are really interesting.