Gift tax center

Example 1

John Smith contributes $20,000 during the year 2013 to a 529 plan for his son, Stephen, and $10,000 for his daughter, Susan. During that same year, Mary Smith (John’s wife) makes no contributions to a 529 plan for either child. John and Mary make no other cash or property gifts to their children during the year.

If Mary consents to split gifts with John, each is considered to have made a $10,000 gift to Stephen and a $5,000 gift to Susan. Since these gifts are below the $14,000 annual exclusion limit for 2013, John and Mary will have no taxable gifts to report on Form 709. However, John must file the gift tax return and Mary must indicate her consent to split gifts on John’s return. (Mary need not file her own Form 709, since her own gifts did not exceed $14,000 for any donee, and the effect of splitting gifts with her husband did not create a gift above the $14,000 exclusion amount.)

See Filled-In Form 709 HERE.