Two things you didn't tell your viewers that are important: 1. Gifts over $16,000 for tuition or medical expenses must be paid DIRECTLY to the provider of the education/medical care. You can't give the tuition/medical expense money to the gift recipient directly and tell them to use it to pay tuition or medical expenses. 2. Couples gifting $32,000 to one person need to write TWO checks for $16,000 each or they will have to file Form 709 for gift splitting. At least that's my understanding of the regulations.
@slimdawgwoof
2 жыл бұрын
Helpful considerations. I will make a note of these to ask about with my CPA if it ever comes up. Thanks
@paulbellas8797
3 ай бұрын
One important thing to consider about gifting early is the amount of capital gains to be paid by in selling or transferring the gifted assets. Sometimes it is better to take the 40% estate tax hit on long-term investments because the step up in basis upon death transfer will be more tax advantageous.
@skeptic8013
Жыл бұрын
You should do a video walkthrough on how to fill out the 709 form
@Imsierrabound
3 ай бұрын
Often gifts under the annual exclusion given to children to secure a loan for a home purchase will require signing a form from the bank that states there is no expectation of repayment or that the gift was a loan. In addition, gifts should be separated so the $32,000 gift in your example should be two gifts of $16,000 from each individual spouse as the IRS could misconstrue the larger gift as coming from an “individual” as stated in the tax code. Same with gift’s from trusts..
@boyboy-xe6rx
Жыл бұрын
Any years we exceed annual yearly gift tax exempt amount, we just only need to fill IRS Form 709, do not need to do anything else to let IRS know we would like it to be deduced from life time exclusion amount and do not worry about paying gift tax as long as we did not exceed life time estate exclusion amount which I guess is $12.92 million in 2023. Is my understanding correct?
@cocothehamster1956
Жыл бұрын
Yes, you are correct. Tax form 709 is filed to keep track toward your 12.92 M. Filing tax form does not mean you have to pay tax. Most people will not ever worry about gifting going over 16-17 K /year unless you are really rich.
@sutherland9
Жыл бұрын
I wish the instruction sheets for form 709 were a little clearer. After filling in lines 1 thru 6 on "Part 2" on the first page of form 709 regarding a gift of more than $16k, one has to focus on Line 7 of "Part 2". Please read pg. 20 of the instructions sheets for form 709 - most filers will write $4,769.800 on Line 7 which is the Applicable Credit amount for the Applicable Exclusion amount of $12,060.000. If a person has used form 709 in former years then lines 2, 5, & 8 must also be filled in. The amounts I have just cited will be different when filing taxes for 2023.
@FinalesFunkeln
2 жыл бұрын
I am in a situation this year where I am being gifted a large sum of cash from my mother. This wasn’t a transaction or business on my part. She sold real estate in a foreign land and now wants to gift me back a percentage for helping her out back in October 2020. To my understanding of this video and the IRS gifting language, I can go to my bank and deposit $16k in cash and claim it as a gift. I was hesitant because I know the irs wants to report any transactions over $10k but this isn’t a transaction on my part.
@nayeliguzman172
Жыл бұрын
Good question.
@lynej2011
Жыл бұрын
I hope he answers because I need to know.
@andrewroth9175
2 жыл бұрын
Another plus with gifting would be is funding families Roth IRAs, for children and grandchildren which would grow tax free. I good way to get back the stretch IRA that we lost in the Secure Act.
@SafeguardWealthManagement
2 жыл бұрын
Yes, great add on provided they have earned income to be able to contribute to Roth.
@mnphoneemail113
7 ай бұрын
Question on Gift Tax Form 709. How does one report gifts following the death of a spouse? Instructions (2023 & 24 pg 7) state if splitting with spouse all gifts must be split and only gifts given while married can be split. Example - I split our gifts up to the date of my wife's death but I continued to gift following her death.
@onlywenilaugh6589
Ай бұрын
How does the IRS know if someone gives their kid 100K and don't file? Seems to me it's difficult to track since recipient doesn't report getting the money. Especially if they don't bank it.
@mrbigcat9
5 ай бұрын
Can you gift to the same person the maximum for that year every year with out filing a Form 709 Gift Tax Return?
@carmenquevedo1888
8 ай бұрын
Is the only exclusion for medical and college/school where you pay directly? What if someone pays off your debt directly to the credit card company and loan company. Would that count as well as something not going towards the yearly gift amount? Or would that still be considered a gift?
@futureproof001
6 ай бұрын
What about this Child is US citizen going to school in the US One of the parents is a non citizen that has no tax liability to the USA and never been there Non US citizen parent has an estate outside of the USA that has no ties or obligation tax wise to the USA but wants to gift the child an amount over the $16000? Since they have no ties to, or obligation to the IRS in the USA how would that be treated? Thanks
@boyboy-xe6rx
Жыл бұрын
If I add my best friend in my second hand car title along with my name, as joint tenants with right of survivorship, is this considered a gift? If so If full car costs around 17000$, then 17000$ is gift amount? Or 17000$/2 is gift amount?
@scooter6472
Жыл бұрын
Great information. For spouses, if the want to gift 32,000 can they do it in one lump sum or should it be separated into two payments of 16,000 per spouse?
@ckp2ator389
Жыл бұрын
My spouse and I wrote two separate checks (i.e., for $16,000 each) to our son, one check signed by me, the other by my spouse. Even though it came from the same joint checking account, my understanding is we don't have to file form 709 for marital gift splitting. I will have the two separate checks from two different individuals to present to the IRS if audited.
@TheDansana
Жыл бұрын
So, mom gifts $15k in cash, actual cash bills. Child deposits the cash. The bank makes a report of the large cash deposit and another alphabet agency want to know whom the gift was from. Is the child required to offer up a name?
@donnaberube5480
Жыл бұрын
If one makes a revocable trust within which 20000$ is designated to be gifted a person, Does the Trustee file a form 709 with the irs the year the trust is created as donor of the planned gift?
@cmathias4993
Жыл бұрын
So what about the recipient of the gift? What are their tax implications and required reporting?
@ckp2ator389
Жыл бұрын
No taxes owed and no reporting required.
@jamescronin5987
Жыл бұрын
My wife and myself purchased a new car for my daughter for $24000.00 Would we need to fill out form 709? The money came from our joint account.
@demar1496
Жыл бұрын
If I exceed the annual limit this year by 7M, and file form 709 (leaving roughly 10M future exclusion from the 16.92M current limit)... and the unified credit is later reduced back to roughly 7M in 2026..... do I maintain a 7M future exclusion (as I had 10M remaining, but capped at 7M)....**OR** does the gift of today totally eliminate my unified credit since I had used 7M prior to the exclusion reduction?
@SafeguardWealthManagement
Жыл бұрын
If I'm understanding your question correctly, its in relation to the exemption we expect to cut in half in 2026? Right now its around $13M (w/ rounding) for a single filer and will cut in half in 2026. The amount you use right now over the future exemption will be 'saved'. For instance, say you gifted $10M, you would be able to use the current exemption amount but have no remaining exemption left after 2025.
@demar1496
Жыл бұрын
@@SafeguardWealthManagement Thank you! That was my question exactly.
@Steven-vi5nb
2 жыл бұрын
If my wife and I provide free rent to a family member worth over $32k/year is that considered a gift counted against the max annual gift limit?
@SafeguardWealthManagement
2 жыл бұрын
Yes, the IRS technically considers this a gift.
@Steven-vi5nb
2 жыл бұрын
@@SafeguardWealthManagement I checked out your website and it's mainly focused on financial planning/advising. Do you offer tax planning services separate from financial planning?
@Cableman-hr2uu
4 ай бұрын
gift limit ?? what barbarian country is that ?? anybody has the basic right to give any of their property to another person especially family members or even friends or even unknown people, anybody can also receive any gift from anybody and is a very natural thing, if there is a country which takes this basic human right away, I would say this country is really going back to the stone age or ruled by barbarians.
@mi13estrellas
Жыл бұрын
What about the recipient? Does the recipient have to pay taxes on the gift received a 16k or of 32k ( paid in two 16k installments) ? Does it matter if it's parents or a friend?
@ckp2ator389
Жыл бұрын
No, the recipient does not owe a gift tax no matter the amount. It doesn't matter the relationship.
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