Reporting of Gifts for Purposes of the Federal Gift Tax

If you gift more than $15,000 — $30,000 with your spouse — annually to one person or to as many people as you wish — in a calendar year – and even though you are shielded from Gift Tax liability because of the unified credit — you have made a taxable gift and are required to file a Gift Tax return, Form 709.

You do not have to file a return to report gifts to your spouse regardless of the amount of the gift and regardless of whether the gifts are present or future interests.

If the only gifts you made during the year are deductible gifts to charities, you must still file a return if any of the gifts were of future interests or exceeded $14,000 in 2015, 2016 and 2017.

As with the income tax return, the Gift Tax return 709 is due on April 15 of the year following the year in which you made the gift. The Gift Tax (if any) is due at the time of filing the return. Extensions are available, but interest will be charged from the regular due date of the return.

Case Studies: Reporting of Gifts for Purposes of the Federal Gift Tax

Case Study 1: Annual Exclusion Gift

Sarah wants to give her niece, Emily, a monetary gift to help with her college expenses. Sarah is aware that she can make annual exclusion gifts of up to $15,000 ($30,000 for married couples) per recipient without incurring gift tax or having to file a gift tax return. Sarah writes a check for $15,000 to Emily and properly documents the gift. As the gift falls within the annual exclusion limit, Sarah does not need to report it or file a gift tax return.

Case Study 2: Gift to a Non-Spouse

John wants to support his best friend, Mark, who is starting a small business. John decides to gift $50,000 to Mark to help him with startup costs. Since the gift exceeds the annual exclusion limit, John is required to file a gift tax return, Form 709. He includes the gift amount on the form and calculates any potential gift tax due. Although the gift may reduce his lifetime unified credit, John does not owe any gift tax because his lifetime exemption covers the gift amount.

Case Study 3: Charitable Gifts

Amy is passionate about supporting charitable organizations. In the previous year, she made several large donations totaling $100,000 to different charities. While gifts to qualified charitable organizations are generally not subject to gift tax, Amy must still report the gifts on her gift tax return, Form 709. Amy ensures that she keeps proper documentation of her donations and files the gift tax return accordingly.