Not reporting gifts given over $13,000 - Taxpayers giving gifts in excess of $13,000 in 2009 as a single filer or $26,000 as a split gift
by joint filers have one of two options to satisfy their tax obligation.
44) Accordingly, the IRS concluded that one-half of the gift should not be included in the adjusted taxable gifts of the nondonor spouse and the tentative tax should not be reduced by any amount of gift tax payable on the split gift
The split gift
election applies to all gifts made during the taxable year--the spouses cannot pick and choose which ones to split.
A split gift
is a gift made to a third party, in which the gift is considered as made one-half by each spouse.
section] 2513 often reduces the gift tax exposure: However, if the grantor dies during the QPRT term, the split gift
may result in higher estate taxes than if the gift had not been split because the spouse's adjusted taxable gifts are not reduced by the gift included in the grantor's gross estate.
28 A Crummey withdrawal power may not work for a split gift
by spouses because the beneficiary's right to withdraw under the power is not effective for the non-donor spouse until the split gift
election is made on the return.
In addition, because the gift tax rates are graduated, a split gift
allows the total taxable gift to be taxed at each spouse's lower rate before either spouse moves on to the next bracket.
On H's Form 709, T indicated her consent to the split gift
While consenting to split gifts
that use only the annual exclusion may not cause adverse consequences, if there is use of the unified credit for a split gift
, it is possible that there could be some detriment to the nondonor spouse's estate.
While any gift tax paid by W on her split gift
will be credited in computing her estate tax, her split gift
will push her subsequent taxable gifts and taxable estate into higher marginal rate brackets (or use up her unified transfer tax credit).
Gift tax paid by a decedent-spouse on a split gift
was includible in the gross estate.
The return indicated that the gifts were split gifts
and claimed annual gift tax exclusions of $720,000 for each of the Mikels ($12,000 per beneficiary multiplied by 60 beneficiaries).