Further, the IRS determined that since the election to split gifts
was determined to be irrevocable, GST exemption would be automatically allocated to each one-half transfer reported on the taxpayers' respective gift tax returns.
if the donor was married and gave the gifts from separate funds, a gift tax return could be filed by each spouse if the non-donor spouse agreed to "split gifts
" and report half of all of the donor's gifts on his/her own return.
Furthermore, unmarried couples are not eligible to use the Deceased Spousal Unused Exemption Amount or split gifts
on a federal gift tax return.
--Does the POA include the authority to make and split gifts
Eve can file a gift tax return (IRS Form 709), on which Brett gives his consent to split gifts
, so Brett has made a $14,000 gift to each person for tax purposes, if not in reality.
* Gift-splitting--Same-sex married couples, like their opposite-sex counterparts, are now permitted to split gifts
, provided both spouses are U.S.
Gifts up to the limit of the gift tax annual exclusion and qualified transfers (see Q 7596), but not split gifts
, do not require the filing of a return.
(1) Returns must be filed if a married couple elects to split gifts
for the year (Q 906).
can be made for purposes of the GST tax.
For 2009, the exclusion is $13,000 per recipient ($26,000 if you split gifts
with your spouse), up from $12,000 last year.
The premature death of one of the insured(s) of a TOLI survivor life insurance policy will reduce the ability to split gifts
in the future, thereby limiting the amount of annual exclusion gifts available to fund future premiums.
40 Donor's Life Expectancy 42.5 Years Annual Exclusion $12,000 (in 2007) Split Gifts
Yes Number of Donees 5 Annual Gifts ($12,000 x 2 x 5) $120,000 Donor's Projected Estate Tax Bracket 45% (in 2007) No Growth Total Amount of Gifts ($120,000 x 43) $5,160,000 Potential Estate Tax Savings (45%) $2,322,000 With Growth Annual After-Tax Return on Gifts 4% Value of Gifts at Life Expectancy $13,729,545 Potential Estate Tax Savings (45%) $6,178,295 If the beneficiaries, either inside or outside a trust, used the annual gifts (each of the five donees were given $24,000, a total of $120,000 a year of gifts in the above example) to purchase life insurance on the life of the client, the estate tax leverage in the illustration above could be multiplied many times over.