split gift

Split Gift

The act of a married couple giving gifts to a single beneficiary separately in order to avoid the gift tax. Givers of gifts in excess of $10,000 are required to pay the gift tax. In order to avoid this through gift splitting, a husband and a wife may separately give up to $10,000, meaning that the beneficiary receives up to $20,000 without subjecting the giver to the tax.

split gift

A gift from one partner in a marriage to someone outside the marriage when one-half of the gift is assumed by law to have been made by each spouse. A split gift permits the $10,000 annual gift tax exclusion per recipient to effectively be $20,000 per recipient when the gift originates from a married couple.
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Letter Ruling 201811003: In Letter Ruling 201811003, the IRS ruled: (1) even though a husband's and wife's gift tax returns erroneously reported that a split gift was made 75% by the husband and 25% by the wife, the amount of the taxable gift could not be adjusted because the statute of limitation for assessment of gift tax had expired; and (2) the executor of the wife's estate could make a late allocation of GST exemption to prior years' transfers.
(2ev) Custodial property is not included in the estate of a custodian who consented to a split gift of the property by her spouse.
If spouses elected to treat the initial transfer as a split gift (see Q 906), then (1) each spouse may be entitled to reductions if there is a transfer of the IRC Section 2701 interest during their joint lives; and (2) if there is a transfer of the IRC Section 2701 interest at or after the death of either spouse, then (a) the donor spouse's estate may be entitled to reductions; and (b) the consenting spouse's aggregate sum of taxable gifts and gift tax payable on prior gifts are reduced to eliminate any remaining effect of IRC Section 2701 if the consenting spouse survives the donor spouse.
When using the maximum available annual split gift to fund the premiums for a survivor life policy held in an ILIT, it is important to consider the consequences of one insured dying prematurely.
The split gift election applies to all gifts made during the taxable year--the spouses cannot pick and choose which ones to split.
If section 2513(a) deems such a split gift to have come 50% from the husband, does this trigger the section 2036 trap?
Same facts as in preceding example, except that for federal gift tax purposes G's wife consented to a split gift of the $10 million (see Q 7579).
Same facts as in preceding example, except that for federal gift tax purposes G's wife consented to a split gift of the $10 million (see Q 954).Thus, for GST tax purposes as well, the gift is considered split between the spouses.
Using a split gift election, when a husband or wife makes a gift to a third person, the gift is treated as having been made one-half by the husband and one-half by the wife.
However, a GRIT funded with assets worth up to $600,000 ($1,200,000 with a split gift) may be considered even if the remainderman is a family member since no gift tax may be currently payable.
If a split gift is made for gift tax purposes (see Q 1530), such gift will be so treated for purposes of the GST tax.
[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.