Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 3
>> I realize that giving more than the amount allowable for 2005 requires completion of gift tax form. Is there a table showing how much tax would be payable if I givw 5,000. more than tyhe 11,000. for 2005. Also would that be filed and payable along with the 1040 return? <<

If I read the tables right, you'd owe 18% on the excess -- or $900, unless you use some of your lifetime gift tax exemption.

HOWEVER -- if you file Form 709, you may not owe tax. Everyone gets a $1 million lifetime gift tax exemption, so if you gift an excess amount, you use Form 709 to keep track of the reduced exemption. In your case, if you'd never made a gift that large before, you can file Form 709, declare the $5,000 excess and apply it against your $1 million limit. You now have a $995,000 lifetime exemption remaining, and you own no tax on the gift.

You may be able to avoid Form 709 completely. If you are married or you are giving to a couple, you can avoid it by having different parties gift part of the amount. For example, you could give $6,500 to someone, and you could give $6,500 to their spouse. Or you could give $6,500 to someone and your spouse could give $6,500 to someone. These are under the $11,000 threshold (which applies to gives from one individual to another individual in any year) , so you don't have to deal with Form 709 OR reduce your lifetime exemption.

#29
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.