Updated July 22, 2015
Gift Tax Return/Generation Skipping Tax Return/Form 709 Chicago Illinois
The United States Gift and Generation Skipping Transfer Tax Return or Form 709 is the return used when any donor transfers a gift over the annual exclusion. This applies whether the transfer of property by gift is direct or indirect, in trust or otherwise. The property being transferred may be real, personal, tangible, or intangible. However, transfers of gifts to qualifying political organizations are not considered gifts.
This tax only applies to gifts in excess of the annual Gift Tax Exclusion, which in 2010 was $13,000. So anything donated or transferred valued at under $13,000 in that year per donor was not subject to The Gift tax. An example would be, in that year, if you have a son, daughter-in-law, and three grandchildren, you could give up to $13,000 to each of them or $65,000 in that year without being subject to Gift Taxes. This is called Gift Splitting.
Gifts to a taxpayer’s spouse are generally not taxable if the spouse is a U.S. Citizen. If the gifts made during a year were given to a qualified charity, and were transferred in whole, they are excluded. Transfers that represent support are not considered gifts. Transfers made on behalf of another for the purposes of tuition, medical expenses, or to an educational organization are also not considered gifts.
If the value of a gift is over the Annual Gift Tax Exclusion, then the donor has a choice to make. One may either pay the tax at the time of transfer using the Gift Tax Return. Or they may use The Generation Skipping portion of Form 709 and have the gift included in the estate. Once the donor passes away, the estate will then pay the applicable tax.
If you are having problems with your Gift Tax Return/Generation Skipping Tax Return/Form 709 Chicago Illinois or have issues with your accounting in general, we would love to help. I enjoy hearing from my readers, and can be contacted at
Chris@AccountingSolutionsltd.com
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Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.