Does the IRS require a gift tax return if a taxpayer and spouse each give $20,000 to their son in one year?
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Yes, the IRS requires a gift tax return (Form 709) to be filed in this scenario.
1. Legal Analysis
- For 2025, the annual gift tax exclusion per donee is $19,000.
- If a donor gives more than $19,000 to any one person in a year, the excess is a taxable gift and must be reported on Form 709, even if no tax is ultimately due because of the lifetime exclusion.
- Gift splitting allows a married couple to elect to treat gifts made by either spouse to a third party as made one-half by each, but both must consent to this election.
2. Application to the Facts
- Each spouse gives $20,000 to their son, totaling $40,000.
- If gift splitting is elected, each gift is treated as $10,000 from each spouse to the son, for a total of $20,000 per spouse to the son.
- $20,000 per spouse to the son exceeds the $19,000 annual exclusion by $1,000 per spouse.
- Because the amount given by each spouse to the son exceeds the annual exclusion, a gift tax return is required, even if the excess is covered by the lifetime exclusion and no tax is due.
3. Filing Requirements
- Each spouse must file a separate Form 709 if they both make gifts exceeding the annual exclusion to the same donee, and both must consent to gift splitting for the election to be valid.
- The return must report the total gifts, the amount excluded, and the amount applied to the lifetime exclusion.
4. Conclusion
A gift tax return (Form 709) is required for both spouses because each gave $20,000 to their son in 2025, which exceeds the $19,000 annual exclusion per donee. Even with gift splitting, the amount per spouse per donee is $20,000, so the excess must be reported.
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