schirallicpa Posted April 6, 2018 Report Share Posted April 6, 2018 I have done the 706 a few times when people have nice clean simple gifts to daughters or sons. However, this year I have a client that decided to gift his grandchildren (2) $50000 each. So he has to pay $20000 tax on this?? That just seems crazy. I just have to confirm this with someone. Maybe I;m missing something big. What is 2632(b) election. I'm in deeper water than I anticipated. Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted April 6, 2018 Report Share Posted April 6, 2018 Use Form 709, Gift Tax Return. The exclusion is $5mil, tax credit $2mil+ The potential tax is applied against the lifetime credit. Since this is a generation skip, look at the election https://www.law.cornell.edu/uscode/text/26/2632 I think with a little reading and the correct form, you will figure it out. With such generosity, take into account any earlier filed 709's. 3 Quote Link to comment Share on other sites More sharing options...
SaraEA Posted April 7, 2018 Report Share Posted April 7, 2018 Unless your client is on track to gift and have enough left over at death to total $5.9m, you don't have to worry about the election. Do be sure to enter the gifts to the grandchildren on the GST section of the 709. 1 Quote Link to comment Share on other sites More sharing options...
schirallicpa Posted April 7, 2018 Author Report Share Posted April 7, 2018 709 I meant! Thank you for the link Margaret. Just starting a return from an Ohio resident who has moved to NY. Perhaps I will be bugging you again soon! 2 Quote Link to comment Share on other sites More sharing options...
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