Hi, we’re buying a house, and our parents are helping with the down payment. They have a joint account and file taxes together. If my dad gives me $15,000, my mom gives me $15,000, and they do the same for my wife (totaling $60,000), do they need to file Form 709? Thanks in advance!
If they make four separate gifts under $18,000 each, they don’t need to file Form 709.
Ray said:
If they make four separate gifts under $18,000 each, they don’t need to file Form 709.
Thanks! Yes, it can be four separate gifts. But what about what others are saying? Some mention gift splitting, and others say it’s fine. I’m confused.
@Rowan
If they write one check from their joint account, they’ll need to file Form 709 to split the gift between them. No gift tax is owed unless they’ve used up their lifetime exemption. But if they write separate checks, Form 709 might not be needed unless their account is in a community property state.
Rowan said:
@Cade
How can I check if we’re in a community property state? We’re in New Jersey.
New Jersey isn’t a community property state. To avoid confusion, your parents should file Form 709 and elect gift splitting.
That’s exactly what I’m confused about. Just trying to get a clear answer. Thanks!
Form 709 rules can get tricky with gifts from joint accounts. My office usually treats four separate $15,000 checks as fine without filing Form 709.
Briar said:
Form 709 rules can get tricky with gifts from joint accounts. My office usually treats four separate $15,000 checks as fine without filing Form 709.
When you say your office, what kind of work do you do? I’ve been reading online, and most agree with what you’re saying.
No, they don’t need to file.
They’ll need to issue separate checks from each parent to each of you. If not, they’ll need to file Form 709.
Xander said:
They’ll need to issue separate checks from each parent to each of you. If not, they’ll need to file Form 709.
They’re planning to do an online transfer from their joint account. Would adding a note about who it’s from and who it’s for help?
This would be considered gift splitting, so yes, Form 709 would be required. Here’s more info: https://www.investopedia.com/terms/g/gift-splitting.asp
@Kendall
Is it really gift splitting if it’s four separate gifts? Some say what you’re saying, but others say the opposite. I’m just trying to figure it out.
Rowan said:
@Kendall
Is it really gift splitting if it’s four separate gifts? Some say what you’re saying, but others say the opposite. I’m just trying to figure it out.
The IRS sees them as one unit. If they give more than $18,000 to one person, they must file Form 709 for split gifts. For a $60,000 total gift in one year, they’d need to file the form to stay compliant.