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Tax Law (Questions About Taxes)/form 709 for child's 529 account

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Question
My husband and I are filling out a form 709 for the first time, as in 2012 we "gifted" $105,000 to our daughter's 529 account.  I am confused about whether or not we should split this gift, and if we do, then under Schedule A Part 1 am I simply writing the exact same information twice (once for myself and once under gifts made by spouse)?  Additionally, what do I put in column D, donor's adjusted basis of gift?

Thank you!

Answer
Christina,

Thanks for your question.

If you split the gift, you accomplish two things.  First, you will have a lower "taxable gift."  I realize this is below the threshold for having to pay gift tax, but it preserves a larger amount for lifetime use for gift and estate tax purposes.  Second, and related, it spreads out the remaining lifetime exemption between both of you. it is highly unlikely that you will use all of your lifetime exemption, but better be safe than sorry.  I realize some of the above may be confusing to you, but it would be too long to explain it all in detail.  You can ask a follow up regarding anything you don't understand.

Assuming you placed cash in the account, your adjusted basis is the amount of cash you deposited.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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