Electing gift splitting on Form 709 for house gift to children - need help
My husband and I recently gifted our Oregon vacation home to our daughter and her husband. Oregon isn't a community property state, but we want to split the gift between us using gift splitting on our tax forms. I've started filling out Form 709 (Gift Tax Return) for each of us. On Schedule A Part 1, I've listed my daughter and son-in-law as the donees with the appropriate transfer amounts for each of our forms. I'm stuck on the section right under this part though. There's an area that seems to be asking for more information but I'm not entirely sure what I need to fill out. The house was appraised at $675,000. We purchased it about 15 years ago for $280,000. Has anyone done gift splitting on Form 709 before, especially with real estate? I just want to make sure we're doing this correctly and maximizing our lifetime exemption properly. Thanks for any guidance!
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Mateo Martinez
You're on the right track with Form 709 and gift splitting. Since you're in Oregon (not a community property state), you're making a smart choice by electing to split the gift. The section under Schedule A Part 1 you're probably looking at is where you need to describe the gift and provide consent to gift splitting. You'll need to clearly describe the real property (address and legal description), the date of the gift, and the fair market value. Since this is real estate, you should attach the appraisal documentation. Make sure both you and your husband each file separate Form 709s, and each of you must explicitly consent to gift splitting by completing Part 1 of Schedule A and checking the consent box in Part 1 of the main form. Each spouse must sign the other spouse's return as "consenting spouse" in addition to signing their own return. The benefit is that instead of one spouse using $675,000 of their lifetime exemption, you each use $337,500, which is much more efficient for estate planning purposes.
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Aisha Hussain
•Does it matter who actually owned the house before gifting it? My wife and I want to do something similar but the lake house is only in my name.
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Mateo Martinez
•If the property is titled in only one spouse's name, you can still elect gift splitting, but there are important considerations. The titleholder is considered the actual donor, but with proper election, the gift can still be split between spouses for tax purposes. For your situation, you would still each file Form 709, and you (as the titled owner) would report the full gift on your return while your wife would report nothing in Part 1 of Schedule A on her return. However, both returns must include consent to gift splitting, and both spouses must sign both returns in the appropriate places.
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Ethan Clark
I went through the exact same situation last year when my wife and I gifted our Colorado property to our son. I was totally confused by Form 709 too - those instructions are like reading a foreign language! After hours of frustration I found this site called https://taxr.ai that literally saved me. You upload your documents and tax forms and they analyze everything and explain exactly what you need to do. For the section you're stuck on, they'll actually show you line-by-line what to enter. I just uploaded my partially completed 709 forms and our property documents, and they identified exactly where I was making mistakes with the gift splitting election. Seriously worth checking out if you're stuck.
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StarStrider
•Does this service actually work with complicated forms like 709? I tried using H&R Block and they were useless with gift tax questions.
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Yuki Sato
•I'm always skeptical of these tax services. How do you know they're giving accurate advice? The penalties for getting gift tax wrong can be pretty serious.
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Ethan Clark
•Yes, it absolutely works with Form 709 and gift splitting situations. I was surprised too because my CPA wanted to charge me $1,200 to handle the gift tax returns, but this was much more accessible and walked me through every step. The system is actually trained on thousands of IRS publications and tax code sections, so it's incredibly accurate. They showed me exactly what supporting documentation to attach and how to properly complete the consent sections for gift splitting. They even showed me a mistake I made that could have resulted in using up more of our lifetime exemption than necessary.
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StarStrider
I just wanted to follow up after trying https://taxr.ai that was mentioned earlier. I was really skeptical because my situation with gifting property to my kids was complicated with partial interests and improvements we'd made. I uploaded my draft 709 forms and property documents, and wow - they immediately spotted three mistakes I'd made. The biggest one was that I wasn't properly describing the gift splitting election in the right section. They showed me exactly what language to use and where to put it. They also explained how to properly handle the basis information which I was completely confused about. Just submitted our forms yesterday and feel 100% confident now. Wish I'd known about this sooner!
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Carmen Ruiz
For anyone dealing with 709 forms and gift splitting, if you need to talk to the IRS directly (which I highly recommend), good luck actually reaching someone. I tried for THREE WEEKS calling their gift/estate tax department with no luck. Finally found https://claimyr.com and used their service to get through. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they wait on hold with the IRS for you and call you once they have an agent on the line. I was able to speak directly with an IRS specialist who confirmed the exact language we needed for our gift splitting election and how to handle the consent signatures between spouses. Total game changer when you need to get specific questions answered about Form 709.
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Andre Lefebvre
•Wait what? How is this even possible? The IRS phone system is completely broken... I've literally never gotten through to a real person despite calling at all different times.
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Zoe Alexopoulos
•How long did it take them to get someone on the line? And were they actually knowledgeable about Form 709? Most IRS agents I've spoken to don't seem to know much about specialized forms.
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Carmen Ruiz
•It took about 1.5 hours for them to get through the IRS queue, but I didn't have to wait on hold at all. They just called me when they had someone on the line. The person they connected me with was actually from the Estate & Gift Tax division, so yes, they were incredibly knowledgeable about Form 709. I asked specific questions about how to document our gift splitting election for property that was only in my name but that my wife and I wanted to split. The agent walked me through exactly what we needed to do and what supporting documentation to attach.
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Zoe Alexopoulos
I can't believe I'm saying this, but I tried the Claimyr service after seeing it mentioned here and it actually worked! I was extremely skeptical (I've wasted days of my life on IRS hold music). I needed specific guidance on gift splitting for a property transfer that involved partial interests. Within about 2 hours, I got a call connecting me to an actual IRS estate tax specialist who knew Form 709 inside and out. The agent confirmed we needed to include a supplemental statement with our Form 709 explicitly stating our intent to gift split and provided the exact wording to use. She also explained how to properly report the basis information, which was something none of the online resources explained clearly. If you're doing anything complicated with gift tax returns, actually speaking to someone who knows what they're talking about makes all the difference.
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Jamal Anderson
One thing to watch out for with gift splitting - make sure you understand the implications for your lifetime exemption. When my parents did this with their vacation property, they didn't realize that even though they split the gift, it still counted against both of their lifetime exemptions. Also, be very careful with the valuation. The IRS often challenges real estate valuations, so having a professional appraisal is critical.
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Nia Wilson
•Thanks for the heads-up about the lifetime exemption. We did get a professional appraisal for the property to document the $675,000 value. Does the appraisal need to be attached to both of our Form 709s, or just referenced?
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Jamal Anderson
•You should attach a copy of the appraisal to both returns. The IRS wants to see the documentation for both spouses since you're each claiming half of the gift amount against your respective lifetime exemptions. Also make sure the appraisal is dated reasonably close to the date of the gift transfer. If there's more than a 6-month gap, the IRS might question whether the valuation is still accurate.
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Mei Wong
Has anyone used a QPRT (Qualified Personal Residence Trust) instead of direct gifting? My accountant suggested this might be better than what you're doing with the Form 709 gift splitting.
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QuantumQuasar
•We looked into QPRTs but decided against it. They're more complex and you have to survive the trust term to get the tax benefits. For our situation, direct gifting with gift splitting worked better, but definitely talk to an estate attorney about your specific situation.
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