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#34923 - 12/12/01 05:43 PM Gift Tax Exclusion Limit for Married Filing Jointly
ibickned Offline
Junior Member

Registered: 12/12/01
Posts: 1
Loc: New York, New York, US
I currently have two 529 plans set up with Fidelity/ New Hampshire Plan--one for each of my children. I have been contributing 10,000 per year per child to stay within the gift tax exclusion limit. However, it has come to my attention, that I may be able to contribute up to 20,000 per year per child because I file my taxes jointly with my husband. Is that correct even though the 529 accounts are in my name only? If I keep the Fidelity account contribution at 10,000 per year per child, can I open two new 529 plan accounts (again in my name only) in the TIAA-CFEF/New York Plan and contribute 10,000 per year per child and still be within the gift tax exclusion limit?

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#34924 - 12/12/01 06:23 PM Re: Gift Tax Exclusion Limit for Married Filing Jointly
Drew Offline
Member

Registered: 01/09/00
Posts: 2987
Loc: Easton, PA, USA
You can elect a split gift with spouse for 20K per kid, $22K starting in 2002 on form 709

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#34925 - 12/13/01 11:01 AM Re: Gift Tax Exclusion Limit for Married Filing Jointly
Mike Erpenbach Offline
Member

Registered: 10/22/01
Posts: 565
Loc: St. Paul, MN U.S.
If you contribute $10K per child per year to the Fidelity 529 and $10K per child per year to NY 529 and file joint taxes you should be OK. Regardless of whether you or your spouse are the account owner it can be viwed as:
$10K from you to each child in NH 529 and
$10K from spouse to each child in NY 529

Check with your tax preparer about filling out the form...oops! I sure others on this board know the form # (It's the IRS, of course there's a form )

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#34926 - 12/13/01 11:02 AM Re: Gift Tax Exclusion Limit for Married Filing Jointly
Mike Erpenbach Offline
Member

Registered: 10/22/01
Posts: 565
Loc: St. Paul, MN U.S.
That's right Drew, form 709.

I must have had only one eye open

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#34927 - 12/13/01 12:53 PM Re: Gift Tax Exclusion Limit for Married Filing Jointly
nickl Offline
Junior Member

Registered: 12/13/01
Posts: 1
Loc: Piedmont, CA 94611
Thanks for the earlier information. It sounds like one person can do a split gift in two separate State plans. Going further, can a married grandparent with two grandchildren set up accounts in the same State plan (Iowa, in this case) and contribute the full $40K (2 donors and 2 beneficiaries @ $10K/per) in that person's name alone?

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#34928 - 12/13/01 03:24 PM Re: Gift Tax Exclusion Limit for Married Filing Jointly
schmoop Offline
Member

Registered: 07/19/00
Posts: 264
Loc: Bethesda, MD, USA
Correct. A spouse can transfer $20K to another person and, provided the other spouse consents on a gift tax return, the gift will be counted as if it were $10k from each spouse.

It doesn't matter how many savings plans the giver uses. Just add up the total dollars transferred to each individual beneficiary in a calendar year and then split that number. Keep in mind that the value of birthday and holiday gifts count (at least if you are a stickler like me).

You mentioned that you filed jointly with your spouse. This fact actually doesn't make a difference. The key to gift-splitting is simply being married and filing a gift tax return electing to split the gifts.

Write back if you have additional questions.

schmoop

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#34929 - 12/13/01 03:40 PM Re: Gift Tax Exclusion Limit for Married Filing Jointly
SqueakyChu Offline
Member

Registered: 12/04/01
Posts: 35
If I gift $5000 this year in an account that's in my name as owner and my husband gifts $10,000 this year in an account that's in his name, do we have to file a gift tax return? How do we do that? Is there a special IRS form? Do I pick it up at an IRS office? Or can we just assume that it's not over the $20,000 year limit for a joint return and not file any paperwork to the IRS?

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#34930 - 12/13/01 03:42 PM Re: Gift Tax Exclusion Limit for Married Filing Jointly
SqueakyChu Offline
Member

Registered: 12/04/01
Posts: 35
I'm sorry. You did say it's form 709. But do we need to file it if our joint gift is under $20,000 this year?

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