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John Legal
John Legal, Attorney
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Help Please. I do not understand about the so called 709 IRS

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Help Please. I do not understand about the so called 709 IRS form for gift. My father wanted a joint savings and joint checking with both our names. He has now passed away. He had a will but not a trust. Dad wanted the money and house to be split between my brother, in NJ, and myself. But now all the money is in my name. I asked a CPA and he said to wait until several months have gone by and send him half of the money. Next year come and see him to file for a gift. I asked him will it be taxable. Here is where I am confused. He really did not make that part clear. The amount will be approx. 130,000 maybe a little more. Will this be taxable next year?
Welcome! Thank you for your question.

The state of Michigan does not have a gift tax. There is a federal gift tax. Any gift over $14,000 annually requires a federal gift tax return to be filed (709). However, there is a federal lifetime gift tax exemption of $5.120 million dollars. The gift that you give your brother over $14,000 in one year will reduce your $5.120 million dollar exemption but you will not owe gift tax until your total gifts over $14,000 annually exceed the $5.120 million dollars in your lifetime.

Most people never even get close to this. So the short answer is that you will have to report the gift but you will not have to pay tax.

As for the advise of the accountant to wait. I am not sure exactly what the account would have told you this. However, it is possible that you would wait to assure that any creditor that would owed money by your father had stepped forward to make a claim against any assets he owned upon death prior to distributing his money. If you can concerned about creditors you should check with your local probate court about publishing a notice to creditors without doing a formal probate. If your probate court will allow you to do this then the creditors will be out of luck after the notice to creditors time period expires. This will guarantee that the money is not subject to a future creditor claim.

I cannot provide you with legal advise. I have provided you with information about the law related to your question. My answer, and any information that you find online, should not take the place of having a consultation with a lawyer in your area to advise you regarding your specific issues.

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Customer: replied 3 years ago.


I did have another question. When I have filed tax next year, and the gift paperwork has been submitted....I am I doing this for just me or both my brother and myself. Does he have to file for receiving gift as well?


A CPA told me that it will cost be $600 to have this gift paperwork included in my taxes. Should I look around? Or do you think this is feasible price?

Customer: replied 3 years ago.
Relist: Other.
I wanted to ask a few more questions about the same subject but he is now offline
Sorry, I had to be away a bit. I will be on and offline today. I should be able to get back to any question you have in about an hour.

You only file a gift tax return for gifts you made. The recipient of a gift, your brother, does not have to file a return.

$600 seems a bit high as the return is very easy with the one cash gift being reported. I would think it should cost less than 1/2 of that.
John Legal, Attorney
Category: Legal
Satisfied Customers: 4631
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Customer: replied 3 years ago.

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I did rate as excellent plus tip. Very happy with your answers. The only other time you may receive an excellent service rating will be when I ask another question. Thank you

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