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Greetings, Although a gift tax return on Form 709 is required when gifts for the year are more than the annual exclusion amount, there is not any gift tax due until the lifetime limit of $5 million in gifts is exceeded. The gift tax return would reduce the amount of lifetime gifts before tax is due by $1000. No tax would be payable with that return. For information from the IRS on this topic and links to forms see http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Frequently-Asked-Questions-on-Gift-Taxes Please ask if you need clarification.Thank you.