What is gift splitting

The point is that for the allocation of GST exemption to be split, the gift must be split for gift tax purposes. Kwon also noted that the gift-splitting election may be filed on a late-filed gift tax return as long as it is the first filed return for that year.

Gift splitting is effective retroactively to the date of the gift. Kwon next reminded us that gift-splitting is a gift tax concept and therefore does not apply for estate tax purposes. IRC Secs. This is not so for the consenting spouse. Furthermore, Ms. Kwon recommended electing in or out of the automatic allocation of the GST exemption on the first gift tax return filed for a gift to a trust.

Remember that when you elect to split gifts with your spouse, you, the donor, must file a gift tax return and your spouse, the nondonor, must consent by checking a box on the return and signing it. Contact us with any questions regarding making gifts. Toggle navigation June 25, Share via email Print. Scott Eichar. Measure ad performance. Select basic ads.

Create a personalised ads profile. Select personalised ads. Apply market research to generate audience insights. Measure content performance. Develop and improve products. List of Partners vendors. The Balance Budgeting. Table of Contents Expand. Table of Contents. Definition and Examples of Gift Splitting. How Gift Splitting Works. By Rebecca Lake. Rebecca Lake has over a decade of experience researching and writing hundreds of articles on retirement, investing, budgeting, banking, loans, and more.

Learn about our editorial policies. Published August 23, Key Takeaways Gift splitting can help to avoid having to pay gift tax on financial gifts to family members or friends. Gift tax applies to the transfer of property or other financial gifts from one person to another.