The election under section 529(c)(2)(B) to treat transfers to a qualified tuition program as made ratably over a 5-year period has been elected. The check box on line B at the top of Schedule A has been checked. Report only 20% of total contributions (up to $75,000) on current year Form 709. Report an additional 20% of the total in each of the succeeding 4 years. See IRS instructions for more details. Attach an explanation to Form 709 including the total amount contributed per individual beneficiary, the amount for which the election is being made, and the name of the individual for whom the contribution was made.
This critical diagnostic for making a 529(c)(2)(B) election on a gift tax return is coming up. Is there something I need to do to make it go away, or is it there just to remind me to add the explanation for the election? Will it affect my e-filing? Thanks
Solution: This diagnostic is informing of the explanation requirement to be included with the return, as well as the tracking of the contribution in the successive years. The Lacerte program will not track this, therefore it is up to the preparer to report the 20% for the next 4 years. One way to do this is by using the Notes screen 13. Enter the applicable information here for tracking of the contribution to remind the preparer the 20% is required to be reported. This screen will transfer from year to year.
