$40k Gift Tax Return showing $0 tax owed

Forum|Forum|5 years ago
May 13, 2021
2 replies
29 views

75 year old Father, filing status single, gifts $40,000 to daughter to help with business acquisition she is purchasing. I've concluded gift tax return is necessary. When I create 709, it shows no tax owed. Under Part 2 Tax Computation:

Line 3 Total taxable gifts = $25,000

Line 4 computed tax = $4,900

Line 7 Applicable credit amount = $4,577,800

Line 12 Applicable credit = $4,900

Line 18 balance due = $0

What am I doing wrong?

ProSeries Professional

This topic has been closed for replies.

Best answer by sjrcpa

Why would gift tax be owed if client has not used their lifetime exemption of $11+ million?

sjrcpaAnswer

Level 15

Why would gift tax be owed if client has not used their lifetime exemption of $11+ million?

The more I know the more I don’t know.

T

Terry53029

Intuit Community Champion

Nothing ! As of 2020 the lifetime exclusion is $11580

E

ea_rva aka acctgtaxmattersAuthor

Level 5

Gotcha! First time doing one. So why is the $4,577,800 "applicable credit" not showing as $11,580,000?

T

TaxGuyBill

Level 15

The "credit" is that amount. That is the exclusion limit ($11+million) multiplied by the Gift Tax Rate (40%?).

Sign up

Login with SSO

Let's get you signed in

Login with SSO