Gift Tax Return Superfunding 529 Plan

Forum|Forum|4 years ago
March 17, 2022
1 reply
16 views

Is it necessary to file Form 709 each year for the next 5 years when electing Section 529(c)(2)(B) for a gift of $80,000 in 2021 to a grandchild for superfunding a 529 plan?

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Best answer by sjrcpa

If the "carryover" is the only gift in the next 4 years, no gift tax return required in those years.

If there are other gifts then include this on the subsequent years gift tax returns.

T

TaxGuyBill

Level 15

$80,000 for 2021?

The limit is $15,000 for 2021. As such, if that election was made, the $80,000 is spread out "ratably" over the 5 years, so you would have $16,000 per year.

So there definitely would need to be a Gift Tax returns for 2021.

As for the other years, I don't think so (the limit increases to $16,000 for 2022), but I'm not particularly fluent on Gift Tax so perhaps somebody has a more definitive answer. On the other hand, if the giver gave anything else to the recipient in future years (birthday present, etc.), that would go over the limit and a Gift Tax return would be required.

Will the giver ever potentially be subject to Gift or Estate tax? If not, adding it all onto 2021 would be easiest.

sjrcpaAnswer

Level 15

If the "carryover" is the only gift in the next 4 years, no gift tax return required in those years.

If there are other gifts then include this on the subsequent years gift tax returns.

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

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