There are two exceptions. If either exception is met, only one spouse needs to file a gift tax return. The first exception applies if only one spouse made any gifts (all of which were present interests) during a calendar year and the total value of the gifts to each third party is no more than $28,000. The second exception applies if one spouse made gifts in amounts of $14,000-$28,000 to any third party and the other spouse made gifts of no more than $14,000 to any other third party during a calendar year. The gifts completed by either spouse must be of present interests, meaning that the recipient of the gift receives the present use and enjoyment of the gift as opposed to a gift that may vest in the future.
It is important to keep in mind that an individual who makes gifts of less than $14,000 per year per person does not need to file a gift tax return but a married couple who wishes to split gifts must each file a gift tax return even if the split amount is less than $14,000 per spouse.
Michael Salad is an attorney in Cooper Levenson’s Business & Tax and Cyber Risk Management practice groups. He concentrates his practice on estate planning, business transactions, mergers and acquisitions, tax matters and cyber risk management. Michael holds an LL.M. in Estate Planning and Elder Law. Michael is licensed to practice law in New Jersey, Florida and the District of Columbia. Michael may be reached at 609.572.7616 or via e-mail at firstname.lastname@example.org.