7.2 Federal Gift Tax

1. Form 709: Gift Tax Return

Gross Gifts
 - Deductions
= Taxable Gift for the Current Year
 + Taxable Gift for the Prior Year
= Total Taxable Gift
 x Uniform Tax Rates
= Tax on Total Taxable Gift
 - Taxes Previously Paid
 - Unified Tax Credit
= Net Gift Tax Due

2. Gross Gifts

1) FMV at date of the gift
2) Joint ownership (extent the contribution exceeds the retained interest)
3) Joint bank account (when the noncontributing tenant withdraws funds)

3. Exclusion and Deduction

1) Annual exclusion
The first $15,000 per donee per year (2019, 2020)

2) Gift Splitting
One half of a gift is considered to be given by each spouse if spouse elect gift splitting.

3) Tuition and medical expenses paid on behalf of the donee (paid directly)

4) Charitable gift

5) Marital deduction

4. Complete vs. Incomplete Gifts

1) Complete vs. Incomplete Gifts
(2) Incomplete gift
a) Conditional gift
b) Revocable gift

2) Present interest vs. Future interest gift
(1) Present interest gift: qualified for the annual exclusion
(2) Future interest gift: NOT qualified