Form 709 Gift Splitting for Married Couples

How it works

Gift splitting is an election, not an automatic consequence of being married. Without it, a gift funded from one spouse’s own property is a gift by that spouse alone, and only that spouse’s annual exclusion and lifetime exemption absorb it. With it, the couple reaches twice the annual exclusion against a gift only one of them actually made.

The consent is all or nothing for the year. The instructions state that it is effective for the entire calendar year, so all gifts made by either spouse to third parties during the calendar year while they were married must be split. There is no way to elect it for the straightforward gift and leave a more awkward one outside the election.

Eligibility is tested on the face of the form. Part III asks whether you consent to have the gifts made by you and by your spouse to third parties during the calendar year considered as made one-half by each of you, then asks for the consenting spouse’s name and Social Security number and whether you were married to one another for the entire calendar year. Where the marriage covered only part of the year, you identify whether the change was a marriage, a divorce, or a death and give the date. A spouse who was divorced or widowed after making the gift cannot elect to split if they remarried before the end of the year.

The consent itself is a separate signed document. The instructions require a Notice of Consent signed and dated by the consenting spouse, containing a statement that they elect to treat all gifts made to third parties as having been made one-half by each spouse. Where only one spouse is required to file, one Notice of Consent is attached to the donor spouse’s return; where both must file, each executes one.

Two exceptions in the instructions allow a single return. The first applies where only one spouse made any gifts, the total value to each third-party donee did not exceed $38,000, and all of the gifts were of present interests. The second covers a donor spouse who gave more than $19,000 but not more than $38,000 to any one donee while the consenting spouse’s only gifts were of not more than $19,000 to different donees, again with all gifts of present interests. Outside those two cases both spouses file their own returns, and the instructions direct you to mail them in the same envelope.

Splitting also changes what goes on Schedule A. With gift splitting elected, you enter the entire value of every gift you made during the calendar year while you were married, even where the value will fall below $19,000 once it is halved in the split-gift column. Gifts the spouse made are listed separately in the space provided for them.

There is a real cost attached. Where the consent is effective, the instructions state that liability for the entire gift tax of each spouse is joint and several — the consenting spouse takes on exposure to tax on gifts they did not make and may not have chosen.

The election has a deadline. Consent may not be signified after April 15 following the end of the year in which the gift was made, unless neither spouse has filed a gift tax return for that year by then — in which case the consent must be made on the first gift tax return for the year filed by either of them. It also cannot be obtained after a notice of deficiency for that year’s gift tax has been sent to either spouse. An executor for a deceased spouse or a guardian for a legally incompetent spouse may indicate the consent.