706 gst

[schirallicpa]

I have done the 706 a few times when people have nice clean simple gifts to daughters or sons.  However, this year I have a client that decided to gift his grandchildren (2) $50000 each.  So he has to pay $20000 tax on this??  That just seems crazy.  I just have to confirm this with someone.  Maybe I;m missing something big.  

What is 2632(b) election.

I'm in deeper water than I anticipated.  

[Margaret CPA in OH]

Use Form 709, Gift Tax Return.  The exclusion is $5mil, tax credit $2mil+  The potential tax is applied against the lifetime credit. 

Since this is a generation skip, look at the election https://www.law.cornell.edu/uscode/text/26/2632

I think  with a little reading and the correct form, you will figure it out.  With such generosity, take into account any earlier filed 709's.

[SaraEA]

Unless your client is on track to gift and have enough left over at death to total $5.9m, you don't have to worry about the election.  Do be sure to enter the gifts to the grandchildren on the GST section of the 709.

[schirallicpa]

709 I meant!

Thank you for the link Margaret.  

Just starting a return from an Ohio resident who has moved to NY.  Perhaps I will be bugging you again soon!