In short
Gift splitting lets a married couple treat a gift made by one spouse to a third party as made half by each spouse, so they can use both annual exclusions and both lifetime exemptions.
Key takeaways
- Both spouses must consent, and the election applies to all gifts either spouse makes during the year.
- A gift tax return (Form 709) is required even if no tax is due.
- Gifts between spouses use the unlimited marital deduction instead.
Where it's tested
TCP: Estate & Gift Tax Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A married couple want to make larger tax-free gifts to their daughter. One spouse owns all the assets. What lets them use both spouses' annual exclusions on gifts made from that spouse's assets?