Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
2020 form 709
Old 12-11-2020, 07:32 PM   #1
Thinks s/he gets paid by the post
Souschef's Avatar
 
Join Date: Dec 2015
Location: Santa Paula
Posts: 3,218
2020 form 709

The IRS had just released the 2020 form 709 for gifts. The instructions are still in draft form. The gift I made was well below the limit, and there was a part of me that would think, "how will they find out?".
I would rather file the form than worry
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
Souschef is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-11-2020, 09:13 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 10,577
Well below the $15,000 limit? Why would you bother?
RunningBum is offline   Reply With Quote
Old 12-11-2020, 09:32 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 28,410
Yeah, below $15,000 no reporting needed.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 12-11-2020, 10:13 PM   #4
Thinks s/he gets paid by the post
Souschef's Avatar
 
Join Date: Dec 2015
Location: Santa Paula
Posts: 3,218
Quote:
Originally Posted by RunningBum View Post
Well below the $15,000 limit? Why would you bother?
it was well over $100,000, but well below the 11 Mil limit.
Sorry I was not clearer on which limit.
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
Souschef is offline   Reply With Quote
Old 12-12-2020, 02:18 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 28,410
Quote:
Originally Posted by Souschef View Post
The IRS had just released the 2020 form 709 for gifts. The instructions are still in draft form. The gift I made was well below the limit, and there was a part of me that would think, "how will they find out?".
I would rather file the form than worry
Quote:
Originally Posted by Souschef View Post
it was well over $100,000, but well below the 11 Mil limit.
Sorry I was not clearer on which limit.
OK, I see what you mean now. We are also filing 2020 forms 709 - one for each of us as we are treating the gifts as coming from both. That $11M+ estate exemption applies to individuals.

No, there is no easy way for them to find out. Yet it hadn’t occurred to us not to file. I expect some don’t, just like other obscure tax declarations.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 12-12-2020, 08:03 AM   #6
Thinks s/he gets paid by the post
The Cosmic Avenger's Avatar
 
Join Date: May 2016
Location: Mid-Atlantic
Posts: 1,716
Quote:
Originally Posted by audreyh1 View Post
OK, I see what you mean now. We are also filing 2020 forms 709 - one for each of us as we are treating the gifts as coming from both. That $11M+ estate exemption applies to individuals.

No, there is no easy way for them to find out. Yet it hadnít occurred to us not to file. I expect some donít, just like other obscure tax declarations.
Remember, any transfer over $10K has to be reported by the bank to the IRS as potential money laundering, and even lower but frequent transfers can be flagged, so you can't just do $9K every day (or, probably, every month, even) to get around the reporting requirements. So while I don't think the IRS is necessarily looking for it, I would expect that if they did at some point, they could easily find most gift transfers/checks. Although now I guess the important question is, how long do they keep that information?
__________________
-Looking to FIRE in the mid-2020s, which would be our mid-50s.
The Cosmic Avenger is offline   Reply With Quote
Old 12-12-2020, 08:17 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 5,521
Same boat here (>15k) but I'm filing... Would they find out if I didn't? Probably not. Would it really make a difference in the long term? Probably not since I'm never going to hit the upper lifetime limits... But I try to follow the rules when I can, at least I have so far!


I need to look at the new form/instructions since the old one sure looked intimidating to me... Looks like it was designed for rich people and their accountants and not us lowly DIY millionaires.
__________________
A goal without a plan is really just a wish
Car-Guy is offline   Reply With Quote
Old 12-12-2020, 08:17 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,269
Quote:
Originally Posted by audreyh1 View Post
OK, I see what you mean now. We are also filing 2020 forms 709 - one for each of us as we are treating the gifts as coming from both. That $11M+ estate exemption applies to individuals.

No, there is no easy way for them to find out. Yet it hadnít occurred to us not to file. I expect some donít, just like other obscure tax declarations.
If one half of the gifts comes from each of you, then you can file a joint form 709 instead of filing two forms. You just check the box to indicate the 50/50 split, enter both spouse's SSNs and both sign.
cathy63 is offline   Reply With Quote
Old 12-12-2020, 08:21 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 28,410
Quote:
Originally Posted by The Cosmic Avenger View Post
Remember, any transfer over $10K has to be reported by the bank to the IRS as potential money laundering, and even lower but frequent transfers can be flagged, so you can't just do $9K every day (or, probably, every month, even) to get around the reporting requirements. So while I don't think the IRS is necessarily looking for it, I would expect that if they did at some point, they could easily find most gift transfers/checks. Although now I guess the important question is, how long do they keep that information?
Well they can certainly find transfers. How do they determine gifts?
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 12-12-2020, 08:23 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 28,410
Quote:
Originally Posted by cathy63 View Post
If one half of the gifts comes from each of you, then you can file a joint form 709 instead of filing two forms. You just check the box to indicate the 50/50 split, enter both spouse's SSNs and both sign.
I read the IRS stuff and it said that each of us had to file a 709, because each of us has an estate exemption limit that we are gifting against.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 12-12-2020, 08:36 AM   #11
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,269
Quote:
Originally Posted by audreyh1 View Post
I read the IRS stuff and it said that each of us had to file a 709, because each of us has an estate exemption limit that we are gifting against.
You're right. I just read the instructions, and I see that when we did this years ago, we actually met the exception criteria so we only had to file one return. If you don't qualify, then you do have to file separate returns.
cathy63 is offline   Reply With Quote
Old 12-12-2020, 08:39 AM   #12
Thinks s/he gets paid by the post
The Cosmic Avenger's Avatar
 
Join Date: May 2016
Location: Mid-Atlantic
Posts: 1,716
Quote:
Originally Posted by audreyh1 View Post
Well they can certainly find transfers. How do they determine gifts?
I'm just saying, if there is a reason for them to look back, they might be able to find the total, and then it might be on us to prove that we were, say, paying our adult child(ren) for something rather than gifting money. If it wasn't declared as income, there's no rental agreement between payer and payee, and there's no promissory note, it would be hard to argue that it's not a gift....I can't imagine any other reasons for transfers that aren't gifts off the top of my head.
__________________
-Looking to FIRE in the mid-2020s, which would be our mid-50s.
The Cosmic Avenger is offline   Reply With Quote
Old 12-12-2020, 09:12 AM   #13
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 10,577
Quote:
Originally Posted by The Cosmic Avenger View Post
Remember, any transfer over $10K has to be reported by the bank to the IRS as potential money laundering, and even lower but frequent transfers can be flagged, so you can't just do $9K every day (or, probably, every month, even) to get around the reporting requirements. So while I don't think the IRS is necessarily looking for it, I would expect that if they did at some point, they could easily find most gift transfers/checks. Although now I guess the important question is, how long do they keep that information?
I thought that was cash? In any case I would definitely report anything over $10K. When I think of things that could derail retirement but are easily avoided, tax fraud is up there. Not worth it.
RunningBum is offline   Reply With Quote
Old 12-12-2020, 08:22 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 28,410
Quote:
Originally Posted by RunningBum View Post
I thought that was cash? In any case I would definitely report anything over $10K. When I think of things that could derail retirement but are easily avoided, tax fraud is up there. Not worth it.
Yes, I think thatís cash deposits. There is also a reporting requirement for international transfers (received?) over $10K.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 12-12-2020, 09:59 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,312
Quote:
Originally Posted by audreyh1 View Post
OK, I see what you mean now. We are also filing 2020 forms 709 - one for each of us as we are treating the gifts as coming from both. That $11M+ estate exemption applies to individuals.

No, there is no easy way for them to find out. Yet it hadnít occurred to us not to file. I expect some donít, just like other obscure tax declarations.
It should be noted that this is mostly a problem for your executor, as the reconcilliation will not come due till the time a form 706 is due (the estate tax form) (Unless you exceed 11 million in gifts before then but then a good tax professional is likely involved)
meierlde is offline   Reply With Quote
Old 12-13-2020, 09:32 AM   #16
Recycles dryer sheets
 
Join Date: Jun 2010
Location: Southwest Florida
Posts: 434
Quote:
Originally Posted by The Cosmic Avenger View Post
Remember, any transfer over $10K has to be reported by the bank to the IRS as potential money laundering, and even lower but frequent transfers can be flagged, so you can't just do $9K every day (or, probably, every month, even) to get around the reporting requirements. So while I don't think the IRS is necessarily looking for it, I would expect that if they did at some point, they could easily find most gift transfers/checks. Although now I guess the important question is, how long do they keep that information?
The banks report cash transfers, not checks.
Gill
Gill is offline   Reply With Quote
Old 01-15-2021, 07:42 PM   #17
Thinks s/he gets paid by the post
Souschef's Avatar
 
Join Date: Dec 2015
Location: Santa Paula
Posts: 3,218
I just filled out the 709, but will not mail it in until March. It is for a substantial sum (6 figures). I am slightly paranoid about the IRS, having had to respond to 2 previous letters from them.
Are they going to come at me to ask where I got the money from (I have the documentation), or am I just worrying too much?
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
Souschef is offline   Reply With Quote
Old 01-16-2021, 09:56 AM   #18
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,269
Quote:
Originally Posted by Souschef View Post
I just filled out the 709, but will not mail it in until March. It is for a substantial sum (6 figures). I am slightly paranoid about the IRS, having had to respond to 2 previous letters from them.
Are they going to come at me to ask where I got the money from (I have the documentation), or am I just worrying too much?
No, nobody cares where you got the money. A gift tax return is auditable, but that would only be of interest if they thought you were actually giving gifts in the 7-figure range and under-reporting them.
cathy63 is offline   Reply With Quote
Old 01-16-2021, 10:10 AM   #19
Thinks s/he gets paid by the post
street's Avatar
 
Join Date: Nov 2016
Posts: 4,019
We have to do the 709 for 2020 also. I hope all goes well and no issues with IRS. It seems at times through the years even if done right/legal it still can be interesting dealing with Gov. agencies. That isn't meant to be a negative response but I'm looking at both sides of the coin.
street is offline   Reply With Quote
Old 01-16-2021, 10:57 AM   #20
Recycles dryer sheets
 
Join Date: Jul 2009
Posts: 68
I talked to an accountant about the ins and outs of the reporting and I asked him what happens if they lower the lifetime exemption from what is is now back to say $1mil lifetime. He said they wouldn't do that.... but they could.
Bogie is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
There's a new W4 Form for 2020 (We are STILL SO Stupid) clobber FIRE and Money 26 12-15-2019 09:27 AM
Taxes: Form by form instead of interview? TromboneAl FIRE and Money 4 03-28-2016 12:03 PM
Form a Yahoo! Group to share Excel/other files? MooreBonds Other topics 1 12-19-2004 09:36 AM
Please Help Me Form a Portfolio for ER BunsGettingFirm FIRE and Money 26 03-08-2004 07:28 AM
Potential Form Bug moguls FIRE and Money 1 11-25-2002 11:36 PM

» Quick Links

 
All times are GMT -6. The time now is 04:47 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2021, vBulletin Solutions, Inc.