I make a tax-free gift to my spouse?
If a couple decides to sell a piece of real estate,
can one spouse use the money to make a tax-free gift to the other?
If so, how much of that gift is tax-free? -- Amy
In marriage, what's yours is his and vice versa and the IRS agrees.
There is no limit on the gifts that a married couple can make to
each other, provided both are U.S. citizens.
A few years ago, Congress became concerned that a noncitizen spouse
may return to his country after a U.S.-domiciled spouse dies and
take all of the accumulated wealth out of the reach of U.S. estate
tax. Accordingly, a limit was placed on the amount that a U.S. citizen
or domiciled resident can gift to a noncitizen spouse. Although
the estate tax is slowly being repealed, this limit has not been
The normal annual gift limit of $11,000 still applies to gifts
to persons other than your spouse. The $11,000 limit for outright
gifts is increased to $114,000 annually for gifts to a noncitizen
spouse from a U.S.-domiciled spouse. An outright gift is generally
a gift that becomes the property of the recipient immediately, rather
than in the future. Gifts greater than this annual limit should
be reported on Form
709. The annual excess gifts would be applied to the U.S.-domiciled
spouse's lifetime gift exclusion of $1,000,000. Form 709 is due
by the due date of your annual Form 1040 for the year of the gift.