Part 1 Estate and Gift Tax question: agree to split gifts

Part 1Estate and Gift Tax

Matt and his wife, both U.S. citizens, agree to split gifts for 2025. Matt gives his niece $38,000 from his own account. What is the gift tax result?

A The gift is excluded under the marital deduction
B Each spouse has a $19,000 gift, and Form 709 is required
C No Form 709 is needed, as the split puts each half under $19,000
D Matt alone has a $19,000 taxable gift

Show the answer and explanation

Answer: B. Each spouse has a $19,000 gift, and Form 709 is required

Spouses who consent to split gifts are treated as each making half of every gift either makes to third parties during the year. Each is treated as giving $19,000, within each one's annual exclusion, so no taxable gift results. But gift splitting must be elected on Form 709 with the other spouse's consent, so a return is required. Source: IRC 2513; Form 709 instructions (2025), Gift Splitting. Tax year: 2025 (law as of 31 Dec 2025).

Common mistake

Assuming split gifts need no return.

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Original study material mapped to the public IRS SEE content outlines; not a real exam question.Not affiliated with or endorsed by the IRS or PSI. Verify figures and rules against current guidance before relying on them.