Specialized Returns for Individuals · Gift tax

Gift-splitting

Gift-splitting is a small election with a long tail. It lets a couple use two annual exclusions against a gift that only one of them made, which is why it exists and why it is usually right. What clients are not told is what comes with it: consent covers every gift either spouse made to anyone that year, it must be given by a date that arrives before most people think about it, and after that date it cannot be withdrawn. It also makes each spouse liable for the other’s entire gift tax for the year.

The rule

What it does. a gift by one spouse to anyone other than the other spouse is treated as made one-half by each, but only where both spouses were citizens or residents at the time of the gift (IRC § 2513(a)(1))^TY2026Verified 2026-08-20IRC § 2513(a), read at law.cornell.edu/uscode/text/26/2513

Who may do it. the spouses must be married at the time of the gift, and the donor's spouse must not remarry during the remainder of the calendar year (IRC § 2513(a)(1))^TY2026Verified 2026-08-20IRC § 2513(a)(1), read at law.cornell.edu/uscode/text/26/2513 And both must be citizens or residents when the gift is made — a couple where one spouse is a non-resident alien cannot split, however the return is filed.

One gift it will not reach. splitting is unavailable for a gift of an interest in property in which the donor creates a general power of appointment, within IRC § 2514(c), in the consenting spouse (IRC § 2513(a)(1))^TY2026Verified 2026-08-20IRC § 2513(a)(1), read at law.cornell.edu/uscode/text/26/2513

It is all or nothing. consent applies to all gifts made by either spouse to third parties during the calendar year — it cannot be given for one gift and withheld for another (IRC § 2513(a)(2))^TY2026Verified 2026-08-20IRC § 2513(a)(2), read at law.cornell.edu/uscode/text/26/2513 A couple cannot split the gifts that benefit from it and keep the others separate.

When consent must be given. consent may be signified any time after the close of the calendar year but not after 15 April following it — unless neither spouse has filed for that year by then, in which case not after either spouse files — and never after a notice of deficiency for that year has been sent to either spouse (IRC § 2513(b)(2))^TY2026Verified 2026-08-20IRC § 2513(b)(2), read at law.cornell.edu/uscode/text/26/2513

And when it can be taken back. a consent signified on or before 15 April may be revoked up to that date and no later; a consent signified after 15 April may not be revoked at all (IRC § 2513(c))^TY2026Verified 2026-08-20IRC § 2513(c), read at law.cornell.edu/uscode/text/26/2513 The asymmetry is deliberate: an early consent is provisional until 15 April, a late one is final on arrival.

What it costs. consenting makes each spouse jointly and severally liable for the entire gift tax of both for that calendar year (IRC § 2513(d))^TY2026Verified 2026-08-20IRC § 2513(d), read at law.cornell.edu/uscode/text/26/2513

A return is still required. a return is required of any individual making a transfer by gift other than one excluded by IRC § 2503(b) or (e), one deductible under § 2523, or a qualifying entire-interest charitable transfer under § 2522 — so a split gift that exceeds one annual exclusion but not two still requires a return from the donor (IRC § 6019)^TY2026Verified 2026-08-20IRC § 6019, read at law.cornell.edu/uscode/text/26/6019 Splitting changes the tax, not the filing obligation — and the consent itself has to be signified on a return, so the return is how the election is made.

Current figures

How it works in practice

Establish first whether splitting is needed at all. Where each spouse has their own funds, the simpler course is for each to make their own gift of up to the annual exclusion. Splitting exists for the case where the money is in one spouse’s name — a gift from a single account, or of property titled to one of them.

Then check the year, not the gift. Consent reaches every gift either spouse made to a third party during the calendar year. A couple who split a large gift in March have also split whatever either of them gave anyone in November, which may not be what either intended.

Watch the deadline, because it is earlier than the return. The gift tax return is due on the ordinary April date, but the consent cannot be signified after 15 April unless neither spouse has filed. An extension buys time to file; whether it preserves the ability to consent turns on the § 2513(b)(2) sequence, and the safe course is to decide before April.

Explain the joint liability. Section 2513(d) makes each spouse liable for the whole of both spouses’ gift tax for the year. Where one spouse has made gifts the other has not seen, or where a marriage is under strain, that is a real exposure and it lasts as long as the assessment period does.

Do not let it obscure what gifts actually do. Splitting halves each spouse’s taxable gift. It does not make the gift disappear from the estate computation: taxable gifts above the annual exclusion are added back to the base at death under § 2001(b)(1)(B). a tentative tax on the sum of the taxable estate and adjusted taxable gifts, reduced by the gift tax that would have been payable on post-1976 gifts under current rates — so lifetime gifts enlarge the base rather than reducing the exclusion arithmetic (IRC § 2001(b))^TY2026Verified 2026-08-20IRC § 2001(b), read at law.cornell.edu/uscode/text/26/2001

And file even when the tax is nil. The return requirement in § 6019 keys off the gift exceeding the annual exclusion before splitting, in the hands of the spouse who actually made it.

How this has changed

Section 2513 has been in its present form since 1981, when the requirement that the spouses be married throughout the year was relaxed to the current rule about remarriage. Nothing in Pub. L. 119-21 amended it, § 2503(b) or § 6019.

The figures around it have moved. The annual exclusion is indexed and now stands at $19,000 per donee for calendar year 2026, for gifts other than gifts of future interests (IRC § 2503(b))^TY2026Verified 2026-08-19Rev. Proc. 2025-32 §§ 2.14, 4.42, read at irs.gov/pub/irs-drop/rp-25-32.pdf, so a split gift shelters twice that amount before any taxable gift arises. What the section prints is $10,000 — the figure IRC § 2503(b)(1) still prints on its face, which has not been the operative annual exclusion since 1998; § 2503(b)(2) does the indexing and the section itself never states the current amount^TY2026Verified 2026-08-20IRC § 2503(b), read at law.cornell.edu/uscode/text/26/2503 — another instance of a provision whose face value has not been the operative figure for decades.

What has changed most is the reason couples split. When the lifetime exclusion was small, splitting mattered because taxable gifts consumed a scarce resource. At $15,000,000 for a decedent dying in calendar year 2026 — the IRC § 2010(c)(3)(A) basic exclusion amount as raised by Pub. L. 119-21 § 70106, indexed from calendar year 2026 and rounded to the nearest $10,000 under § 2010(c)(3)(B)^TY2026Verified 2026-08-19IRC § 2010(c)(3) read at law.cornell.edu/uscode/text/26/2010 and Rev. Proc. 2025-32 § 2.14 read at irs.gov/pub/irs-drop/rp-25-32.pdf the lifetime figure is not scarce for most families, and splitting is now mostly about staying under the annual exclusion so that no return and no reporting arises at all. That makes the joint liability in § 2513(d) a worse bargain than it used to be — the benefit purchased is administrative convenience, and the price is unchanged.

Exam focus

Expect a computation in which one spouse makes a gift and the question asks for the taxable gift with and without splitting. Halve the gift, then apply one annual exclusion to each half — not one exclusion to the whole.

Know the four conditions: married at the time of the gift, no remarriage during the year, both citizens or residents, and consent by both. Know that consent covers all gifts of the year, and know the two dates in § 2513(b)(2) and (c) — 15 April for signifying and the same date for revoking an early consent, with a late consent irrevocable.

Expect at least one question testing that a return is still required, and one on the joint and several liability in § 2513(d), which candidates consistently do not expect.

Check yourself

1. A wife gives her nephew $30,000 from her own funds. Her husband consents to split. What is each spouse’s taxable gift for 2026?

Answer: Nil for each. Under IRC § 2513(a)(1) the gift is treated as made half by each, so each has made a $15,000 gift, and each is within a single annual exclusion of $19,000 per donee for calendar year 2026, for gifts other than gifts of future interests (IRC § 2503(b))^TY2026Verified 2026-08-19Rev. Proc. 2025-32 §§ 2.14, 4.42, read at irs.gov/pub/irs-drop/rp-25-32.pdf.

2. In the same year the husband separately gave his brother $40,000. May the couple split only the wife’s gift?

Answer: No. IRC § 2513(a)(2) applies the consent to all gifts made by either spouse to third parties during the calendar year. Splitting one gift splits them all.

3. A couple signified consent on 10 March. On 1 May they wish to revoke it. May they?

Answer: No. IRC § 2513(c)(1) provides that the right to revoke does not exist after 15 April where the consent was signified on or before that date.

4. A husband makes a gift to a trust in which he gives his wife a general power of appointment over the interest transferred. May that gift be split?

Answer: No. IRC § 2513(a)(1) expressly excludes a gift of an interest in property in which the donor creates a general power of appointment, as defined in § 2514(c), in the consenting spouse.

5. After consenting to split, one spouse is assessed a gift tax deficiency. Who is liable?

Answer: Both, jointly and severally, for the entire gift tax of both spouses for that calendar year (IRC § 2513(d)).