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Because John was so happy that Dana had agreed to become his fiancee, on february 2,...

Because John was so happy that Dana had agreed to become his fiancee, on february 2, 2018, he gave Dana's mother , Ethel, $15,000 in cash. Does this gift qualify for gift-splitting ? Does this gift qualify for gift-splitting if John and Dana marry by December 31, 2018?

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Answer #1

DEFINITION of 'Gift Splitting'

A taxation rule that allows a married couple to split a gift's total value as if each contributed half of the amount. Gift splitting allows a couple to increase their total gift tax exemption amount by combining individual allowances.

For gift splitting to be official, both spouses must agree to the gift and specify the situation when filing taxes. In 2011, the gift tax exemption was set at $13,000 per individual gift annually. Gift splitting allows a couple to donate a total of $26,000 before being taxed on the contribution.
No, the gift of $15000 does not qualify for gift splitting as they are not yet married.

Yes, if John and Dana marry by December 31, 2018 ,the gift will qualify for gift splitting. The gift will be split among them as $7500 and $7500 and will be exempted from being taxed.

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