IRS Form 4808


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What Is IRS Form 4808?

IRS Form 4808, formally titled "Computation of Credit for Gift Tax," is a tax document used by individuals to calculate the credit for gift tax on prior-year gifts. This form is particularly useful for individuals who have made sizeable gifts throughout their lifetime that surpass the annual exclusion amount. It accounts for the gift tax paid in previous years, allowing for a credit to reduce the amount of gift tax that might be due on current transfers.

When to use form 4808

Form 4808 is utilized when an individual needs to calculate the credit on gift tax for prior-year gifts that exceeded annual exclusion limits. Specifically, this form is pertinent for taxpayers who have made substantial lifetime gifts and potentially owe gift tax.

It's typically used when filing a current year's gift tax return, allowing individuals to factor in tax credits from gifts given in previous years - credits that can lower the current gift tax liability. If you have previously filed Form 709, Gift Tax Return, for past gifts, and are looking to leverage those contributions to reduce your present gift tax burden, Form 4808 is essential for that computation.

How to Fill Out the IRS Form 4808

Filling out this IRS form template involves a precise understanding of the tax situation at hand and can be quite detail-oriented and may require a solid understanding of past financial gifts. Here are some form 4808 instructions to help you:

  1. Write the schedule number at the top of the form to identify the relevant gift tax return.
  2. Under "Estate of," enter the name of the decedent whose estate is involved.
  3. Enter the date of death for the decedent next to the "Date of death" label.
  4. Identify the gift recipient in the "Name of donee" section.
  5. Calculate the gift tax amount on the given gift and enter it in the first field of the First Limitation.
  6. Deduct the annual exclusion that applies to the gift entered above and record the result.
  7. If applicable, subtract the marital deduction related to the gift.
  8. Similarly, subtract any applicable charitable deduction amount.
  9. Add up the amounts from the annual exclusion, marital deduction, and charitable deduction, then record the total.
  10. Determine the net value of the gift by subtracting the total deductions from the original gift tax amount.
  11. Gather the taxable gifts amount from Schedule A of Form 709 and indicate it.
  12. List the specific exemption allowed from the corresponding schedule of Form 709.
  13. Sum the values of taxable gifts and the specific exemption, then note the total.
  14. State the total gift tax paid as indicated on Forms 709.
  15. To determine the first limitation, divide the net amount of gift by the sum of taxable gifts and exclusions, and multiply the result by the total gift tax paid.
  16. Add up the amounts from column A and B to derive the combined first limitation.
  17. Input the estate tax value of the gift in the section under Second Limitation.
  18. Depending on the relation of the original gift tax amount to the estate tax value, either subtract the annual exclusion from the gift tax amount or adjust based on the estate tax value to annual exclusion ratio.
  19. Specify the estate tax marital deduction.
  20. Indicate the value of qualifying property passing to the spouse.
  21. Calculate the attributable marital deduction by dividing the estate tax marital deduction by the value of the property passed to the spouse, and multiply by the previously determined gift value.
  22. Determine the estate tax charitable deduction attributable to the value of the gift, adjusting for exclusions as required.
  23. Record the sum of the attributable marital deduction and the estate tax charitable deduction.
  24. Subtract the combined deductions from the value of the gift to determine the net value.
  25. Report the gross estate value.
  26. Enter the marital deduction applicable to the estate.
  27. State the charitable deduction related to the estate.
  28. Add the marital and charitable deductions for the estate, then subtract this total from the gross estate to find the adjusted value.
  29. Record the adjusted taxable gifts amount from Form 706.
  30. Combine the adjusted taxable estate value and the adjusted taxable gifts, noting the total.
  31. Calculate the tentative tax, subtracting any aggregate gift taxes payable and applicable credit amounts as detailed in the updated Form 706 instructions.
  32. To find the second limitation, divide the value of the gift left after deductions by the sum of the adjusted estate and gifts, then multiply by the tentative tax amount.
  33. Compare the combined first limitation and the second limitation, and enter the smaller of the two as the limitation of credit.

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Fillable online IRS Form 4808
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