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  1. @Frieda,

    My pleasure. It is always good to build simple explanations like “This is what goes on Line 7” for weird tax situations. It is one thing to be all hand-wavey and explain stuff. But even after you understand the concepts, you face the hard task of translating tax metaphysics into answers on a tax form. That’s where the fun is. For certain definitions of “fun”. 🙂


  2. Wow, this is awfully kind of you. After studying the instructions yet again for the 102nd time, I think I have it figured out… perhaps, sort of…

    I think I am inclined to put the entire $145,000 deduction available as gifts to nonresident spouses on Line 2 as the annual exclusions. Line 4 to 6 seem to refer specifically to the unlimited marital deductions between US Citizen spouses and Line 5 to the amount of the gift which would otherwise not be permissible. I feel like I am talking in circles but Line 2 is about the only place I could think of which might make sense. I am probably heading in a completely wrong direction….

    Looking forward to seeing light at the end of the tunnel!

  3. I’m going to answer this a blog post.

    Let’s hope I can de-confusify you! 🙂


  4. We have a gift tax related question and really getting to the nitty-grittys. In 2014, I (US citizen) gifted cash of $300,000 to my nonresident alien spouse. Where on Form 709, Part 4, Page 3, do I claim my marital deduction? I realize that my annual exclusion is $145,000 with $14,000 going to Line 2. But the remaining $131,000? I wanted to put something on Line 4, Part 4, but the instructions caution not to put anything there for gifts to noncitizen spouses. Does the $131,000 go to Line 5? Or does the exclusions mean something else? On Line 6? On line 5 and 6?
    Any light you can shed would be so awesome!

    Utterly confused.

  5. I won’t be able to look at this for a couple of weeks due to other commitments. I’ll carry around a copy of the PLR for kicks, just in case I get bored. 🙂 Thanks for the clue on how to approach it.

  6. Michael, I don’t know why the IRS decided the way they did. I like it however. I am going to spend some quality time with the PLR, burn some incense, and chant to the Almighty Tax Gods to see if perhaps I get some Divine Insight. 🙂

  7. Interesting ruling. Thanks for posting.

    At first blush, since the property was held in trust, and did not come directly from the decedent, it’s difficult to see how 1014(b)(1) applies. It’s also interesting that there’s a citation to 1014(b)(9), since that provision clearly does not apply. Phil — can you elaborate on why it is the IRS found 1014(b)(1) on point?

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Tax laws change over time, and the information in this post above may be less accurate today than it was at the time of the last revision. This post is not tax advice for your specific situation. Please contact an international tax professional to get personalized advice for your situation.