My wife inherited a house from her mother and plans to divide the proceeds of its sale to her sisters. (there is no probate or estate) Each sister will receive about $75,000. Using IRS form 709 to report the gift, is it correct that the $5.45 million lifetime gift/estate exemption erases any tax payment liability for the current year?

My wife inherited a house from her mother and plans to divide the proceeds of its sale to her sisters. (there is no probate or estate) Each sister will receive about $75,000. Using IRS form 709 to report the gift,=====>Yes since your spouse , as a donor, must file form 709 with the IRS; Technically, whenever a person gives a gift to another person, such as a birthday gift, the rules of gift taxes must be followed. If the person giving the gift is a U.S. citizen, he or she must file Form 709 if the gifts given total $14k($28K I guess for gift splitting; Gift splitting allows a couple to increase their total gift tax exemption amount by combining individual allowances), or more, as of 2016. This does not apply if the gifts are given to a spouse. This also does not apply for gifts given to charities and deducted as such.



is it correct that the $5.45 million lifetime gift/estate exemption erases any tax payment liability for the current year?=======>>Corrct.it means that your spouse does not need to pay gift tax since the amt of your gift in only $75K