Split Gift Law and Legal Definition

A split gift refers to a gift that is made by a spouse to a third person. The gift is given to a third person for gift tax purposes. It is also known as gift splitting or gift splitting election. Split gift provisions are provided in the Internal Revenue Code.[26 U.S.C. § 2513]. Under split gift, a married couple can treat gifts made by one spouse as if they were made one-half by each spouse. Split gifts can also minimize gift tax liability through the use of each spouse's graduated gift tax rates..

Requirements to qualify for split gift treatment include:

1.Both spouses must be citizens or residents of the U.S.;

2.The spouses must be married to each other at the time of the gift;

3.If the spouses subsequently divorce, neither spouse should remarry by the end of that year;

4.A donor spouse must transfer subject property to a third party.