What is the Form 709?

Form 709 is the United States Gift and Generation-Skipping Transfer Tax Return, used to report taxable gifts made during a person's lifetime and allocate lifetime generation-skipping tax exemptions. In this article, we'll provide the exact steps for filling out Form 709 and other important information.

Information included in Form 709:

• Personal information of the donor
• Details of financial gifts made
• Details related to generation-skipping transfers

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Who needs to file the Form 709?

Form 709 is typically required to be filed by U.S. citizens and residents who make gifts exceeding the annual exclusion amount, which is $15,000 per recipient for 2021. This includes gifts of cash, property, or other assets to individuals, trusts, or organizations. However, there are several exceptions to this rule, which are outlined below:

• Gifts that do not exceed the annual exclusion amount per recipient
• Gifts made to a spouse who is a U.S. citizen
• Tuition or medical expenses paid directly to an educational or medical institution on behalf of someone else
• Gifts to political organizations for their use
• Gifts to certain exempt organizations, such as charities

Essential updates to the Form 709

For the most recent updates to Form 709, there are a few notable changes to be aware of:

• The annual exclusion amount for gifts has increased to $15,000 per recipient for 2021, up from $14,000 in 2017.
• For 2021, the lifetime gift and estate tax exemption has increased to $11.7 million per individual, up from $11.58 million in 2020. This means that an individual can give away up to $11.7 million during their lifetime or at death without incurring federal gift or estate taxes.
• The generation-skipping transfer (GST) tax exemption has also increased to $11.7 million for 2021, up from $11.58 million in 2020. This exemption allows individuals to make gifts to grandchildren or other descendants without incurring the GST tax.

It's important to stay informed about any changes to tax forms and regulations, as they can impact your tax planning and filing process.

2024 Form 709 filing deadlines

Form 709 must be filed each year that a taxable gift is made, typically by April 15 of the year following the year in which the gifts were given. This allows individuals ample time to prepare and submit the form. If the due date falls on a weekend or legal holiday, the deadline is extended to the next business day.

Exact deadline dates for 2024

• Form 709 must be filed no earlier than January 1 but not later than April 15 of the year after the gift was made.
• If the donor died during the year, the executor must file the donor's Form 709 no later than the earlier of the due date (with extensions) for filing the donor's estate tax return or April 15 of the following year.
• Any extension of time granted for filing a calendar year federal income tax return will also automatically extend the time to file the federal gift tax return.
• Form 8892 can be used to request an automatic 6-month extension of time to file the federal gift tax return if not requesting an income tax return extension.

Form 709 late payment penalty

Failure to file Form 709 on time or underreporting your tax liability can result in IRS penalties. It’s important to ensure you give yourself enough time to complete and file your Form 709 by the deadline, which is generally April 15 of the year following the year in which the gifts were made. If the donor passed away during the year, the executor must file the donor's Form 709 no later than the earlier of the due date (with extensions) for filing the donor's estate tax return or April 15 of the following year.

Step-by-Step Instructions for Form 709

Part I: General Information

• Line 1: Donor’s first name and middle initial.
• Line 2: Donor’s last name.
• Line 3: Donor’s social security number.
• Line 4: Address (number, street, and apartment number).
• Line 5: Legal residence (domicile).
• Line 6: City or town, state or province, country, and ZIP or foreign postal code.
• Line 7: Citizenship.
• Line 8: If the donor died during the year, check here and enter the date of death.
• Line 9: If you extended the time to file this Form 709, check here.
• Line 10: Enter the total number of donees listed on Schedule A. Count each person only once.
• Line 11a: Have you (the donor) previously filed a Form 709 (or 709-A) for any other year? If "No," skip line 11b.
• Line 11b: Has your address changed since you last filed Form 709 (or 709-A)?

This section collects essential donor information, including identification and address details, crucial for associating the gift tax return with the correct individual and tax records.

Part II: Consent of Spouse and Gift Details

• Line 12: Gifts by husband or wife to third parties. Do you consent to have the gifts (including generation-skipping transfers) made by you and your spouse to third parties during the calendar year considered as made one-half by each of you?
  • a: Name of consenting spouse.
  • b: SSN.
  • c: Were you married to one another during the entire calendar year?
  • d: If line 15 is “No,” check whether married divorced or widowed/deceased, and give date.
  • e: Will a gift tax return for this year be filed by your spouse? If “Yes,” mail both returns in the same envelope.
• Line 13: Consent of Spouse. I consent to have the gifts (and generation-skipping transfers) made by me and by my spouse to third parties during the calendar year considered as made one-half by each of us.

This part addresses marital gifts, requiring consent for gifts made by spouses to be considered jointly for tax purposes, affecting how gifts are reported and taxed.

Part III: Computation of Tax

• Line 14: Enter the amount from Schedule A, Part 4, line 11.
• Line 15: Enter the amount from Schedule B, line 3.
• Line 16: Total taxable gifts. Add lines 14 and 15.
• Line 17: Tax computed on amount on line 16 (see Table for Computing Gift Tax in instructions).
• Line 18: Balance. Subtract line 17 from the tax computed on the previous total taxable amount.
• Line 19: Applicable credit amount. If donor has DSUE amount from predeceased spouse(s) or Restored Exclusion Amount, enter amount from Schedule C, line 5; otherwise, see instructions.
• Line 20: Balance. Subtract the applicable credit from the previous balance. Do not enter less than zero.

This section is dedicated to calculating the gift tax based on the total taxable gifts and applying any applicable credits or exclusions, ensuring accurate tax liability is determined.

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• Signature of donor.
• Date.
• May the IRS discuss this return with the preparer shown below? Yes/No.

How to file Form 709

Form 709 can be filed by mail. To file by mail, send the completed form to the Department of the Treasury, Internal Revenue Service Center, Kansas City, MO 64999. If using a Private Delivery Service (PDS), file at Internal Revenue Service, 333 W. Pershing Road, Kansas City, MO 64108. The instructions do not provide specific information about filing Form 709 online, suggesting a focus on paper filing.

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