IRS Form 709. United States Gift (and Generation-Skipping Transfer) Tax Return

IRS Form 709. United States Gift (and Generation-Skipping Transfer) Tax Return

Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, is a tax form used to report gifts and certain transfers made during a taxpayer's lifetime. The main purpose of the form is to calculate and report any gift tax liability that may be due.

The form consists of several parts, including a summary section, a computation section, and a gift tax paid section. Important fields on the form include the donor's name, address, and social security number, as well as the recipient's name and relationship to the donor. The parties involved in the form are the donor and the recipient(s) of the gift.

When compiling the form, data such as the fair market value of the gift, any exemptions or deductions that may apply, and the amount of any previous gifts made by the donor will be required. In addition to the form itself, supporting documentation such as appraisals, deeds, or other documents related to the gift may need to be attached.

Application examples of Form 709 include gifting property, cash, or investments to family members, friends, or other individuals. The form is also used to report certain transfers made to skip persons, such as grandchildren or other relatives who are more than one generation younger than the donor.

Strengths of Form 709 include the ability to transfer wealth to future generations while minimizing estate tax liability. Weaknesses may include the complexity of the form and the potential for errors in calculating gift tax liability. Opportunities may include the ability to take advantage of annual gift tax exclusions and lifetime gift tax exemptions. Threats may include changes to tax laws or regulations that could impact gift tax liability.

Related forms to Form 709 include Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, which is used to report estate tax liability upon a taxpayer's death. Alternative forms or analogues include state-specific gift tax forms or forms used in other countries to report gift tax liability.

The submission and storage of Form 709 will vary depending on the taxpayer's location and filing method. Generally, the form is submitted to the Internal Revenue Service (IRS) along with the taxpayer's annual income tax return. The form should be stored with the taxpayer's other tax records for future reference.