Gifts made to trusts are commonly required to be reported on Form 709 because they often involve future interests or require classification under gift tax and generation-skipping transfer tax rules. Form 709 is used to disclose the transfer, determine whether any exclusions apply, and document how the gift is treated for tax purposes.
Why trust gifts are generally reportable
Under federal gift tax rules reflected in the Form 709 instructions, most gifts to trusts do not qualify as gifts of present interest. Because the beneficiary typically does not receive an immediate and unrestricted right to use or possess the property, the annual exclusion is often not available, making the gift reportable regardless of value.
How trust gifts are reported on the form
Trust gifts are reported on Schedule A of Form 709. Depending on the structure of the trust and the beneficiary, the gift may be reported in Part 1, Part 2, or Part 3. Gifts that are direct skips or indirect skips are classified accordingly so that generation-skipping transfer tax rules can be applied.
Present interest versus future interest in trusts
Whether a trust gift qualifies for the annual exclusion depends on whether the beneficiary has a present interest. If the trust provides the beneficiary with an immediate right to withdraw or use the property, the gift may qualify for the annual exclusion. If not, the gift is treated as a future interest and must be fully reported on Form 709.
Interaction with generation-skipping transfer tax
Trust gifts involving skip persons or certain trust structures may trigger generation-skipping transfer tax considerations. These gifts are reported in Schedule A and carried to Schedule D to allocate GST exemption and compute any applicable tax.
Effect on exclusions and lifetime tracking
Trust gifts reported on Form 709 are included in the taxable gift reconciliation process in Schedule A, Part 4. Even when no gift tax is due, reporting is required to track lifetime exclusion usage and GST exemption allocations accurately.
This page explains how gifts to trusts are treated on Form 709. For which gifts must be reported, see what gifts must be reported on Form 709. For generation-skipping considerations, see Schedule D and GST tax explained. For overall filing context, see how to file Form 709. For the authoritative rules and official instructions, refer to the IRS Form 709 official document overview.