Instructions For Form 709 - 2009 (Page 4 of 12) in pdf

Extension of Time To File

including what constitutes a qualified

Transfer of Certain Life

appraisal, the information required if no

There are two methods of extending the

Estates Received From

appraisal is provided, and the information

time to file the gift tax return. Neither

required for transfers under sections 2701

method extends the time to pay the gift or

Spouse

and 2702.

GST taxes. If you want an extension of

If you received a qualified terminable

time to pay the gift or GST taxes, you

Penalties

interest (see Line 12. Election Out of

must request that separately. (See

QTIP Treatment of Annuities on page 10)

Regulations section 25.6161-1.)

The law provides for penalties for both

from your spouse for which a marital

late filing of returns and late payment of

By extending the time to file your

deduction was elected on your spouse’s

tax unless you have reasonable cause.

income tax return. Any extension of

estate or gift tax return, you will be

time granted for filing your calendar year

The late filing penalty will not be

subject to the gift tax (and GST tax, if

2009 federal income tax return will also

imposed if the taxpayer can show that the

applicable) if you dispose of all or part of

automatically extend the time to file your

failure to file a timely return is due to

your life income interest (by gift, sale, or

2009 gift tax return. Income tax

reasonable cause. Those filing late (after

otherwise).

extensions are made by using Form

the due date, including extensions)

Generally, the entire value of the

4868, Application for Automatic Extension

should attach an explanation to the return

property involved less:

of Time To File U.S. Individual Income

to show reasonable cause.

1. The amount you received (if any)

Tax Return, or Form 2350, Application for

There are also penalties for valuation

for the life income interest, and

Extension of Time To File U.S. Income

understatements that cause an

2. The amount (if any) determined

Tax Return. You may only use these

underpayment of the tax, willful failure to

after the application of section 2702,

forms to extend the time for filing your gift

file a return on time, and willful attempt to

valuing certain retained interests at zero,

tax return if you are also requesting an

evade or defeat payment of tax. A

for the life income interest you retained

extension of time to file your income tax

valuation understatement occurs when

after the transfer will be treated as a

return.

the reported value of property entered on

taxable gift.

By filing Form 8892. If you do not

Form 709 is 65% or less of the actual

request an extension for your income tax

That portion of the property’s value that is

value of the property.

return, use Form 8892, Application for

attributable to the remainder interest is a

Return preparer. The law also provides

Automatic Extension of Time To File

gift of a future interest for which no annual

for the application of income tax return

Form 709 and/or Payment of Gift/

exclusion is allowed. To the extent you

preparer penalties to all tax return

Generation-Skipping Transfer Tax, to

made a gift of the life income interest, you

preparers, including gift tax return

request an automatic 6-month extension

may claim an annual exclusion, treating

preparers.

of time to file your federal gift tax return.

the person to whom you transferred the

In addition to containing an extension

The Small Business and Work

interest as the donee for purposes of

request, Form 8892 also serves as a

Opportunity Tax Act of 2007 amended

computing the annual exclusion.

payment voucher (Form 8892-V) for a

section 6694 to extend the application of

income tax return preparer penalties to all

balance due on federal gift taxes for

tax return preparers, including gift tax

which you are extending the time to file.

Specific Instructions

For more information, see Form 8892.

return preparers. Under the amended

provision, gift tax return preparers who

Where To File

prepare any return or claim for refund that

Part 1—General

reflects an understatement of tax liability

File Form 709 at the following address:

Information

due to willful or reckless conduct are

Department of the Treasury

subject to a penalty of $5,000 or 50% of

Lines 4 and 6. Address. Enter your

Internal Revenue Service Center

the income derived (or income to be

current mailing address.

Cincinnati, OH 45999

derived), whichever is greater, for the

Foreign address. If your address is

preparation of each such return. See

See the Caution under Lines 12 –

outside of the United States or its

section 6694, the regulations thereunder,

TIP

18. Split Gifts on page 5 before

possessions or territories, enter the

and Ann. 2009-15, 2009-11 I.R.B. 687 for

you mail the return.

information on line 6 as follows: city,

more information.

province or state, and name of country.

Adequate Disclosure

Follow the country’s practice for entering

Joint Tenancy

the postal code. Do not abbreviate the

If you buy property with your own funds

To begin the running of the statute

country name.

and the title to such property is held by

of limitations regarding a gift, the

Line 5. Legal residence (domicile). In

yourself and the donee as joint tenants

gift must be adequately disclosed

CAUTION

general, your legal residence (also known

with right of survivorship and if either you

on Form 709 (or an attached statement)

as your domicile) is acquired by living in a

or the donee may give up those rights by

filed for the year of the gift.

place, for even a brief period of time, with

severing your interest, you have made a

In general, a gift will be considered

no definite present intention of moving

gift to the donee in the amount of half the

adequately disclosed if the return or

from that place.

value of the property.

statement provides the following:

Enter one of the states of the United

•

If you create a joint bank account for

A description of the transferred

States (including the District of Columbia)

yourself and the donee (or a similar kind

property and any consideration received

or a foreign country in which you legally

of ownership by which you can get back

by the donor;

reside or are domiciled at the time of the

•

the entire fund without the donee’s

The identity of, and relationship

gift.

consent), you have made a gift to the

between, the donor and each donee;

•

Line 7. Citizenship. Enter your

donee when the donee draws on the

If the property is transferred in trust, the

account for his or her own benefit. The

citizenship.

trust’s employer identification number

amount of the gift is the amount that the

(EIN) and a brief description of the terms

The term “citizen of the United States”

donee took out without any obligation to

of the trust (or a copy of the trust

includes a person who, at the time of

repay you.

instrument in lieu of the description); and

making the gift:

•

Either a qualified appraisal or a detailed

If you buy a U.S. savings bond

Was domiciled in a possession of the

description of the method used to

registered as payable to yourself or the

United States,

•

determine the fair market value of the gift.

donee, there is a gift to the donee when

Was a U.S. citizen, and

•

See Regulations section

he or she cashes the bond without any

Became a U.S. citizen for a reason

301.6501(c)-1(e) and (f) for details,

obligation to account to you.

other than being a citizen of a U.S.

-4-

Instructions For Form 709 - 2009 Page 4

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