Instructions For Form 709 - 2009 (Page 8 of 12) in pdf

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itself is a skip person and you should list

If preferred, give the issue, par value,

Generally, the best indication of the

the gift in Part 2 of Schedule A.

quotation at which returned, and exact

value of real property is the price paid for

name of corporation;

the property in an arm’s-length

Example 4. You establish a trust

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If unlisted on a principal exchange, give

transaction on or before the valuation

that pays all of its income to your

the location of the principal business

date. If there has been no such

grandchildren for 10 years. At the end of

office of the corporation, the state in

transaction, use the comparable sales

10 years, the corpus is to be distributed to

which incorporated, and the date of

method. In comparing similar properties,

your children. Since for this purpose

incorporation;

consider differences in the date of the

interests in trusts are defined only as

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If listed, give principal exchange; and

sale, and the size, condition, and location

present interests, all of the interests in

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CUSIP number.

of the properties, and make all

this trust are held by skip persons (the

appropriate adjustments.

For interests in property based on the

children’s interests are future interests).

The value of all annuities, life estates,

length of a person’s life, give the date of

Therefore, the trust is a skip person and

terms for years, remainders, or reversions

birth of the person. If you transfer any

you should list the entire amount you

is generally the present value on the date

interest in a closely held entity, provide

transferred to the trust in Part 2 of

of the gift.

the EIN of the entity.

Schedule A even though some of the

Sections 2701 and 2702 provide

trust’s ultimate beneficiaries are nonskip

For life insurance policies, give the

special valuation rules to determine the

persons.

name of the insurer and the policy

amount of the gift when a donor transfers

number.

Part 1—Gifts Subject Only to

an equity interest in a corporation or

Clearly identify in the description

Gift Tax

partnership (section 2701) or makes a gift

column which gifts create the opening of

in trust (section 2702). The rules only

List in Part 1 gifts subject only to the gift

an ETIP as described under Transfers

apply if, immediately after the transfer, the

tax. Generally, all of the gifts you made to

Subject to an Estate Tax Inclusion Period

donor (or an applicable family member)

your spouse (that are required to be

(ETIP) on page 3. Describe the interest

holds an applicable retained interest in

listed, as described earlier), to your

that is creating the ETIP. An allocation of

the corporation or partnership, or retains

children, and to charitable organizations

GST exemption to property subject to an

an interest in the trust. For details, see

are not subject to the GST tax and

ETIP that is made prior to the close of the

sections 2701 and 2702, and their

should, therefore, be listed only in Part 1.

ETIP becomes effective no earlier than

regulations.

the date of the close of the ETIP. See the

Group the gifts in four categories:

Column G. Split Gifts

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instructions for Schedule C under

Gifts made to your spouse,

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Schedule C. Computation of GST Tax

Enter an amount in this column only if you

Gifts made to third parties that are to

beginning on page 10.

have chosen to split gifts with your

be split with your spouse,

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spouse.

Charitable gifts (if you are not splitting

Column D. Donor’s Adjusted Basis

gifts with your spouse), and

Split Gifts—Gifts Made by

of Gifts

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Other gifts.

Spouse

Show the basis you would use for income

If a transfer results in gifts to two or more

tax purposes if the gift were sold or

If you elected to split gifts with your

individuals (such as a life estate to one

exchanged. Generally, this means cost

spouse and your spouse has given a

with remainder to the other), list the gift to

plus improvements, less applicable

gift(s) that is being split with you, enter in

each separately.

depreciation, amortization, and depletion.

this area of Part 1 information on the

Number and describe all gifts

gift(s) made by your spouse. If only you

For more information on adjusted

(including charitable, public, and similar

made gifts and you are splitting them with

basis, see Pub. 551, Basis of Assets.

gifts) in the columns provided in

your spouse, do not make an entry in this

Columns E and F. Date and Value

Schedule A.

area.

of Gift

Generally, if you elect to split your

Column B

The value of a gift is the fair market value

gifts, you must split all gifts made by you

Describe each gift in enough detail so that

(FMV) of the property on the date the gift

and your spouse to third-party donees.

the property can be easily identified, as

is made. The FMV is the price at which

The only exception is if you gave your

explained below.

the property would change hands

spouse a general power of appointment

between a willing buyer and a willing

over a gift you made.

For real estate, give:

seller, when neither is forced to buy or to

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Supplemental Documents

A legal description of each parcel;

sell, and when both have reasonable

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The street number, name, and area if

To support the value of your gifts, you

knowledge of all relevant facts. FMV may

the property is located in a city; and

must provide information showing how it

not be determined by a forced sale price,

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A short statement of any improvements

was determined.

nor by the sale price of the item in a

made to the property.

market other than that in which the item is

For stock of close corporations or

most commonly sold to the public. The

inactive stock, attach balance sheets,

For bonds, give:

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location of the item must be taken into

particularly the one nearest the date of

The number of bonds transferred;

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account whenever appropriate.

the gift, and statements of net earnings or

The principal amount of each bond;

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Name of obligor;

operating results and dividends paid for

The FMV of a stock or bond (whether

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each of the 5 preceding years.

Date of maturity;

listed or unlisted) is the mean between

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Rate of interest;

For each life insurance policy, attach

the highest and lowest selling prices

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Date or dates when interest is payable;

Form 712, Life Insurance Statement.

quoted on the valuation date. If only the

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Series number, if there is more than

closing selling prices are available, then

Note for single premium or paid-up

one issue;

the FMV is the mean between the quoted

policies. In certain situations, for

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Exchanges where listed or, if unlisted,

closing selling price on the valuation date

example, where the surrender value of

give the location of the principal business

and on the trading day before the

the policy exceeds its replacement cost,

office of the corporation; and

valuation date. To figure the FMV if there

the true economic value of the policy will

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CUSIP number. The CUSIP number is

were no sales on the valuation date, see

be greater than the amount shown on line

a nine-digit number assigned by the

the instructions for Schedule B of Form

59 of Form 712. In these situations, report

American Banking Association to traded

706.

the full economic value of the policy on

securities.

Schedule A. See Rev. Rul. 78-137,

Stock of close corporations or inactive

1978-1 C.B. 280 for details.

For stocks:

stock must be valued on the basis of net

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Give number of shares;

worth, earnings, earning and dividend

If the gift was made by means of a

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State whether common or preferred;

capacity, and other relevant factors.

trust, attach a certified or verified copy of

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Instructions For Form 709 - 2009 Page 8

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