Instructions For Form 709 - 2007 (Page 10 of 12) in pdf

gift of a terminable interest if all four

international amateur sports competition

(However, be sure to complete Schedule

requirements below are met:

(if none of its activities involve providing

C, if applicable.) If you filed gift tax returns

athletic equipment unless it is a qualified

for previous periods, check the “Yes” box

1. Your spouse is entitled for life to all

amateur sports organization), as long as

on line 11a and complete Schedule B by

of the income from the entire interest;

no part of the earnings benefits any one

listing the years or quarters in

2. The income is paid yearly or more

person, no substantial propaganda is

chronological order as described below. If

often;

produced, and no lobbying or

you need more space, attach a separate

3. Your spouse has the unlimited

campaigning for any candidate for public

sheet using the same format as

power, while he or she is alive or by will,

office is done;

Schedule B.

to appoint the entire interest in all

•

A fraternal society, order, or

circumstances; and

If you filed returns for gifts made

association operating under a lodge

4. No part of the entire interest is

before 1971 or after 1981, show the

system, if the transferred property is to be

subject to another person’s power of

calendar years in column A. If you filed

used only for religious, charitable,

appointment (except to appoint it to your

returns for gifts made after 1970 and

scientific, literary, or educational

spouse).

before 1982, show the calendar quarters.

purposes, including the encouragement of

In column B, identify the Internal

art and the prevention of cruelty to

If either the right to income or the

Revenue Service office where you filed

children or animals; or

power of appointment given to your

•

the returns. If you have changed your

Any war veterans’ organization

spouse pertains only to a specific portion

name, be sure to list any other names

organized in the United States (or any of

of a property interest, the marital

under which the returns were filed. If

its possessions), or any of its auxiliary

deduction is allowed only to the extent

there was any other variation in the

departments or local chapters or posts, as

that the rights of your spouse meet all

names under which you filed, such as the

long as no part of any of the earnings

four of the above conditions. For

use of full given names instead of initials,

benefits any one person.

example, if your spouse is to receive all of

please explain.

the income from the entire interest, but

On line 7, show your total charitable,

In column C, enter the amount of

only has a power to appoint one-half of

public, or similar gifts (minus annual

unified credit actually applied in the prior

the entire interest, then only one-half

exclusions allowed). On the dotted line,

period. If you are required to reduce your

qualifies for the marital deduction.

indicate which numbered items from the

allowable unified credit because of gifts

top of Schedule A are charitable gifts.

A partial interest in property is treated

you made after September 8, 1976, and

as a specific portion of an entire interest

Line 10. GST Tax

before January 1, 1977, enter the unified

only if the rights of your spouse to the

credit determined after the reduction.

If you will pay GST tax with this return on

income and to the power constitute a

any direct skips reported on this return,

In column E, show the correct amount

fractional or percentile share of the entire

the amount of that GST tax is also

(the amount finally determined) of the

property interest. This means that the

considered a gift and must be added to

taxable gifts for each earlier period.

interest or share will reflect any increase

your other gifts reported on this return.

or decrease in the value of the entire

See Regulations section 25.2504-2 for

property interest. If the spouse is entitled

If you entered gifts on Part 2, or if you

rules regarding the final determination of

to receive a specified sum of income

and your spouse elected gift splitting and

the value of a gift.

annually, the capital amount that would

your spouse made gifts subject to the

produce such a sum will be considered

GST tax that you are required to show on

Schedule C. Computation

the specific portion from which the spouse

your Form 709, complete Schedule C,

is entitled to receive the income.

and enter on line 10 the total of Schedule

of GST Tax

C, Part 3, column H. Otherwise, enter

Election to deduct qualified terminable

zero on line 10.

interest property (QTIP). You may elect

Part 1—Generation-Skipping

to deduct a gift of a terminable interest if it

Line 12. Election Out of QTIP

Transfers

meets requirements (1), (2), and (4)

Treatment of Annuities

You must enter in Part 1 all of the gifts

above, even though it does not meet

Section 2523(f)(6) creates an automatic

you listed in Part 2 of Schedule A, in that

requirement (3).

QTIP election for gifts of joint and survivor

order and using those same values.

You make this election simply by

annuities where the spouses are the only

Column B

listing the qualified terminable interest

possible recipients of the annuity prior to

property on Schedule A and deducting its

If you are reporting a generation-skipping

the death of the last surviving spouse.

value from Schedule A, Part 4, line 4. You

transfer that occurred because of the

The donor spouse can elect out of

are presumed to have made the election

close of an ETIP, complete column B for

QTIP treatment, however, by checking

for all qualified property that you both list

such transfer as follows.

the box on line 12 and entering the item

and deduct on Schedule A. You may not

1. Provided the GST exemption is

number from Schedule A for the annuities

make the election on a late filed Form

being allocated on a timely filed gift tax

for which you are making the election.

709.

return, enter the value as of the close of

Any annuities entered on line 12 cannot

the ETIP.

Line 5

also be entered on line 4 of Schedule A,

2. If the exemption is being allocated

Part 4. Any such annuities that are not

Enter the amount of the annual

after the due date (including extensions)

listed on line 12 must be entered on line 4

exclusions that were claimed for the gifts

for the gift tax return on which the transfer

of Part 4, Schedule A. If there is more

you listed on line 4.

should be reported, enter the value as of

than one such joint and survivor annuity,

Line 7. Charitable Deduction

the time the exemption allocation was

you are not required to make the election

made.

You may deduct from the total gifts made

for all of them. Once made, the election is

during the calendar year all gifts you gave

irrevocable.

Column C

to or for the use of:

•

The United States, a state or political

You are allowed to claim the gift tax

Schedule B. Gifts From

subdivision of a state or the District of

annual exclusion currently allowable with

Columbia, for exclusively public purposes;

respect to your reported direct skips

Prior Periods

•

Any corporation, trust, community

(other than certain direct skips to trusts —

chest, fund, or foundation organized and

If you did not file gift tax returns for

see Note on page 11), using the rules and

operated only for religious, charitable,

previous periods, check the “No” box on

limits discussed earlier for the gift tax

scientific, literary, or educational

page 1 of Form 709, line 11a of Part 1 —

annual exclusion. However, you must

purposes, or to prevent cruelty to children

General Information and skip to Part 2 —

allocate the exclusion on a gift-by-gift

or animals, or to foster national or

Tax Computation on the same page.

basis for GST computation purposes. You

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Instructions For Form 709 - 2007 Page 10

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