Instructions For Form 709 - 2007 (Page 4 of 12) in pdf

If the donor died during 2007, the

In general, a gift will be considered

gift to the donee in the amount of half the

executor must file the donor’s 2007 Form

adequately disclosed if the return or

value of the property.

709 not later than the earlier of:

statement provides the following:

If you create a joint bank account for

•

The due date (with extensions) for filing

A description of the transferred

yourself and the donee (or a similar kind

the donor’s estate tax return or

property and any consideration received

of ownership by which you can get back

•

April 15, 2008, or the extended due

by the donor;

the entire fund without the donee’s

•

date granted for filing the donor’s gift tax

The identity of, and relationship

consent), you have made a gift to the

return.

between, the donor and each donee;

donee when the donee draws on the

•

If the property is transferred in trust, the

account for his or her own benefit. The

Under this rule, the 2007 Form 709 may

trust’s employer identification number

amount of the gift is the amount that the

be due before April 15, 2008, if the donor

(EIN) and a brief description of the terms

donee took out without any obligation to

died before July 15, 2007. If the donor

of the trust (or a copy of the trust

repay you.

died after July 14, 2007, the due date

instrument in lieu of the description); and

•

(without extensions) is April 15, 2008. If

Either a qualified appraisal or a detailed

If you buy a U.S. savings bond

no estate tax return is required to be filed,

description of the method used to

registered as payable to yourself or the

the due date for the 2007 Form 709

determine the fair market value of the gift.

donee, there is a gift to the donee when

(without extensions) is April 15, 2008. For

he or she cashes the bond without any

See Regulations section

more details, see Regulations section

obligation to account to you.

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

25.6075-1.

including what constitutes a qualified

Transfer of Certain Life

appraisal, the information required if no

Extension of Time To File

appraisal is provided, and the information

Estates Received From

There are two methods of extending the

required for transfers under sections 2701

time to file the gift tax return. Neither

Spouse

and 2702.

method extends the time to pay the gift or

If you received a qualified terminable

GST taxes. If you want an extension of

Penalties

interest (see Line 12. Election Out of

time to pay the gift or GST taxes, you

The law provides for penalties for both

QTIP Treatment of Annuities on page 10)

must request that separately. (See

late filing of returns and late payment of

from your spouse for which a marital

Regulations section 25.6161-1.)

tax unless you have reasonable cause.

deduction was elected on your spouse’s

By extending the time to file your

estate or gift tax return, you will be

The late filing penalty will not be

income tax return. Any extension of

subject to the gift tax (and GST tax, if

imposed if the taxpayer can show that the

time granted for filing your calendar year

applicable) if you dispose of all or part of

failure to file a timely return is due to

2007 federal income tax return will also

your life income interest (by gift, sale, or

reasonable cause. Those filing late (after

automatically extend the time to file your

otherwise).

the due date, including extensions)

2007 gift tax return. Income tax

should attach an explanation to the return

extensions are made by using Form

The entire value of the property

to show reasonable cause.

4868, Application for Automatic Extension

involved less:

of Time To File U.S. Individual Income

There are also penalties for valuation

1. The amount you received on the

Tax Return or Form 2350, Application for

understatements that cause an

disposition and

Extension of Time To File U.S. Income

underpayment of the tax, willful failure to

2. The amount (if any) of the life

Tax Return. You may only use these

file a return on time, and willful attempt to

income interest you retained after the

forms to extend the time for filing your gift

evade or defeat payment of tax. A

transfer will be treated as a taxable gift.

tax return if you are also requesting an

valuation understatement occurs when

That portion of the property’s value that is

extension of time to file your income tax

the reported value of property entered on

attributable to the remainder interest is a

return.

Form 709 is 65% or less of the actual

gift of a future interest for which no annual

value of the property.

By filing Form 8892. If you do not

exclusion is allowed. To the extent you

request an extension for your income tax

Return preparer. The law also provides

made a gift of the life income interest, you

return, use Form 8892, Application for

for the application of income tax return

may claim an annual exclusion, treating

Automatic Extension of Time To File

preparer penalties to all tax return

the person to whom you transferred the

Form 709 and/or Payment of Gift/

preparers, including gift tax return

interest as the donee for purposes of

Generation-Skipping Transfer Tax, to

preparers.

computing the annual exclusion.

request an automatic 6-month extension

The Small Business and Work

of time to file your federal gift tax return.

Opportunity Tax Act of 2007 amended

This form must be used instead of writing

section 6694 to extend the application of

Specific Instructions

a letter to the Cincinnati Service Center to

income tax return preparer penalties to all

request an extension of time to file Form

tax return preparers, including gift tax

709. In addition to containing an

return preparers. Under the amended

Part 1—General

extension request, Form 8892 also serves

provision and transitional relief provided

as a payment voucher (Form 8892-V) for

Information

by Notice 2008-13, 2008-3 I.R.B. 282, gift

a balance due on federal gift taxes for

tax return preparers who prepare any

Lines 4 and 6. Address. Enter your

which you are extending the time to file.

return or claim for refund which reflects

current mailing address.

For more information, see Form 8892.

an understatement of tax liability due to

Foreign address. If your address is

willful or reckless conduct are subject to a

Where To File

outside of the United States or its

penalty of $5,000 or 50% of the income

File Form 709 at the following address:

possessions or territories, enter the

derived (or income to be derived),

information on line 6 as follows: city,

whichever is greater, for the preparation

Department of the Treasury

province or state, and name of country.

of each such return. See section 6694

Internal Revenue Service Center

Follow the country’s practice for entering

and Notice 2008-13 for more details.

Cincinnati, OH 45999

the postal code. Do not abbreviate the

Joint Tenancy

country name.

Adequate Disclosure

If you buy property with your own funds

Line 5. Legal residence (domicile). In

To begin the running of the statute

and the title to such property is held by

general, your legal residence (also known

of limitations regarding a gift, the

yourself and the donee as joint tenants

as your domicile) is acquired by living in a

gift must be adequately disclosed

with right of survivorship and if either you

place, for even a brief period of time, with

CAUTION

on Form 709 (or an attached statement)

or the donee may give up those rights by

no definite present intention of moving

filed for the year of the gift.

severing your interest, you have made a

from that place.

-4-

Instructions For Form 709 - 2007 Page 4

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