Instructions For Form 709 - 2007 (Page 6 of 12) in pdf

Example. In 2007, D contributed

Use the following guidelines when

considered a terminable interest and,

TIP

$85,000 to a QTP for the benefit of her

entering gifts on Schedule A:

therefore, should not be shown on

son. D elects to treat $60,000 of this

Schedule A. For definitions and rules

•

contribution as having been made ratably

Enter a gift only once — in Part 1, Part

concerning these trusts, see section

over a 5-year period. Accordingly, for

2, or Part 3;

2056(b)(8)(B) and Regulations section

•

2007, D reports the following:

Do not enter any gift or part of a gift

20.2055-2.

that qualified for the political organization,

Future interest. Generally, you should

$25,000

(the amount of the contribution

educational, or medical exclusion;

not report a gift of a future interest to your

•

that exceeded $60,000)

Enter gifts under “Gifts made by

spouse unless the future interest is also a

+ $12,000

(the

portion from the election)

spouse” only if you have chosen to split

terminable interest that is required to be

gifts with your spouse and your spouse is

$37,000

the total gift to her son listed in

reported as described above. However, if

required to file a Form 709 (see Part 1 —

Part 1 of Schedule A for 2007

you gave a gift of a future interest to your

General Information, Lines 12-18. Split

spouse and you are required to report the

Gifts on page 5); and

In 2008, D gives a gift of $20,000 cash

gift on Form 709 because you gave the

•

In column F, enter the full value of the

to her niece and no other gifts. On her

present interest to a donee other than

gift (including those made by your

2008 Form 709, D reports in Part 1 of

your spouse, then you should enter the

spouse, if applicable). If you have chosen

Schedule A, the $20,000 gift to her niece

entire gift, including the future interest

to split gifts, that one-half portion of the

and a $12,000 gift to her son (the one-fifth

given to your spouse, on Schedule A. You

gift is entered in column G.

portion of the 2007 gift that is treated as

should use the rules under Gifts Subject

made in 2008). In column E of Part 1

Gifts to Donees Other Than

to Both Gift and GST Taxes below to

(Schedule A), D lists “2008” as the date of

determine whether to enter the gift on

Your Spouse

the gift.

Schedule A, Part 1, Part 2, or Part 3.

You must always enter all gifts of future

interests that you made during the

Spouses who are not U.S. citizens. If

D makes no gifts in 2009, 2010, or

calendar year regardless of their value.

your spouse is not a U.S. citizen and you

2011. She is not required to file Form 709

gave him or her a gift of a future interest,

in any of those years to report the

No gift splitting. If the total gifts of

you must report on Schedule A all gifts to

portion of the QTP gift, because she is

present interests to any donee are more

your spouse for the year. If all gifts to your

not otherwise required to file Form 709.

than $12,000 in the calendar year, then

spouse were present interests, do not

you must enter all such gifts that you

You make the election by checking the

report on Schedule A any gifts to your

made during the year to or on behalf of

box on line B at the top of Schedule A.

spouse if the total of such gifts for the

that donee, including those gifts that will

The election must be made for the

year does not exceed $125,000 and all

be excluded under the annual exclusion.

calendar year in which the contribution is

gifts in excess of $12,000 would qualify

If the total is $12,000 or less, you need

made. Also attach an explanation that

for a marital deduction if your spouse

not enter on Schedule A any gifts (except

includes the following:

were a U.S. citizen (see the instructions

gifts of future interests) that you made to

•

The total amount contributed per

for Schedule A, Part 4, line 4, on page 9).

that donee. Enter these gifts in the top

individual beneficiary,

If the gifts exceed $125,000, you must

half of Part 1, 2, or 3, as applicable.

•

The amount for which the election is

report all of the gifts even though some

Gift splitting elected. Enter on

being made, and

may be excluded.

•

Schedule A the entire value of every gift

The name of the individual for whom

you made during the calendar year while

the contribution was made.

Gifts Subject to Both Gift

you were married, even if the gift’s value

If you are electing gift splitting, apply

will be less than $12,000 after it is split in

and GST Taxes

the gift splitting rules before applying

Column G of Part 1, 2, or 3 of

these rules. Each spouse would then

Schedule A.

Definitions

decide individually whether to make this

Gifts made by spouse. If you elected

QTP election.

Direct skip. The GST tax you must

gift splitting and your spouse made gifts,

report on Form 709 is that imposed only

list those gifts in the space below “Gifts

Contributions to QTPs do not

on inter vivos direct skips. An “inter vivos

made by spouse” in Part 1, 2, or 3. Report

qualify for the education exclusion.

direct skip” is a transfer that is:

these gifts in the same way you report

•

Subject to the gift tax,

CAUTION

gifts you made.

•

Of an interest in property, and

•

Gifts to Your Spouse

How To Complete Parts 1, 2,

Made to a skip person.

and 3

All three requirements must be met

Except for the gifts described below, you

before the gift is subject to the GST tax.

do not need to enter any of your gifts to

After you determine which gifts you made

your spouse on Schedule A.

are subject to the gift tax and therefore

A gift is “subject to the gift tax” if you

Terminable interest. Terminable

should be listed on Schedule A, you must

are required to list it on Schedule A of

interests are defined in the instructions to

divide these gifts between:

Form 709. However, if you make a

Part 4, line 4 on page 9. If all the

nontaxable gift (which is a direct skip) to a

1. Part 1 — those subject only to the

terminable interests you gave to your

trust for the benefit of an individual, this

gift tax (gifts made to nonskip persons —

spouse qualify as life estates with power

transfer is subject to the GST tax unless:

see Part 1 — Gifts Subject Only to Gift

of appointment (defined under Life estate

Tax on page 8),

1. During the lifetime of the

with power of appointment on page 9),

2. Part 2 — those subject to both the

beneficiary, no corpus or income may be

you do not need to enter any of them on

gift and GST taxes (gifts made to skip

distributed to anyone other than the

Schedule A.

persons — see Gifts Subject to Both Gift

beneficiary and

However, if you gave your spouse any

and GST Taxes below and Part 2 — Direct

2. If the beneficiary dies before the

terminable interest that does not qualify

Skips on page 9), and

termination of the trust, the assets of the

as a life estate with power of

3. Part 3 — those subject only to the

trust will be included in the gross estate of

appointment, you must report on

gift tax at this time but which could later

the beneficiary.

Schedule A all gifts of terminable interests

be subject to GST tax (gifts that are

you made to your spouse during the year.

indirect skips, see Part 3 — Indirect Skips

Note. If the property transferred in the

on page 9).

Charitable remainder trusts. If you

direct skip would have been includible in

make a gift to a charitable remainder trust

the donor’s estate if the donor had died

If you need more space, attach a

and your spouse is the only noncharitable

immediately after the transfer, see

separate sheet using the same format as

beneficiary (other than yourself), the

Transfers Subject to an Estate Tax

Schedule A.

interest you gave to your spouse is not

Inclusion Period (ETIP) on page 3.

-6-

Instructions For Form 709 - 2007 Page 6

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