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that is not made in trust. You should list it

Name of obligor;

determined by a forced sale price, nor by

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in Part 2 of Schedule A.

Date of maturity;

the sale price of the item in a market

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Rate of interest;

other than that in which the item is most

Example 3. You establish a trust that

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Date or dates when interest is payable;

commonly sold to the public. The location

is required to accumulate income for 10

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Series number, if there is more than

of the item must be taken into account

years and then pay its income to your

one issue;

wherever appropriate.

grandchildren for their lives and upon

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Exchanges where listed or, if unlisted,

their deaths distribute the corpus to their

The fair market value of a stock or

give the location of the principal business

children. Because the trust has no current

bond (whether listed or unlisted) is the

office of the corporation; and

beneficiaries, there are no present

mean between the highest and lowest

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CUSIP number. The CUSIP number is

interests in the property transferred to the

selling prices quoted on the valuation

a nine-digit number assigned by the

trust. All of the persons to whom the trust

date. If only the closing selling prices are

American Banking Association to traded

can make future distributions (including

available, then the fair market value is the

securities.

distributions upon the termination of

mean between the quoted closing selling

interests in property held in trust) are skip

For stocks:

price on the valuation date and on the

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persons (that is, your grandchildren and

Give number of shares;

trading day before the valuation date. To

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great-grandchildren). Therefore, the trust

State whether common or preferred;

figure the fair market value if there were

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itself is a skip person and you should list

If preferred, give the issue, par value,

no sales on the valuation date, see the

the gift in Part 2 of Schedule A.

quotation at which returned, and exact

instructions for Schedule B of Form 706.

name of corporation;

Example 4. You establish a trust

Stock of close corporations or inactive

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If unlisted on a principal exchange, give

that pays all of its income to your

stock must be valued on the basis of net

the location of the principal business

grandchildren for 10 years. At the end of

worth, earnings, earning and dividend

office of the corporation, the state in

10 years, the corpus is to be distributed to

capacity, and other relevant factors.

which incorporated, and the date of

your children. Since for this purpose

Generally, the best indication of the

incorporation;

interests in trusts are defined only as

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value of real property is the price paid for

If listed, give principal exchange; and

present interests, all of the interests in

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the property in an arm’s-length

CUSIP number.

this trust are held by skip persons (the

transaction on or before the valuation

children’s interests are future interests).

For interests in property based on the

date. If there has been no such

Therefore, the trust is a skip person and

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

transaction, use the comparable sales

you should list the entire amount you

birth of the person. If you transfer any

method. In comparing similar properties,

transferred to the trust in Part 2 of

interest in a closely held entity, provide

consider differences in the date of the

Schedule A even though some of the

the employer identification number (EIN)

sale, and the size, condition, and location

trust’s ultimate beneficiaries are nonskip

of the entity.

of the properties, and make all

persons.

For life insurance policies, give the

appropriate adjustments.

Part 1—Gifts Subject Only to

name of the insurer and the policy

The value of all annuities, life estates,

Gift Tax

number.

terms for years, remainders, or reversions

List in Part 1 gifts subject only to the gift

Clearly identify in the description

is generally the present value on the date

tax. Generally, all of the gifts you made to

column which gifts create the opening of

of the gift.

your spouse (that are required to be

an estate tax inclusion period (ETIP) as

Sections 2701 and 2702 provide

listed, as described earlier), to your

described under Transfers Subject to an

special valuation rules to determine the

children, and to charitable organizations

Estate Tax Inclusion Period on page 3.

amount of the gift when a donor transfers

are not subject to the GST tax and

Describe the interest that is creating the

an equity interest in a corporation or

should, therefore, be listed only in Part 1.

ETIP. An allocation of GST exemption to

partnership (section 2701) or makes a gift

property subject to an ETIP that is made

Group the gifts in four categories:

in trust (section 2702). The rules only

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prior to the close of the ETIP becomes

Gifts made to your spouse,

apply if, immediately after the transfer, the

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effective no earlier than the date of the

Gifts made to third parties that are to

donor (or an applicable family member)

close of the ETIP. See the instructions for

be split with your spouse,

holds an applicable retained interest in

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Schedule C under Schedule C —

Charitable gifts (if you are not splitting

the corporation or partnership, or retains

Computation of Generation-Skipping

gifts with your spouse), and

an interest in the trust. For details, see

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Transfer Tax beginning on page 10.

Other gifts.

sections 2701 and 2702, and their

If a transfer results in gifts to two or more

regulations.

Column D. Donor’s Adjusted

individuals (such as a life estate to one

Basis of Gifts

with remainder to the other), list the gift to

Column G — Split Gifts

each separately.

Show the basis you would use for income

Enter an amount in this column only if you

tax purposes if the gift were sold or

Number and describe all gifts

have chosen to split gifts with your

exchanged. Generally, this means cost

(including charitable, public, and similar

spouse.

plus improvements, less applicable

gifts) in the columns provided in

Split gifts — gifts made by spouse

depreciation, amortization, and depletion.

Schedule A.

If you have elected to split gifts with your

For more information on adjusted

Column B

spouse and your spouse has given a

basis, see Pub. 551, Basis of Assets.

Describe each gift in enough detail so that

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

the property can be easily identified, as

Columns E and F. Date and

this area of Part 1 information on the

explained below.

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

Value of Gift

made gifts and you are splitting them with

For real estate, provide:

The value of a gift is the fair market value

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your spouse, do not make an entry in

A legal description of each parcel;

of the property on the date the gift is

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this area.

The street number, name, and area if

made. The fair market value is the price

the property is located in a city; and

at which the property would change

Generally, if you elect to split your

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A short statement of any improvements

hands between a willing buyer and a

gifts, you must split all gifts made by you

made to the property.

willing seller, when neither is forced to

and your spouse to third-party donees.

For bonds, give:

buy or to sell, and when both have

The only exception is if you gave your

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The number of bonds transferred;

reasonable knowledge of all relevant

spouse a general power of appointment

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The principal amount of each bond;

facts. Fair market value may not be

over a gift you made.

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Instructions For Form 709 - United States Gift (And Generation-Skipping Transfer) Tax Return - 2005 Page 8

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