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domestic or foreign educational

never been transferred to that person.

$10,000 annual exclusion. In this

organization as tuition for the education

Accordingly, the disclaimant is not

instance, you may want to apply a GST

or training of the individual. A qualifying

regarded as making a gift to the person

exemption amount to the transfer on this

educational organization is one that

who receives the property because of the

return or on a Notice of Allocation. For

normally maintains a regular faculty and

qualified disclaimer.

more information, see Part 2—GST

curriculum and normally has a regularly

Exemption Reconciliation on page 10.

Requirements. To be a qualified

enrolled body of pupils or students in

disclaimer, a refusal to accept an interest

Transfers Subject to an “Estate

attendance at the place where its

in property must meet the following

Tax Inclusion Period”

educational activities are regularly carried

conditions:

on. See section 170(b)(1)(A)(ii) and its

If property that is transferred by gift in a

1. The refusal must be in writing;

regulations.

GST direct skip would have been

2. The refusal must be received by the

The payment must be made directly to

includible in the donor's estate if the donor

donor, the legal representative of the

the qualifying educational organization

had died immediately after the transfer

donor, the holder of the legal title to the

and it must be for tuition. No educational

(other than by reason of the donor having

property to which the interest relates, or

exclusion is allowed for amounts paid for

died within 3 years of making the gift), the

the person in possession of the property

books, supplies, room and board, or other

direct skip will be treated as having been

within 9 months after the later of (a) the

similar expenses that do not constitute

made at the end of the “estate tax

day on which the transfer creating the

direct tuition costs. To the extent that the

inclusion period” (ETIP) rather than at the

interest is made or (b) the day on which

payment to the educational institution was

time it was actually made. For details, see

the disclaimant reaches age 21;

for something other than tuition, it is a gift

section 2642(f).

3. The disclaimant must not have

to the individual for whose benefit it was

Report the gift portion of such a transfer

accepted the interest or any of its

made, and may be offset by the annual

in Schedule A, Part 1, at the time of the

benefits;

exclusion if it is otherwise available.

actual transfer. Report the GST portion in

4. As a result of the refusal, the

Contributions to a qualified state tuition

Schedule A, Part 2, but only at the close

interest must pass without any direction

program on behalf of a designated

of the ETIP. Use Form 709 only to report

from the disclaimant to either (a) the

beneficiary do not qualify for the

those transfers where the ETIP closed

spouse of the decedent or (b) a person

educational exclusion.

due to something other than the donor's

other than the disclaimant; and

death. If the ETIP closed as the result of

Medical exclusion. The gift tax does not

5. The refusal must be irrevocable and

the donor's death, report the transfer on

apply to an amount you paid on behalf of

unqualified.

Form 706.

an individual to a person or institution that

The 9-month period for making the

provided medical care for the individual.

If you are filing this Form 709 solely to

disclaimer generally is determined

The payment must be to the care

report transfers subject to an ETIP,

separately for each taxable transfer. For

provider. The medical care must meet the

complete the form as you normally would

gifts, the period begins on the date the

requirements of section 213(d) (definition

with the following exceptions:

transfer is a completed transfer for gift tax

of medical care for income tax deduction

1. Write “ETIP” at the top of page 1;

purposes. For a transfer by will, it begins

purposes). Medical care includes

2. Complete only lines 1–4, 6, 8, and

on the date of the decedent's death.

expenses incurred for the diagnosis, cure,

9 of Part 1, General Information;

mitigation, treatment, or prevention of

Transfers Subject to the

3. Complete Schedule A, Part 2, as

disease, or for the purpose of affecting

Generation-Skipping Transfer Tax

explained in the instructions for that

any structure or function of the body, or

schedule on page 8;

for transportation primarily for and

You must report on Form 709 the GST tax

4. Complete Column B of Schedule

essential to medical care. Medical care

imposed on inter vivos direct skips. (See

C, Part 1, as explained in the instructions

also includes amounts paid for medical

Regulations section 26.2662-1(b) for

for that schedule on page 10;

insurance on behalf of any individual.

instructions on how to report other

generation-skipping transfers.) An inter

5. Complete only lines 14 and 15 of

The medical exclusion does not apply

vivos direct skip is a transfer made during

Schedule A, Part 3. (Also list here direct

to amounts paid for medical care that are

the donor's lifetime that is: (a) subject to

skips that are subject only to the GST tax

reimbursed by the donee's insurance. If

the gift tax; (b) of an interest in property;

as the result of the termination of an

payment for a medical expense is

and (c) made to a skip person. (See page

“estate tax inclusion period.” See

reimbursed by the donee's insurance

6.)

instructions for Schedule C on page 10.)

company, your payment for that expense,

to the extent of the reimbursed amount,

A transfer is subject to the gift tax if it

Section 2701 Elections

is not eligible for the medical exclusion

is required to be reported on Schedule A

and you have made a gift to the donee.

The special valuation rules of section

of Form 709 under the rules contained in

2701 contain three elections that you

the gift tax portions of these instructions,

To the extent that the payment was for

including the split gift rules. Therefore,

must make with Form 709.

something other than medical care, it is a

transfers made to political organizations,

gift to the individual on whose behalf the

1. A transferor may elect to treat a

transfers that qualify for the medical or

payment was made and may be offset by

qualified payment right he or she holds

educational exclusions, transfers that are

the annual exclusion if it is otherwise

(and all other rights of the same class) as

fully excluded under the annual exclusion,

available.

other than a qualified payment right.

and most transfers made to your spouse

The medical and educational

2. A person may elect to treat a

are not subject to the GST tax.

exclusions are allowed without regard to

distribution right held by that person in a

Transfers subject to the GST tax are

the relationship between you and the

controlled entity as a qualified payment

described in further detail in the

donee. For examples illustrating these

right.

instructions on page 6.

exclusions, see Regulations section

3. An interest holder may elect to treat

25.2503-6.

Important: Certain transfers, particularly

as a taxable event the payment of a

transfers to a trust, that are not subject to

Qualified disclaimers. A donee's refusal

qualified payment that occurs more than

gift tax and are therefore not subject to

to accept a gift is called a disclaimer. If

4 years after its due date.

the GST tax on Form 709 may be subject

a person makes a qualified disclaimer

The elections described in 1 and 2 must

to the GST tax at a later date. This is true

with respect to any interest in property,

be made on the Form 709 that is filed by

even if the transfer is less than the

the property will be treated as if it had

the transferor to report the transfer that is

Page 2

Instructions For Form 709 - United States Gift (And Generation-Skipping Transfer) Tax Return - 2000 Page 2

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