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being valued under section 2701. The

gifts you made to your spouse during the

A gift of a future interest cannot be

elections are made by attaching a

year exceed $103,000, or if you made any

excluded under the annual exclusion.

statement to Form 709. For information

gift of a terminable interest that does not

A gift is considered a present interest

on what must be in the statement and for

meet the exception described in Life

if the donee has all immediate rights to

definitions and other details on the

estate with power of appointment on

the use, possession, and enjoyment of the

elections, see section 2701 and

page 9.

property and income from the property. A

Regulations section 25.2701-2(c).

You must also file a gift tax return to

gift is considered a future interest if the

The election described in 3 may be

make the QTIP (Qualified Terminable

donee's rights to the use, possession, and

made by attaching a statement to either

Interest Property) election described on

enjoyment of the property and income

a timely or a late filed Form 709 filed by

page 9.

from the property will not begin until some

the recipient of the qualified payment for

future date. Future interests include

Gifts to donees other than your

the year the payment is received. If the

reversions, remainders, and other similar

spouse. You must file a gift tax return if

election is made on a timely filed return,

interests or estates.

you gave gifts to any such donee that are

the taxable event is deemed to occur on

not fully excluded under the $10,000

Note: A contribution to a qualified state

the date the qualified payment is received.

annual exclusion (as described below).

tuition plan on behalf of a designated

If it is made on a late filed return, the

Thus, you must file a gift tax return to

beneficiary is considered a gift of a

taxable event is deemed to occur on the

report any gift of a future interest

present interest.

first day of the month immediately

(regardless of amount) or to report gifts to

A gift to a minor is considered a present

preceding the month in which the return

any donee that total more than $10,000

interest if all of the following conditions

is filed. For information on what must be

for the year.

are met:

in the statement and for definitions and

Gifts to charities. If the only gifts you

1. Both the property and its income

other details on this election, see section

made during the year are deductible as

may be expended by, or for the benefit

2701 and Regulations section

gifts to charities, you do not need to file

of, the minor before the minor reaches

25.2701-4(d).

a return as long as you transferred your

age 21;

All of the elections are revocable only

entire interest in the property to qualifying

2. All remaining property and its

with the consent of the IRS.

charities. If you transferred only a partial

income must pass to the minor on the

interest, or transferred part of your interest

minor's 21st birthday; and

Who Must File

to someone other than a charity, you must

3. If the minor dies before the age of

still file a return.

Only individuals are required to file gift tax

21, the property and its income will be

If you are required to file a return to

returns. If a trust, estate, partnership, or

payable either to the minor's estate or to

report noncharitable gifts and you made

corporation makes a gift, the individual

whomever the minor may appoint under

gifts to charities, you must include all of

beneficiaries, partners, or stockholders

a general power of appointment.

your gifts to charities on the return.

are considered donors and may be liable

The gift of a present interest to more

Gift splitting. You must file a gift tax

for the gift and GST taxes.

than one donee as joint tenants qualifies

return to split gifts (regardless of their

The donor is responsible for paying the

for the annual exclusion for each donee.

amount) with your spouse as described in

gift tax. However, if the donor does not

the Specific Instructions for Part 1 on

Nonresident Aliens

pay the tax, the person receiving the gift

page 4.

may have to pay the tax.

Nonresident aliens are subject to gift and

The term citizen of the United States

If a donor dies before filing a return, the

GST taxes for gifts of tangible property

includes a person who, at the time of

donor's executor must file the return.

situated in the United States. Under

making the gift:

certain circumstances, they are also

A married couple may not file a joint gift

Was domiciled in a possession of the

subject to gift and GST taxes for gifts of

tax return. However, see Split

United States;

intangible property. (See section 2501(a).)

Gifts—Gifts by Husband or Wife to

Was a U.S. citizen; and

Third Parties on page 4.

If you are a nonresident alien who

Became a U.S. citizen for a reason

made a gift subject to gift tax, you must

If a gift is of community property, it is

other than being a citizen of a U.S.

file a gift tax return if: (a) you gave any

considered made one-half by each

possession or being born or residing in a

gifts of future interests; or (b) your gifts

spouse. For example, a gift of $100,000

possession.

of present interests to any donee other

of community property is considered a gift

than your spouse total more than

of $50,000 made by each spouse, and

Annual Exclusion

$10,000; or (c) your outright gifts to your

each spouse must file a gift tax return.

spouse who is not a U.S. citizen total

The first $10,000 of gifts of present

Likewise, each spouse must file a gift

more than $103,000.

interests to each donee during the

tax return if they have made a gift of

calendar year is subtracted from total gifts

property held by them as joint tenants or

When To File

in figuring the amount of taxable gifts. For

tenants by the entirety.

a gift in trust, each beneficiary of the trust

Form 709 is an annual return.

Citizens or Residents of the United

is treated as a separate donee for

Generally, you must file the 2000 Form

purposes of the annual exclusion.

States

709 on or after January 1 but not later

All of the gifts made during the calendar

If you are a citizen or resident of the

than April 16, 2001.

year to a donee are fully excluded under

United States, you must file a gift tax

If the donor died during 2000, the

the annual exclusion if they are all gifts

return (whether or not any tax is ultimately

executor must file the donor's 2000 Form

of present interests and if they total

due) in the following situations:

709 not later than the earlier of (a) the due

$10,000 or less.

Gifts to your spouse. Except as

date (with extensions) for filing the donor's

Note: For gifts made to spouses who are

described below, you do not have to file

estate tax return or (b) April 16, 2001.

not U.S. citizens, the annual exclusion

a gift tax return to report gifts to your

Under this rule, the 2000 Form 709 may

has been increased to $103,000, provided

spouse regardless of the amount of these

be due before April 16, 2001, if the donor

the additional $93,000 gift would

gifts and regardless of whether the gifts

died before July 15, 2000. If the donor

otherwise qualify for the gift tax marital

are present or future interests.

died after July 14, 2000, the due date

deduction (as described in the line 8

You must file a gift tax return if your

(without extensions) is April 16, 2001. If

instructions on page 9).

spouse is not a U.S. citizen and the total

Page 3

Instructions For Form 709 - United States Gift (And Generation-Skipping Transfer) Tax Return - 2000 Page 3

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