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The principal amount of each bond;

which the item is most commonly sold to

If the gift was made by means of a

the public. The location of the item must

trust, attach a certified or verified copy of

Name of obligor;

be taken into account wherever

the trust instrument to the return on which

Date of maturity;

appropriate.

you report your first transfer to the trust.

Rate of interest;

However, to report subsequent transfers

The fair market value of a stock or bond

Date or dates when interest is payable;

to the trust, you may attach a brief

(whether listed or unlisted) is the mean

Series number if there is more than one

description of the terms of the trust or a

between the highest and lowest selling

issue;

copy of the trust instrument.

prices quoted on the valuation date. If

Exchanges where listed or, if unlisted,

only the closing selling prices are

Also attach any appraisal used to

give the location of the principal business

available, then the fair market value is the

determine the value of real estate or other

office of the corporation; and

mean between the quoted closing selling

property.

price on the valuation date and on the

CUSIP number. The CUSIP number is

If you do not attach this information,

trading day before the valuation date. To

a nine-digit number assigned by the

you must include in Schedule A full

figure the fair market value if there were

American Banking Association to traded

information to explain how the value was

no sales on the valuation date, see the

securities.

determined.

instructions for Schedule B of Form 706.

For stocks:

Part 2—Gifts That are Direct Skips

Stock of close corporations or inactive

Give number of shares;

and are Subject to Both Gift Tax

stock must be valued on the basis of net

State whether common or preferred;

and Generation-Skipping Transfer

worth, earnings, earning and dividend

If preferred, give the issue, par value,

capacity, and other relevant factors.

Tax

quotation at which returned, and exact

Generally, the best indication of the

List in Part 2 only those gifts that are

name of corporation;

value of real property is the price paid for

subject to both the gift and GST taxes.

If unlisted on a principal exchange, give

the property in an arm's-length transaction

You must list the gifts in Part 2 in the

location of principal business office of

on or before the valuation date. If there

chronological order that you made

corporation, state in which incorporated,

has been no such transaction, use the

them. Number, describe, and value the

and date of incorporation;

comparable sales method. In comparing

gifts as described in the instructions for

If listed, give principal exchange; and

similar properties, consider differences in

Part 1 on page 7.

the date of the sale, and the size,

CUSIP number. The CUSIP number is

If you made a gift in trust, list the entire

condition, and location of the properties,

a nine-digit number assigned by the

gift as one line entry in Part 2. Enter the

and make all appropriate adjustments.

American Banking Association to traded

entire value of the property transferred to

securities.

The value of all annuities, life estates,

the trust even if the trust has nonskip

terms for years, remainders, or reversions

For interests in property based on the

person future beneficiaries.

is generally the present value on the date

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

How to report GST transfers after the

of the gift.

birth of the person.

close of an ETIP. If you are reporting a

Sections 2701 and 2702 provide

For life insurance policies, give the

generation-skipping transfer that was

special valuation rules to determine the

name of the insurer and the policy

subject to an “estate tax inclusion period”

amount of the gift when a donor transfers

number.

(ETIP) (provided the ETIP closed as a

an equity interest in a corporation or

result of something other than the death

Clearly identify in the description

partnership (section 2701) or makes a gift

of the transferor—see Form 706), and you

column which gifts create the opening of

in trust (section 2702). The rules only

are also reporting gifts made during the

an estate tax inclusion period (ETIP) as

apply if, immediately after the transfer, the

year, complete Schedule A as you

described under Transfers Subject to an

donor (or an applicable family member)

normally would with the following

“Estate Tax Inclusion Period” on page

holds an applicable retained interest in the

changes:

2. Describe the interest that is creating the

corporation or partnership, or retains an

ETIP. You may not allocate the GST

Report the transfer subject to an ETIP

interest in the trust. For details, see

exemption to these transfers until the

on Schedule A, Part 2.

sections 2701 and 2702, and their

close of the ETIP. See the instructions for

1. Column B. In addition to the

regulations.

Schedule C on page 10.

information already requested, describe

Supplemental Documents

the interest that is closing the ETIP;

Donor's Adjusted Basis of Gifts

explain what caused the interest to

To support the value of your gifts, you

Show the basis you would use for income

terminate; and list the year the gift portion

must provide information showing how it

tax purposes if the gift were sold or

of the transfer was reported and its item

was determined.

exchanged. Generally, this means cost

number on Schedule A of the Form 709

For stock of close corporations or

plus improvements, less applicable

that was originally filed to report the gift

inactive stock, attach balance sheets,

depreciation, amortization, and depletion.

portion of the ETIP transfer.

particularly the one nearest the date of the

For more information on adjusted basis,

2. Column D. Give the date the ETIP

gift, and statements of net earnings or

see Pub. 551, Basis of Assets.

closed rather than the date of the initial

operating results and dividends paid for

gift.

Date and Value of Gift

each of the 5 preceding years.

3. Column E. Enter “N/A” in Column

For each life insurance policy, attach

The value of a gift is the fair market value

Form 712, Life Insurance Statement.

of the property on the date the gift is

The value is entered only in Column B,

Note for single premium or paid-up

made. The fair market value is the price

Part 1, Schedule C. See the instructions

policies: In certain situations, for

at which the property would change hands

for Schedule C.

example, where the surrender value of the

between a willing buyer and a willing

policy exceeds its replacement cost, the

seller, when neither is forced to buy or to

Part 3—Taxable Gift Reconciliation

true economic value of the policy will be

sell, and when both have reasonable

If you have made no gifts yourself and are

greater than the amount shown on line 59

knowledge of all relevant facts. Fair

filing this return only to report gifts made

of Form 712. In these situations, report

market value may not be determined by

by your spouse but which are being split

the full economic value of the policy on

a forced sale price, nor by the sale price

with you, skip lines 1–3 and enter your

Schedule A. See Rev. Rul. 78-137,

of the item in a market other than that in

share of the split gifts on line 4.

1978-1 C.B. 280 for details.

Page 8

Instructions For Form 709 - United States Gift (And Generation-Skipping Transfer) Tax Return - 2000 Page 8

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