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Transfers Not Subject to the

return (whether or not any tax is ultimately

gifts to charities, you must include all of

due) in the following situations.

your gifts to charities on the return.

Gift Tax

If you gave gifts to someone in 2017

Transfers Subject to the Gift

Four types of transfers are not subject to

totaling more than $14,000 (other than to

Tax

the gift tax. These are:

your spouse), you probably must file Form

Transfers to political organizations,

709. But see Transfers Not Subject to Gift

Generally, the federal gift tax applies to

Transfers to certain exempt

Tax and Gifts to Your Spouse, later, for

any transfer by gift of real or personal

organizations,

more information on specific gifts that are

property, whether tangible or intangible,

Payments that qualify for the

not taxable.

that you made directly or indirectly, in

educational exclusion, and

Certain gifts, called future interests, are

trust, or by any other means.

Payments that qualify for the medical

not subject to the $14,000 annual

The gift tax applies not only to the free

exclusion.

exclusion and you must file Form 709

transfer of any kind of property, but also to

These transfers are not “gifts” as that term

even if the gift was under $14,000. See

sales or exchanges, not made in the

is used on Form 709 and its instructions.

Annual Exclusion, later.

You need not file a Form 709 to report

ordinary course of business, where value

Spouses may not file a joint gift tax

of the money (or property) received is less

these transfers and should not list them on

return. Each individual is responsible for

than the value of what is sold or

Schedule A of Form 709 if you do file

his or her own Form 709.

exchanged. The gift tax is in addition to

Form 709.

You must file a gift tax return to split

any other tax, such as federal income tax,

gifts with your spouse (regardless of their

Political organizations. The gift tax

paid or due on the transfer.

amount) as described in Part 1—General

does not apply to a transfer to a political

Information.

organization (defined in section 527(e)(1))

The exercise or release of a general

If a gift is of community property, it is

for the use of the organization.

power of appointment may be a gift by the

considered made one-half by each

individual possessing the power. General

Certain exempt organizations. The gift

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

powers of appointment are those in which

tax does not apply to a transfer to any civic

community property is considered a gift of

the holders of the power can appoint the

league or other organization described in

$50,000 made by each spouse, and each

property under the power to themselves,

section 501(c)(4), any labor, agricultural,

spouse must file a gift tax return.

their creditors, their estates, or the

or horticultural organization described in

Likewise, each spouse must file a gift

creditors of their estates. To qualify as a

section 501(c)(5), or any business league

tax return if they have made a gift of

power of appointment, it must be created

or other organization described in section

property held by them as joint tenants or

by someone other than the holder of the

501(c)(6) for the use of such organization,

tenants by the entirety.

power.

provided that such organization is exempt

Only individuals are required to file gift

from tax under section 501(a).

The gift tax also may apply to forgiving

tax returns. If a trust, estate, partnership,

a debt, to making an interest-free or below

or corporation makes a gift, the individual

Educational exclusion. The gift tax

market interest rate loan, to transferring

beneficiaries, partners, or stockholders

does not apply to an amount you paid on

the benefits of an insurance policy, to

are considered donors and may be liable

behalf of an individual to a qualifying

certain property settlements in divorce

for the gift and GST taxes.

domestic or foreign educational

cases, and to giving up of some amount of

The donor is responsible for paying the

organization as tuition for the education or

annuity in exchange for the creation of a

gift tax. However, if the donor does not

training of the individual. A qualifying

survivor annuity.

pay the tax, the person receiving the gift

educational organization is one that

may have to pay the tax.

normally maintains a regular faculty and

Bonds that are exempt from federal

If a donor dies before filing a return, the

curriculum and normally has a regularly

income taxes are not exempt from federal

donor's executor must file the return.

enrolled body of pupils or students in

gift taxes.

attendance at the place where its

Who does not need to file. If you meet

Sections 2701 and 2702 provide rules

educational activities are regularly carried

all of the following requirements, you are

for determining whether certain transfers

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

not required to file Form 709.

to a family member of interests in

regulations.

You made no gifts during the year to

corporations, partnerships, and trusts are

your spouse.

The payment must be made directly to

gifts. The rules of section 2704 determine

You did not give more than $14,000 to

the qualifying educational organization

whether the lapse of any voting or

any one donee.

and it must be for tuition. No educational

liquidation right is a gift.

All the gifts you made were of present

exclusion is allowed for amounts paid for

interests.

Gifts to your spouse. You must file a gift

books, supplies, room and board, or other

tax return if you made any gift to your

similar expenses that are not direct tuition

Gifts to charities. If the only gifts you

spouse of a terminable interest that does

costs. To the extent that the payment to

made during the year are deductible as

not meet the exception described in Life

the educational organization was for

gifts to charities, you do not need to file a

estate with power of appointment, or if

something other than tuition, it is a gift to

return as long as you transferred your

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

the individual for whose benefit it was

entire interest in the property to qualifying

total gifts you made to your spouse during

made, and may be offset by the annual

charities. If you transferred only a partial

the year exceed $149,000.

exclusion if it is otherwise available.

interest, or transferred part of your interest

You also must file a gift tax return to

Contributions to a qualified tuition

to someone other than a charity, you must

make the Qualified Terminable Interest

program (QTP) on behalf of a designated

still file a return and report all of your gifts

Property (QTIP) election described under

beneficiary do not qualify for the

to charities.

Line 12. Election Out of QTIP Treatment of

educational exclusion. See Line

Annuities.

B—Qualified Tuition Programs (529 Plans

Note. See Pub. 526, Charitable

or Programs) in the instructions for

Contributions for more information on

Except as described earlier, you do not

Schedule A, later.

identifying a qualified charity.

have to file a gift tax return to report gifts to

your spouse regardless of the amount of

If you are required to file a return to

Medical exclusion. The gift tax does not

these gifts and regardless of whether the

report noncharitable gifts and you made

apply to an amount you paid on behalf of

gifts are present or future interests.

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Instructions For Form 709 - United States Gift (And Generation-Skipping Transfer) Tax Return - 2017 Page 2

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