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any) of the life income interest you

Line 15

Because you must complete Schedules

retained after the transfer will be treated

A, B, and C to fill out Part 2, you will find

If you were married to one another for all

as a taxable gift. That portion of the

instructions for these schedules below.

of 2003, check the “Yes” box and skip to

property’s value that is attributable to the

line 17. If you were married for only part

remainder interest is a gift of a future

of the year, check the “No” box and go to

Schedule A—Computation

interest for which no annual exclusion is

line 16. If you were divorced or widowed

allowed. To the extent you made a gift of

after you made the gift, you can not elect

of Taxable Gifts

the life income interest, you may claim an

to split gifts if you remarried before the

annual exclusion, treating the person to

Do not enter on Schedule A any gift or

end of 2003.

whom you transferred the interest as the

part of a gift that qualifies for the political

Line 16

donee for purposes of computing the

organization, educational, or medical

annual exclusion.

Check the box that explains the change in

exclusions. In the instructions below,

your marital status during the year and

“gifts” means gifts (or parts of gifts) that

give the date you were married, divorced,

do not qualify for the political

or widowed.

organization, educational, or medical

Specific Instructions

exclusions.

Consent of Spouse

Line A— Valuation Discounts

Part 1—General

Your spouse must sign the consent for

your gift-splitting election to be valid. The

If the value of any gift you report in either

Information

consent may generally be signed at any

Part 1, Part 2, or Part 3 of Schedule A

time after the end of the calendar year.

reflects a discount for lack of

Lines 12–18. Split Gifts

However, there are two exceptions:

marketability, a minority interest, a

A married couple may not file a joint gift

fractional interest in real estate, blockage,

1. The consent may not be signed

tax return.

market absorption, or for any other

after April 15 following the end of the year

However, if after reading the

reason, answer “Yes” to the question at

in which the gift was made. (But, if neither

the top of Schedule A. Also, attach an

instructions below, you and your spouse

you nor your spouse has filed a gift tax

explanation giving the factual basis for the

agree to split your gifts, you should file

return for the year on or before that date,

both of your individual gift tax returns

claimed discounts and the amount of the

the consent must be made on the first gift

discounts taken.

together (i.e., in the same envelope) to

tax return for the year filed by either of

help the IRS process the returns and to

you.)

Line B—Qualified Tuition

avoid correspondence from the IRS.

2. The consent may not be signed

Programs

after a notice of deficiency for the gift tax

If you and your spouse agree, all gifts

for the year has been sent to either you or

If your total 2003 contributions to a

(including gifts of property held with your

your spouse.

qualified tuition program on behalf of any

spouse as joint tenants or tenants by the

individual beneficiary exceed $11,000,

entirety) either of you make to third

The executor for a deceased spouse

then for purposes of the annual exclusion

parties during the calendar year will be

or the guardian for a legally incompetent

you may elect under section 529(c)(2)(B)

considered as made one-half by each of

spouse may sign the consent.

to treat up to $55,000 of your total

you if:

•

When the Consenting Spouse Must

contributions as having been made

You and your spouse were married to

Also File a Gift Tax Return

ratably over a 5-year period beginning in

one another at the time of the gift;

•

2003.

If divorced or widowed after the gift,

In general, if you and your spouse elect

you did not remarry during the rest of the

gift splitting, then both spouses must file

You must report in 2003 the entire

calendar year;

his or her own, individual, gift tax return.

amount of the contribution in excess of

•

Neither of you was a nonresident alien

$55,000.

However, only one spouse must file a

at the time of the gift; and

return if all the requirements of either

•

You make the election by checking the

You did not give your spouse a general

Exception 1 or 2 below are met.

box on line B at the top of Schedule A.

power of appointment over the property

Exception 1. During the calendar year:

The election must be made for the

interest transferred.

•

Only one spouse made any gifts;

calendar year in which the contribution is

If you transferred property partly to

•

The total value of these gifts to each

made. Also attach an explanation that

your spouse and partly to third parties,

third-party donee does not exceed

includes the following:

you can only split the gifts if the interest

•

$22,000; and

The total amount contributed per

transferred to the third parties is

•

All of the gifts were of present interests.

individual beneficiary;

ascertainable at the time of the gift.

•

The amount for which the election is

Exception 2. During the calendar year:

The consent is effective for the entire

•

being made; and

Only one spouse (the donor spouse)

calendar year; therefore, all gifts made by

•

The name of the individual for whom

made gifts of more than $11,000 but not

both you and your spouse to third parties

the contribution was made.

more than $22,000 to any third-party

during the calendar year (while you were

If you make this election, report only

donee;

married) must be split.

•

(20%) of your total contributions (up to

The only gifts made by the other

If the consent is effective, the liability

$55,000) on the 2003 Form 709. You

spouse (the consenting spouse) were

for the entire gift tax of each spouse is

must then report an additional 20% of the

gifts of not more than $11,000 to

joint and several.

total in each of the succeeding 4 years. If

third-party donees other than those to

you are electing gift splitting for the

If you meet these requirements and

whom the donor spouse made gifts; and

•

contributions, apply the gift-splitting rules

want your gifts to be considered made

All of the gifts by both spouses were of

before applying these rules. In this case,

one-half by you and one-half by your

present interests.

both spouses must make the section

spouse, check the “Yes” box on line 12,

If either Exception 1 or 2 is met, only

529(c)(2)(B) election on their respective

page 1; complete lines 13 through 17;

the donor spouse must file a return and

returns.

and have your spouse sign the

the consenting spouse signifies consent

consent on line 18.

on that return.

If, in any of the 4 years following the

If you are not married or do not wish to

Specific instructions for Part 2 — Tax

election, you are not required to file Form

split gifts, skip to Schedule A.

Computation are continued on page 12.

709 other than to report that year’s

-5-

Instructions For Form 709 - United States Gift (And Generation-Skipping Transfer) Tax Return - 2003 Page 5

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