Instructions For Form 709 - 2016 (Page 5 of 19) in pdf

Express 12:00, and DHL Import Express

reasonable cause criteria. Do not attach

will be subject to the gift tax (and GST tax,

Worldwide.

an explanation when you file Form 709.

if applicable) if you dispose of all or part of

your life income interest (by gift, sale, or

There are also penalties for willful

The private delivery service can tell you

otherwise).

failure to file a return on time, willful

how to get written proof of the mailing

attempt to evade or defeat payment of tax,

Generally, the entire value of the

date.

and valuation understatements that cause

property transferred less:

an underpayment of the tax. A substantial

Where To File

1. The amount you received (if any)

valuation understatement occurs when the

for the life income interest, and

reported value of property entered on

File Form 709 at the following address.

Form 709 is 65% or less of the actual

2. The amount (if any) determined

Department of the Treasury

value of the property. A gross valuation

after the application of section 2702,

Internal Revenue Service Center

understatement occurs when the reported

valuing certain retained interests at zero,

Cincinnati, OH 45999

value listed on the Form 709 is 40% or

for the life income interest you retained

less of the actual value of the property.

after the transfer, will be treated as a

taxable gift.

If submitting Form 709 by private

Return preparer. Penalties may also be

delivery service (discussed earlier), mail

applied to tax return preparers, including

That portion of the property's value that

to:

gift tax return preparers.

is attributable to the remainder interest is a

gift of a future interest for which no annual

The Small Business and Work

Internal Revenue Service

exclusion is allowed. To the extent you

Opportunity Tax Act of 2007 extended

201 West Rivercenter Boulevard

made a gift of the life income interest, you

section 6694 income tax return preparer

Covington, KY 41011

may claim an annual exclusion, treating

penalties to all tax return preparers,

the person to whom you transferred the

including gift tax return preparers. Now,

See the Caution under Lines 12–

interest as the donee for purposes of

gift tax return preparers who prepare any

18. Split Gifts, later, before you

TIP

figuring the annual exclusion.

return or claim for refund with an

mail the return.

understatement of tax liability due to willful

Specific Instructions

or reckless conduct can be penalized

Adequate Disclosure

$5,000 or 75% of the income received (or

income to be received), whichever is

Part 1—General

To begin the running of the statute

greater, for each return. See section 6694,

of limitations for a gift, the gift

Information

its regulations, and Ann. 2009-15,

must be adequately disclosed on

2009-11 I.R.B. 687, available at

CAUTION

Form 709 (or an attached statement) filed

Lines 4 and 6. Address. Enter your

for

for the year of the gift.

current mailing address.

more information.

In general, a gift will be considered

Foreign address. If your address is

Joint Tenancy

adequately disclosed if the return or

outside of the United States or its

statement includes the following.

possessions or territories, enter the

If you buy property with your own funds

A full and complete Form 709.

information as follows: city, province or

and the title to the property is held by you

A description of the transferred property

and a donee as joint tenants with right of

state, and name of country. Follow the

and any consideration received by the

survivorship and if either you or the donee

country's practice for entering the postal

donor.

may give up those rights by severing your

code. Do not abbreviate the country

The identity of, and relationship

name.

interest, you have made a gift to the donee

between, the donor and each donee.

in the amount of half the value of the

Line 5. Legal residence (domicile). In

If the property is transferred in trust, the

property.

general, your legal residence (also known

trust's employer identification number

If you create a joint bank account for

as your domicile) is acquired by living in a

(EIN) and a brief description of the terms

yourself and a donee (or a similar kind of

place, for even a brief period of time, with

of the trust (or a copy of the trust

ownership by which you can get back the

no definite present intention of moving

instrument in lieu of the description).

entire fund without the donee's consent),

from that place.

Either a qualified appraisal or a detailed

you have made a gift to the donee when

Enter the state of the United States

description of the method used to

the donee draws on the account for his or

(including the District of Columbia) or a

determine the fair market value of the gift.

her own benefit. The amount of the gift is

foreign country in which you legally reside

the amount that the donee took out

See Regulations section

or are domiciled at the time of the gift.

without any obligation to repay you.

301.6501(c)-1(e) and (f) for details,

Line 7. Citizenship. Enter your

including what constitutes a qualified

If you buy a U.S. savings bond

citizenship.

appraisal, the information required if no

registered as payable to yourself or a

The term citizen of the United States

appraisal is provided, and the information

donee, there is a gift to the donee when he

includes a person who, at the time of

required for transfers under sections 2701

or she cashes the bond without any

making the gift:

and 2702.

obligation to account to you.

Was domiciled in a possession of the

Penalties

Transfer of Certain Life

United States,

Was a U.S. citizen, and

Estates Received From

Late filing and late payment. Section

Became a U.S. citizen for a reason

Spouse

6651 imposes penalties for both late filing

other than being a citizen of a U.S.

and late payment, unless there is

possession or being born or residing in a

If you received a qualified terminable

reasonable cause for the delay.

possession.

interest (see Line 12. Election Out of QTIP

Reasonable cause determinations. If

Treatment of Annuities in the instructions

A nonresident not a citizen of the

United States includes a person who, at

you receive a notice about penalties after

for Schedule A, later) from your spouse for

you file Form 709, send an explanation

which a marital deduction was elected on

the time of making the gift:

and we will determine if you meet

your spouse's estate or gift tax return, you

-5-

Instructions For Form 709 - 2016 Page 5

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