IRS Form 709: What to Know

What is the Form 709

The Form 709: United States Gift (and Generation-Skipping Transfer) Tax Return allows you to report the transfer of assets that may be subject to federal gift tax and other specific generation-skipping transfer taxes, during your lifetime. File this form with your regular tax returns for any years in which you give a charitable gift exceeding a certain amount. But remember that filing this form does not automatically mean that you owe gift or generation-skipping transfer tax.

Assets that are included on Form 709 can include cash as well as physical assets like real estate. This form is also used to allocate generation-skipping tax exemptions when transferring property to someone who is not related to you by blood, marriage, or adoption, and who is at least 37.5 years younger than you.

Who must file Form 709?

As the person who made a financial gift to someone, you – not the recipient – are responsible for filing the correct form with your annual taxes and are also responsible for paying any necessary tax. This form must be filled out and filed whenever the total value of the gifts you give to an individual exceeds $16,000, as of 2022. But you might be asking yourself, “What qualifies as a gift?”

What is considered a gift?

Per the IRS, a gift is: “Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money’s worth) is not received in return.” Examples of taxable gifts may include:

• Funds for an adult child to use as a down payment on a home
• Cash given to students to help pay for school
• Real estate or other property
• Funds deposited into a college saving account
• Forgiveness of a loan you made to someone else

What Gifts are Exempt

Of course, some gifts are exempt from the gift tax. Gifts that may not be subject to a gift tax can include:

• Gifts that fall within the annual exclusion limit (for 2022 the annual exclusion limit is $16,000 or $32,000 for married couples filing jointly)
• Gifts to your spouse who is a U.S. resident
• Tuition or medical expenses you pay on behalf of someone else (these must be paid directly to the institution for the funds to be exempt)
• Gifts to political organizations or charities

If you are unsure about whether you’ll need to file a Form 709 with your taxes during tax season, contact the office.

^{This material was developed and prepared by a third party for use by your Registered Representative. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. The content is developed from sources believed to be providing accurate information.}

^{This piece is designed to provide accurate and authoritative information on the subjects covered. It is not, however, intended to provide specific legal, tax, or other professional advice. For specific professional assistance, the services of an appropriate professional should be sought.}