Form 709 2022 Printable, Fillable PDF – Transfers of assets that may be subject to the federal gift tax and some generation-skipping transfer taxes are reported on IRS Form 709, which is available online. It is necessary to complete this form to record any taxable gifts you make to others during your lifetime, including donations of cash or tangible physical assets like real estate. Similarly, when transferring property to a beneficiary (other than a spouse) who is at least 3712 years younger than the donor, it is utilized to award lifelong generation-skipping tax exemptions to the recipient.
In the year in which you make a taxable gift, Form 709 should be submitted with your tax return. However, submitting this form does not always imply that you will incur gift or generation-skipping transfer tax. (The generation-skipping transfer tax is an extra tax levied on a transfer of property that occurs within a generational gap, often known as a generation-skipping transfer.)
- Form 709 is used to record taxable gifts and allocations of lifetime exemptions under the generation-skipping tax.
- Certain forms of financial donations may be eligible for exemptions from the gift tax under certain circumstances.
- The generation-skipping tax guarantees that the correct amount of estate tax is paid when assets are transferred among family members via the use of a generation-skipping trust.
- Each year you make a taxable gift, you must submit Form 709, which must be included with your normal income tax return.
The Form 709, United States Gift (And Generation-Skipping Transfer) Tax Return, Is Available To Anybody Who Meets The Eligibility Requirements
When you make a monetary gift to someone else, the responsibility for paying any gift taxes payable falls on you, not the person who receives the present. Gifts of cash, property, or other assets to someone during a tax year need to be reported on Form 709, which may be found on the Internal Revenue Service’s website.
A gift is defined as follows for the purposes of IRS reporting:
“Any transfer to an individual, whether directly or indirectly, in which full consideration (measured in money or money’s worth) is not received in return.” “Any transfer to an individual, whether directly or indirectly, in which full consideration (measured in money or money’s worth) is not received in return.”
The following are examples of situations in which taxable gifts may be considered:
- Making a gift of down payment money to an adult child in order to assist them in the purchase of their first house
- Gifts of money are provided directly to a student to assist them in paying for school.
- Real estate or other types of property that you offer as a gift to someone.
- Amounts placed into a 529 college savings account on your behalf or on behalf of a recipient other than yourself or your spouse.
- Forgiving debts that you have owed to others is a good thing.
In other cases, cash donations are not subject to the gift tax, such as in the case of charitable contributions. These are some examples:
- Giving gifts to those who are within the yearly exclusion limit
- Gifts for your spouse are always appreciated.
- You pay for someone else’s tuition or medical expenses rather than your own.
- Gifts made to a political organization for the organization’s use
The yearly exclusion limit for 2021 is $15,000 (increasing to $16,000 for 2022); this limit doubles to $30,000 for married couples who file a joint return (rising to $32,000 for 2022); this limit doubles to $30,000 for married couples who file a joint return (rising to $32,000 for 2022).
For example, if you are married and have three children, you and your spouse might jointly give each of them up to $30,000 per year without exceeding the exclusion limit. This is referred to as “gift splitting,” and it is only permitted if you and your spouse file a joint tax return with the IRS.
Tuition and medical expense gifts must be sent directly to the biller in order to prevent the gift tax being levied on them. Suppose you wish to assist a grandchild with college fees. You’d have to make tuition payments directly to the institution in question. If, on the other hand, you were to give your grandchild the money to pay for their college tuition, it would come under the category of a taxable gift. A similar situation exists when it comes to making payments on healthcare bills. In order to minimize gift tax consequences, you would need to pay the healthcare provider directly.
Information On How To Complete Form 709, United States Gift (And Generation-Skipping Transfer) Tax Return
If you make a taxable gift during a tax year, you must submit Form 709 for that year unless you qualify for one of the previously specified exemptions. Form 709 may be found on the IRS website. Unless you submit your tax returns electronically using online tax preparation software, you will not be able to complete this form online. Form 709 must be printed and sent to the Internal Revenue Service; it is one of just a few tax forms that cannot be e-filed. 2
The form itself is a five-page document divided into parts that cover the following topics:
- Information about the individual
- Please include specifics about any financial contributions you have made.
- Specifics on generation-skipping transfers are included in this section.
Form 709 Is A Legal Document
Form 709 is used to file an annual tax return. Form 709, as well as the remainder of your tax return, is required by the deadline for submitting your yearly tax return. The yearly filing date is April 15 for the majority of tax years. In general, you must submit Form 709 no later than April 15 of the year after the year in which the gift was made, but no sooner than January 1.
If you believe you will need more time to complete your tax return, you may apply for a tax extension. If you file an extension, you will have until October 15 to complete your tax return. Form 8892, Request for a Six-Month Extension of Time to File Form 709, must be completed and sent to the IRS. Remember that this form is solely for submitting extensions for gift tax or generation-skipping tax returns, not for any other types of tax returns. IRS Form 4868.5 would also be required if you need an extension to submit the remainder of your tax return after filing IRS Form 4868.
Form 709, United States Gift (And Generation-Skipping Transfer) Tax Return, Is Available For Download Here
The IRS website provides access to Form 709, which may be downloaded. To report gift taxes and generation-skipping tax exemptions, you may use this form, which is free to download and use when completing your tax return. It is possible that you will not need to complete all parts of the form, despite the fact that it is five pages long, depending on what information you are reporting for the year.
If you are new to tax rules, completing and submitting Form 709 may be a complex process. You should speak with a tax expert before finishing your return to avoid making a costly mistake.