Form 709 (2015) Federal Gift Tax Return Checklist
Overview
Form 709 for 2015 reports gifts and generation-skipping transfers made during calendar year 2015. Annual exclusion is $14,000 per donee. The basic exclusion amount is $5,430,000, with an applicable credit of $2,117,800. Gift splitting requires the spouse's signature on line 18.
Critical 2015 Amounts
Annual Exclusion: $14,000 per donee
Non-Citizen Spouse Exclusion: $147,000
Basic Exclusion Amount: $5,430,000
Applicable Credit: $2,117,800
GST Exemption: $5,430,000
Top Tax Rate: 40%
Filing Requirements
File Form 709 if you gave gifts exceeding $14,000 to any one person (other than your spouse) during 2015. File for gifts of future interests regardless of amount. File if you elect to gift split with your spouse, regardless of the gift amounts.
Due Date: April 15, 2016 (or next business day if weekend/holiday)
Extension: Automatic six-month extension via Form 8892 or income tax extension
Where to File: IRS Cincinnati, OH 45999
Transfers Not Subject to Gift Tax
Transfers to political organizations, tuition paid directly to educational institutions, and medical expenses paid directly to providers are not subject to gift tax and should not be reported on Form 709.
Ten-Step Filing Checklist
Step 1: Identify Reportable Gifts
Determine which gifts exceeded $14,000 per donee during 2015. Identify gifts of present interest (immediate rights to use property) versus future interest (rights begin later). Future interests do not qualify for the annual exclusion. Document all gifts requiring reporting.
Step 2: Complete Part 1—General Information
Enter the donor’s name, address, SSN, legal residence, and citizenship (lines 1-7). Verify line 8 to see if the donor passed away in 2015. Mark line 9 if an extension is filed. Enter the total number of donees on line 10. Answer line 11 regarding prior Form 709 filings.
Complete lines 12–18 if you choose to claim gift splitting or DSUE. For gift splitting, the spouse must sign the consent on line 18. Gift splitting requires that you and your spouse were married at the time of the gift, that both of you remained unmarried if divorced/widowed during the year, that both of you were resident aliens, and that your spouse received no general power of appointment.
Step 3: Gather Gift Documentation
For each gift, collect the donee’s name and address, relationship to donor, detailed property description, donor’s adjusted basis, gift completion date, and fair market value on gift date. For securities, include the CUSIP number. For entities, include EIN. For trusts, include the trust's EIN and a copy of the instrument or detailed terms.
If any gift value includes discounts (lack of marketability, minority interest, fractional interest, blockage, etc.), answer “Yes” on Schedule A and attach an explanation with the basis and discount amounts.
Step 4: Complete Schedule A—Computation of Taxable Gifts
Part 1: List regular gifts to non-skip persons in chronological order
Part 2: List direct skips subject to GST tax
Part 3: List indirect skips to trusts
For each gift, complete columns A-H: item number, donee information, basis, date, value, split-gift amount (if applicable), and net transfer value. Part 4 reconciles total gifts minus exclusions and deductions to arrive at taxable gifts.
Step 5: Apply Annual Exclusion
Claim $14,000 annual exclusion per donee for gifts of present interest on Schedule A, Part 4, line 2. No yearly exclusion of future interests. For gift splitting, verify that the combined exclusion of $28,000 ($14,000 per spouse) is calculated correctly.
For non-citizen spouse gifts, the annual exclusion is $147,000, provided the additional amount above $14,000 qualifies for the marital deduction.
Step 6: Report Qualified Tuition Programs (529 Plans)
If you contributed more than $14,000 to a QTP in 2015 for any one person, you may elect to treat up to $70,000 as made ratably over five years. Report one-fifth (20%) each year in Schedule A, Part 1. List the gift date as the calendar year in which it was deemed made. Form 709 is not required in years 2–5 if there are no other reportable gifts.
Step 7: Complete Schedule B—Prior Gifts (if applicable)
If you filed prior Form 709 returns for gifts after 1976, answer “Yes” on line 11a. Complete Schedule B showing the calendar year/quarter, IRS office where filed, applicable credit used, and total taxable gifts for each prior period. Prior gifts reduce available credit for the current year. For gifts made from September 8, 1976, through December 31, 1976, enter 20% of the specific exemption claimed.
Step 8: Report DSUE on Schedule C (if applicable)
If your spouse died after December 31, 2010, and the executor elected DSUE portability on Form 706, complete Schedule C. Enter the deceased spouse’s name, death date, and unused exclusion amount. Calculate applicable credit based on basic exclusion plus DSUE. Attach the first four pages of the spouse’s Form 706, showing the portability election.
Portability must have been elected on a timely and complete Form 706. Indicate on line 19 whether you are applying for DSUE from the predeceased spouse.
Step 9: Report GST Tax on Schedule D (if applicable)
If any gift on Schedule A, Part 2 or Part 3 is subject to GST tax, complete Schedule D. Show each direct skip and indirect skip with value, nontaxable portion, net transfer, GST exemption allocated, inclusion ratio, and GST tax. Reconcile total GST exemption ($5,430,000 for 2015) with amounts allocated to current and prior transfers. Attach the election statement if opting out of automatic allocation for indirect skips.
Direct skip is a transfer subject to gift tax of an interest in property made to a skip person (an individual two or more generations below the donor).
Complete Schedule D, Part 2, to track lifetime GST exemptions: previously allocated, allocated on the current return, and remaining for future transfers.
Step 10: Calculate Tax and Sign Return
Enter the total taxable gifts from Schedule A, Part 4, line 11, on Part 2, line 1. Add prior-period taxable gifts from Schedule B on line 2. Calculate the tentative tax using the gift tax table (18% to 40% rates). Enter the applicable credit ($2,117,800 or the adjusted amount with DSUE) on line 6. Subtract the credit and any foreign gift tax credit to determine the net tax due.
Sign and date Form 709 under penalties of perjury. If the preparer signs, include the preparer's address information. If electing gift splitting, the spouse must sign line 18.
Attach all required documentation: qualified appraisals per Regulations section 301.6501(c)-1(e) and (f), Schedule A calculations, trust instruments, DSUE documentation, and election statements. File a complete return—incomplete returns will not be processed. Do not file multiple Form 709s for the same calendar year.
Adequate Disclosure Requirements
To start the statute of limitations, gifts must be adequately disclosed on Form 709 or an attached statement. Regulations section 301.6501(c)-1(e) and (f) specify requirements.
Adequate disclosure includes a complete Form 709, a detailed property description, and the consideration received. It also consists of the donor-donee identity and relationship, the trust's EIN and terms (if applicable), and either a qualified appraisal or a detailed description of the valuation method.
Special Situations
Nonresident Aliens
Report only gifts of real and tangible property in the United States. Intangible property gifts are excluded unless covered by a treaty.
Joint Tenancy and Joint Accounts
Creating a joint tenancy with right of survivorship results in a gift of half the property's value. A joint bank account creates a gift when the donor withdraws funds for their benefit without an obligation to repay.
Transfer of Life Estates from Spouse
Disposing of a qualified terminable interest received from a spouse (for which marital deduction was elected) triggers gift tax. The entire property value, minus amounts received or retained, is treated as a taxable gift.
Section 2701 Elections
Three elections are available for special valuation of family entity transfers. The first two elections were made on Form 709, which required the transfer to be reported by attaching a statement. The third election was made on Form 709 when a qualified payment was received after a four-year delay.
Penalties
Section 6651 penalties apply for late filing and payment unless reasonable cause is shown. A substantial valuation understatement penalty applies when the reported value is 65% or less of the actual value. The gross valuation understatement penalty applies when the reported value is 40% or less of the actual value.
Return preparers face penalties of $5,000 or 50% of their income (whichever is greater) for understatements resulting from willful or reckless conduct.
Key Reminders
File a separate Form 709 for each calendar year. Both spouses must file individual returns when splitting gifts (exceptions exist). Annual exclusion does not apply to future interests. DSUE requires the executor’s timely election of portability on Form 706. Complete all applicable fields—incomplete returns will not be processed.
Form 709 for 2015 requires accurate reporting, proper valuations, adequate disclosure, and timely filing to ensure compliance and preserve statute of limitations protections.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
