Form 709 Checklist for Tax Year 2020
Year Audit Result
Form 709 for 2020 reflects the post-TCJA exemption levels before any consideration for sunsetting. No EIP/ACA/ARPA/ARPA expansions apply to this form type. The 2020 form focuses solely on gift tax and GST tax reporting; economic stimulus and healthcare-related credits do not intersect with 709 requirements.
The basic exclusion amount for 2020 is $11,580,000, reflecting inflation adjustments to the TCJA framework enacted in 2017. The annual exclusion per donee remains $15,000 for gifts to U.S. citizens and residents, and $157,000 for gifts to non-U.S. citizen spouses. The generation-skipping transfer tax exemption equals $11,580,000 for 2020, matching the gift and estate tax basic exclusion amount. No form redesigns or structural changes were made to the 2020 Form 709 compared to the 2019 version.
Form-Specific Audit Result
Form 709 allows for the following: unified transfer tax credit (basic exclusion amount of $11,580,000 for 2020); marital deduction for gifts to U.S. citizen spouses; annual exclusion of $15,000 per donee (or $157,000 to a non-U.S. citizen spouse); charitable deduction; medical/educational payment exclusion; and GST exemption allocation.
Form 709 prohibits: joint filing (each spouse files separately); use by corporations, partnerships, trusts, or estates (individual transferor only files); nonresident aliens file Form 709 for U.S.-situs property until Form 709-NA becomes available.
Required schedules: A (gifts), B (prior gifts), C (Deceased Spousal Unused Exclusion), D (GST computation). For 2020, the portability of the deceased spousal unused exclusion (DSUE) remains in effect under rules established by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which was made permanent by the American Taxpayer Relief Act of 2012.
Ten-Step Compliance Checklist
1. Verify Filing Requirement
You must file Form 709 if (a) you made gifts of present interest exceeding $15,000 to any single donee in calendar year 2020, or (b) you made any gifts of future interest regardless of amount, or (c) you are a U.S. citizen/resident and made gifts to a spouse who is not a U.S. citizen totaling more than $157,000, or (d) you are splitting gifts with your spouse. If none of the above apply, filing is optional.
For 2020, direct payment of tuition to educational institutions or medical expenses to providers qualifies for unlimited exclusion and does not require reporting. Filing is also required if you elect to split gifts with your spouse, even if your individual gifts did not exceed the annual exclusion per donee.
2. Confirm Donor Eligibility
Only U.S. citizens and residents file Form 709 for 2020. According to the IRS FAQ, non-residents who are not citizens file Form 709, not Form 709-A. Form 709-NA was under development and had not been published as of the materials provided; nonresidents continued to file Form 709 until 709-NA became available.
Corporations, partnerships, trusts, and estates do not file; the individual transferor files 709. For 2020, sole proprietors, general partners, LLC members, and S-corporation shareholders cannot file Form 709 for business gifts; the individual (not the entity) files the Form 709 only if personal funds or personal property are transferred directly to them.
3. Document All 2020 Gifts
Gather the date of the gift transfer, recipient name and relationship, property description, fair market value at the transfer date (not the appraisal date unless the property requires formal valuation), consideration received (if any), and the donor’s adjusted basis. For gifts of interests in entities, partnerships, or closely held corporations, obtain entity documentation and basis records.
For gifts of fractional interests in real estate or businesses, document valuation discounts for lack of marketability or minority interest. Maintain contemporaneous written records of gift date, donor intent, and transfer completion. For gifts requiring a qualified appraisal (property valued over $5,000), obtain the appraisal within 60 days before or after the transfer date.
4. Calculate Per-Donee Taxable Gifts
For each recipient: sum all gifts (present and future interest) made during the calendar year 2020. Subtract $15,000 annual exclusion (or $157,000 if spouse is not a U.S. citizen). Subtract marital deduction if applicable. The result is the total amount of taxable gifts made to that donee.
Gifts of present interest only: if the total per donee is $15,000 or less, the annual exclusion applies; if it exceeds $15,000, all gifts must be reported. For 2020, gifts of future interests do not qualify for the annual exclusion, regardless of the amount.
Gifts in trust may be eligible for present interest treatment if beneficiaries have immediate withdrawal rights (Crummey powers). Marital deduction is unlimited for gifts to U.S. citizen spouses; gifts to non-U.S. citizen spouses qualify only up to $157,000 annual exclusion.
5. Determine Gift-Splitting Election
If gift splitting is elected and all conditions are met, generally, both spouses file separate returns and are jointly liable. However, according to the 2020 instructions, there are exceptions: if only one spouse made gifts under specified conditions (gifts of present interest not exceeding double the annual exclusion), only the donor spouse must file a return with the spouse’s consent on line 18.
If splitting: (a) you and your spouse are jointly liable for gift tax; (b) each spouse who made gifts must file a separate 709; (c) spouse must sign line 18 consent. If no, each spouse reports only their own gifts. Gift splitting permits each spouse to use their $15,000 annual exclusion, effectively doubling the exclusion to $30,000 per donee. Both spouses must consent to splitting all gifts made by either spouse during the 2020 calendar year; partial gift splitting is not permitted.
6. Complete Part 1 (General Information)
Provide: donor name, SSN, current address, citizenship status, date of death (if applicable during 2020), and prior 709 filing history. Lines 12–18: if splitting gifts with spouse, complete spouse name, SSN, marriage dates, and prior filing status of spouse. A spouse’s signature on line 18 is required for a gift-splitting election to be valid.
Due date: April 15, 2021 (or extended date if Form 8892 filed). For 2020, if the donor died during the calendar year, the return is due no later than the earlier of (a) April 15, 2021, or (b) the due date (including extensions) for filing the donor’s estate tax return (Form 706). Executors or administrators may file on behalf of deceased donors.
7. List All Gifts on Schedule A
Complete Schedule A, Parts 1, 2, or 3 as applicable: Part 1 (gifts subject only to gift tax, including outright gifts and gifts to non-skip trusts); Part 2 (direct skips—gifts to skip persons); Part 3 (indirect skips—gifts to trusts including skip persons).
For each gift: column A (donee name/ID), column B (description of property), column C (date of gift), column D (donor adjusted basis), column E (fair market value at date of gift), column F (deductions or exclusions applied), column G (taxable amount).
Separate row for each distinct gift per donee. For 2020, provide detailed property descriptions, including CUSIP numbers for securities, legal descriptions for real estate, and EINs for entity interests. Attach a qualified appraisal for gifts of property valued over $5,000.
8. Complete Schedule B (Gifts From Prior Periods)
Report all taxable gifts made from 1976 through 2019: year, amount of taxable gifts, and tax paid for each year. This establishes the cumulative taxable gifts baseline for the 2020 computation. If no prior gifts, leave blank or mark “None.”
For 2020, Schedule B requires reconciliation of all taxable gifts made in previous years, including gifts made before 1977 for which a specific exemption was claimed. Accurate reporting of prior-period gifts is crucial for determining the correct tax liability under the unified transfer tax system. Include gifts reported on all prior Forms 709, adjusting for any IRS adjustments or audit changes.
9. Complete Schedule C and Schedule D if Applicable
Schedule C (DSUE): If your deceased spouse (who died after December 31, 2010) did not use the full applicable exclusion amount and the executor elected portability on the spouse’s estate return (Form 706), enter the available Deceased Spousal Unused Exclusion on line 5 for use in the 2020 gift computation.
Schedule D (GST): If any gift reported on Schedule A, Part 2 or 3 is subject to generation-skipping transfer tax, allocate available GST exemption ($11,580,000 for 2020).
For direct skips, GST exemption is automatically allocated unless you elect out; for indirect skips (trusts), GST exemption is automatically allocated to “GST trusts” unless an election out is in place. For 2020, DSUE is portable only from the most recently deceased spouse; remarriage to a new spouse who subsequently dies replaces any prior DSUE with the new spouse’s unused exclusion.
10. Compute Tax, Obtain Signatures, and Assemble
Part 2 (Tax Computation): Add 2020 taxable gifts (from Schedule A) to prior cumulative taxable gifts (from Schedule B) to get total cumulative taxable gifts; apply IRS Table for Computing Gift Tax (2020 rates: 18 percent to 40 percent) to compute total tax; subtract applicable credit amount (2020 basic credit $4,577,800 plus any DSUE from Schedule C, line 5) to determine 2020 net gift tax due or overpayment.
Sign and date Form 709 (line 19); if splitting gifts, spouse signs line 18. Attach Schedules A, B, C (if applicable), D (if applicable), and all supporting documentation (qualified appraisal if property valuation exceeds $5,000, trust instruments if gifts to trusts, entity documentation for partnership/corporation interests). File by April 15, 2021, or file Form 8892 by that date to extend six months to October 15, 2021. For 2020, the unified transfer tax rate schedule imposes tax at a maximum rate of 40 percent on cumulative taxable transfers exceeding the basic exclusion amount.
Line and Section Changes for 2020
The 2020 Form 709 instructions do not explicitly document redesigns or line number shifts from the 2019 version. The form structure (Part 1: General Information; Schedule A: Gifts; Schedule B: Prior Gifts; Schedule C: DSUE; Schedule D: GST; Part 2: Tax Computation) remains consistent with the design of the prior year. If prior-year line numbers or sections differ, the IRS instructions do not flag those changes in the 2020 guidance provided. No significant structural changes or line renumbering occurred for the 2020 Form 709 compared to the 2019 version.
Form-Specific Limitations for 2020
Nonresident aliens with U.S.-situs gifts file Form 709 for 2020 until Form 709-NA becomes available; marital deduction and GST exemption rules differ for nonresidents. Sole proprietors, general partners, LLC members, and S-corporation shareholders cannot file 709 for business gifts; the individual (not the entity) files 709 only if personal funds or personal property are transferred.
For 2020, spouses cannot file jointly; each spouse must file a separate Form 709. Gift splitting requires the consent of both spouses, making them jointly and severally liable for any resulting gift tax. Corporations, partnerships, trusts, and estates are not required to file Form 709; only individual transferors are required to file.
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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.
