What IRS Form 709 (2017) Is For

IRS Form 709 (2017) is the United States Gift (and Generation-Skipping Transfer) Tax Return used to report gifts you made during calendar year 2017 that exceed certain thresholds. You must file this form if you gave gifts totaling more than $14,000 to any one person (other than your spouse) during 2017, or if you made any gifts of "future interests" regardless of the amount (IRS Instructions for Form 709 (2017)). The form is also required when married couples elect to "split" their gifts, allowing them to effectively double the annual exclusion by treating gifts as if made half by each spouse.

When You'd Use Form 709 for 2017 (Late or Amended Filing)

You would file Form 709 for 2017 as a late or amended return in several scenarios. Most commonly, taxpayers receive IRS notices (such as CP161) indicating they failed to file a required gift tax return, often after the IRS discovers large gifts through bank reporting or estate proceedings.

You might also need to file late if you initially thought a gift qualified for an exclusion but later realized it didn't, or if you discover errors in valuation or calculations on a previously filed return.

Since there's no separate amended form, you file a corrected Form 709 with "Amended Return" written at the top. The original due date for 2017 Form 709 was April 17, 2018, but late filing is still possible, though penalties and interest may apply unless you can demonstrate reasonable cause for the delay.

Key Rules Specific to 2017

For 2017, the annual exclusion remained at $14,000 per recipient, unchanged from 2016. However, the lifetime gift tax exemption (basic exclusion amount) was $5,490,000 per individual, with a corresponding basic credit amount of $2,141,800 (IRS Instructions for Form 709 (2017)).

For gifts to non-citizen spouses, the annual exclusion was significantly higher at $149,000.

This was before the Tax Cuts and Jobs Act substantially increased the lifetime exemption starting in 2018, making the 2017 exemption amount notably lower than current levels.

The top gift tax rate remained at 40% for amounts exceeding the lifetime exemption.

Married couples could still elect gift splitting, effectively doubling their annual exclusions to $28,000 per recipient, but both spouses were required to file their own individual Form 709 returns.

Step-by-Step (High Level)

• Gather documentation: Obtain gift tax transcripts from prior years using Form 4506-T if needed, and collect all records of gifts made during 2017, including appraisals and valuations.
  
  
• Complete the correct-year form: Use the 2017 version of Form 709 specifically, available from IRS.gov/prior-year-forms, ensuring you're not using a more recent year's form.
  
  
• Attach required schedules: Complete Schedules A (gifts computation), B (gifts from prior periods if applicable), C (restored exclusion if applicable), and D (generation-skipping transfer tax) as needed.
  
  
• Mail to proper address: Send completed return to Department of the Treasury, Internal Revenue Service Center, Cincinnati, OH 45999, or use the Covington, KY address if using private delivery services.
  
  
• Keep copies and track submissions: Maintain copies of all forms and supporting documents, and consider using certified mail or delivery confirmation for late filings to establish proof of submission date.
  
  

Common Mistakes and How to Avoid Them

• Using the wrong year's form: Always use the 2017 Form 709 for 2017 gifts—forms change between years and using the wrong version can cause processing delays or rejections.
  
  
• Inadequate disclosure: Failing to provide sufficient detail about gifts can prevent the three-year statute of limitations from starting. Include complete property descriptions, valuation methods, and relationship between donor and recipient (Treasury Regulations section 301.6501(c)-1).
  
  
• Forgetting split-gift requirements: If electing gift splitting, both spouses must file individual returns and both must sign—there are no joint gift tax returns, unlike income tax filing.
  
  
• Incorrect valuation dates: Use the date-of-gift values, not current values, and be especially careful with discounts for lack of marketability or minority interests, which require detailed explanations.
  
  
• Missing prior-year information: Form 709 requires reporting gifts from all prior years in Schedule B, so gather records from previous returns or request transcripts before filing.
  
  
• Not reporting charitable gifts when required: Even though charitable gifts are generally deductible, you must still report them on Form 709 if you made any other reportable gifts during the year or if you transferred only a partial interest to charity.
  
  

What Happens After You File

The IRS typically takes 8-16 weeks to process gift tax returns, though complex returns or those requiring manual review may take longer.

You'll receive an acknowledgment notice confirming receipt and processing.

If you owe gift tax, you have several payment options including installment agreements using Form 9465 (typically approved within 30 days for qualifying taxpayers), though interest and penalties continue to accrue until paid in full (IRS Instructions for Form 9465).

If the IRS questions your filing, you'll receive a notice explaining any proposed changes, and you have appeal rights including the right to request a conference with IRS Appeals or petition the Tax Court if a deficiency notice is issued.

Keep in mind that filing Form 709 starts a three-year statute of limitations for IRS examination, but only if adequate disclosure is provided—incomplete disclosure can leave the return open to examination indefinitely.

FAQs

Can I still file Form 709 for 2017 even though it's years late?

Yes, there's no absolute deadline for filing late gift tax returns. However, you'll face penalties and interest unless you can demonstrate reasonable cause for the delay. The failure-to-file penalty is 5% of the unpaid tax per month, up to 25% maximum.

How do I get transcripts of my previous gift tax returns?

Use Form 4506-T to request gift tax transcripts from the IRS. Processing typically takes up to 75 calendar days. You'll need these to complete Schedule B if you've made gifts in prior years requiring Form 709 filing.

Is there still time to claim a refund on my 2017 gift tax?

Generally, you must file a refund claim within three years of the return's due date or two years from when you paid the tax, whichever is later. For 2017 Form 709, the refund window has likely closed unless special circumstances apply.

Do I need to amend my state gift tax return too?

This depends on your state's requirements. Most states don't have separate gift taxes, but a few do. Check with your state tax authority or a tax professional familiar with your state's rules.

What if I can't pay the gift tax I owe from 2017?

You can request an installment agreement using Form 9465. The IRS typically responds within 30 days, and you can often set up payment plans for up to 72 months depending on the amount owed.

Will filing a late Form 709 affect my future estate tax exemption?

No, filing late doesn't reduce your available lifetime exemption, but it may affect the statute of limitations. Proper filing with adequate disclosure protects your exemption usage from future IRS challenges.

Can I e-file Form 709 for 2017?

No, electronic filing for Form 709 was not available for 2017 tax year returns. All 2017 Form 709 returns must be filed on paper and mailed to the IRS processing center.

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