What IRS Form 709 (2018) Is For

Form 709 is the United States Gift (and Generation-Skipping Transfer) Tax Return used to report transfers subject to federal gift tax and certain generation-skipping transfer (GST) taxes (IRS Instructions for Form 709 (2018)). You must file this form if you gave gifts to someone in 2018 totaling more than $15,000 (other than to your spouse), made any gifts of "future interests" regardless of amount, or want to elect gift-splitting with your spouse.

When You'd Use Form 709 for 2018 (Late or Amended Filing)

Late filing situations typically arise when taxpayers receive IRS notices questioning unreported gifts, discover they should have filed after reviewing IRS publications, or realize they exceeded the $15,000 annual exclusion during 2018.

You might also need to file an amended return using the 2018 form if you discover errors in valuation, failed to report all gifts, or need to make elections like gift-splitting that weren't included on your original return.

Unlike income tax refunds, gift tax returns don't typically generate refunds, but proper filing protects your lifetime exemption tracking and starts the three-year statute of limitations for IRS challenges to gift valuations.

Key Rules Specific to 2018

The 2018 tax year marked significant changes due to tax law updates. The annual gift exclusion was $15,000 per recipient, and the lifetime basic exclusion amount increased dramatically to $11,180,000 (IRS Instructions for Form 709 (2018)).

For gifts to non-citizen spouses, the annual exclusion was $152,000. The generation-skipping transfer tax exemption also increased to $11,180,000.

These higher exemption amounts mean many taxpayers who needed to file Form 709 in previous years may not have owed actual gift tax in 2018, even on substantial gifts.

Step-by-Step (High Level)

• Gather your records: Collect gift documentation, prior year Form 709 copies, and any appraisals for the gifts you made in 2018
  
  
• Obtain tax transcripts: Request IRS transcripts of previous gift tax returns using Form 4506-T to ensure accurate lifetime exemption tracking
  
  
• Complete the 2018 form: Use only the 2018 version of Form 709, available at IRS.gov/pub/irs-prior/f709--2018.pdf
  
  
• Attach required schedules: Complete Schedules A (gift computation), B (gift splitting election if applicable), C (deceased spousal unused exclusion), and D (generation-skipping transfers) as needed
  
  
• Choose filing method: Mail to the IRS processing center address specified in the 2018 instructions or use an authorized e-file provider if available
  
  
• Keep copies: Maintain copies of all forms, schedules, and supporting documentation for your records
  
  

Common Mistakes and How to Avoid Them

• Using the wrong tax year form: Always use the 2018 version of Form 709 for 2018 gifts, not the current year's form, as tax rates and exemption amounts differ
  
  
• Inadequate gift disclosure: Provide complete descriptions, appraisals, and recipient information to start the statute of limitations running and avoid future IRS challenges (IRS Instructions for Form 709 (2018))
  
  
• Forgetting about gift-splitting elections: If married, both spouses must file returns and sign consents if electing to split gifts, even if only one spouse made the actual gifts
  
  
• Incorrectly reporting present vs. future interests: Future interest gifts (like remainder interests in trusts) don't qualify for the annual exclusion and must be reported regardless of value
  
  
• Omitting generation-skipping transfers: Gifts to grandchildren or great-grandchildren may require additional GST tax calculations on Schedule D
  
  
• Poor valuation documentation: Include qualified appraisals or detailed valuation methods, especially for business interests, real estate, or other hard-to-value assets
  
  

What Happens After You File

The IRS typically takes several months to process gift tax returns due to their complexity. You'll receive a notice confirming acceptance or requesting additional information.

If you owe gift tax, payment options include Form 9465 for installment agreements, though interest and penalties continue to accrue (IRS Instructions for Form 8892).

The IRS has three years from filing to challenge gift valuations if adequately disclosed, or unlimited time if gifts aren't properly reported.

You have appeal rights if the IRS proposes changes to your return, including requesting Appeals Office review or Tax Court petition for certain disputes.

FAQs

Can I still file my 2018 Form 709 late without penalties?

Late filing penalties apply at 5% per month of unpaid tax under Section 6651, but if no gift tax is actually owed (your gifts stay within lifetime exemption), monetary penalties may be minimal (IRS Instructions for Form 8892). However, failure to file can leave gift valuations open to IRS challenge indefinitely.

Do I need to amend my 2018 return if I discover errors?

Yes, file an amended 2018 Form 709 to correct errors in gift reporting, valuations, or elections. Check the "amended return" box on the form and explain changes in an attached statement.

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

Request transcripts using Form 4506-T or through your online IRS account at IRS.gov. You need these to accurately track your lifetime exemption usage when filing late returns.

What if I can't pay the gift tax I owe on my 2018 return?

Contact the IRS to arrange a payment plan using Form 9465. Interest and penalties continue, but installment agreements prevent more aggressive collection actions (IRS Internal Revenue Manual).

Is there a deadline for claiming refunds on gift tax returns?

Generally, you have three years from the original due date to claim refunds, though gift tax overpayments are uncommon. For 2018 returns, this deadline has likely passed unless you filed extensions.

Should I file state gift tax returns too?

Most states don't impose separate gift taxes and follow federal rules, but check your state's tax agency requirements as some states may have different provisions.

Can I e-file my 2018 Form 709?

E-filing options for gift tax returns were limited in 2018. Check the current IRS Modernized e-File system at IRS.gov for authorized e-file providers, though most 2018 returns may need to be mailed to the processing center specified in the 2018 instructions.

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