Coconote
AI notes
AI voice & video notes
Try for free
📄
Guide to IRS Form 709 for Gift Tax
Aug 21, 2024
📄
View transcript
🤓
Take quiz
Notes on Form 709: Gift Tax and Generation Skipping Transfer Tax
Introduction
Presented by John from e-Gov Access Inc.
Discusses IRS Form 709, used for gift tax and generation-skipping transfer tax.
Form is downloadable from the IRS website.
E-Gov Access Inc. added yellow navigation buttons to aid form navigation.
Navigation and Usage
Navigation Buttons
:
Help move through the form but do not print on the paper copy.
Example usage: move to Schedule B, back to navigation page, etc.
Software Requirement
:
Must use Adobe Acrobat Reader for form calculations.
Feature for amended returns: "Amended" prints on form top when clicked.
Filling Out the Form
Example Information
:
Taxpayer: Sam Jones, entered address and SSN.
Donee: Sam's son, Ed.
Form Details
Lines 8-9
: Skipped as not applicable.
Line 10
: Number of donees (1 - Ed).
Line 11
: No previous filings, no address change, no gift splitting with spouse.
Line 19
: DSUE (Deceased Spouse Unused Exemption) not applied, no spouse.
Entering Gifts
Schedule A, Part 1
: Gifts subject only to gift tax.
Sam gave his son Ed $5 million in cash on 10/15/2020.
No discounts or Section 529 election.
Annual Exclusion
:
Entered in Schedule A Part 4.
$15,000 per donee; taxable gift is $4,985,000.
Tax Computation
Total taxable gifts: $4,985,000.
Tax and Credit
:
Tax computed from tax table.
Lifetime credit: $4,577,800 (not applicable for non-residents).
Tax liability if non-resident checked.
Case Changes
Additional Gift: Prior Year Gift of $10 Million
Schedule B
: Prior year gifts noted.
Example: $10 million cash gift in 2019.
Tax Changes
:
Total gifts: $14,985,000.
Computation results in tax of $1,994,000.
Lifetime credit used: $3,940,000.
Available credit: $632,000.
Tax due: $1,362,000.
Generation-Skipping Transfer (GST) Tax
Scenario
: Ed is Sam's grandson, not son.
Schedule D
: GST reconciliation.
Lifetime exemption: $11,580,000.
Prior year use: $10,000,000, leaving $1,580,000 available.
Total tax with GST: $1,368,000.
Tax Computation Impact
:
Total taxable gifts: $6,353,000.
New tax: $6,487,000.
Tax due with GST consideration: $3,277,200.
Conclusion
Form 709 facilitates gift and generation-skipping tax calculations.
Understanding of form navigation and computation critical for accurate filing.
Useful for determining tax obligations with different scenarios (e.g., prior gifts, generational skips).
📄
Full transcript