How to Fill Out and File IRS Form 709: Gift Tax Return

To fill out IRS Form 709, list every reportable 2019 gift on Schedule A with the donee’s information, your basis, and the fair market value on the gift date; carry cumulative prior gifts through Schedule B if you’ve filed before; run the totals through the Tax Computation on page 1; sign, and mail the return to the IRS service center in Kansas City. For 2019, the annual exclusion was $15,000 per recipient and the lifetime basic exclusion was $11.4 million, so most filers owe no tax and are filing to keep the IRS’s record of lifetime exemption use accurate.¹

Confirm You Actually Need to File

You had to file a 2019 Form 709 if you gave any single person more than $15,000 in gifts of a present interest during the calendar year.² A few other situations trigger a filing regardless of the dollar amount:

You and your spouse elected to split gifts, in which case both spouses file even if the combined gift was under $30,000.
You made a gift of a future interest, such as a remainder interest in a trust. Future-interest gifts do not qualify for the $15,000 annual exclusion and are reported in full.
You gave more than $155,000 to a spouse who is not a U.S. citizen.
You made a direct or indirect generation-skipping transfer to a grandchild or a skip-person trust.

Some transfers are not gifts for this purpose and do not go on the form at all. Tuition paid directly to a school, and medical expenses paid directly to a provider, are unlimited exclusions when the payment goes straight to the institution rather than the beneficiary.³ Gifts to a U.S.-citizen spouse, gifts to qualifying charities, and political contributions are also outside the gift tax. None of these require a Form 709 on their own.

Gather Your Records First

The form moves quickly once your records are in front of you and painfully if they aren’t. Before you start, pull together:

The full legal name, current address, and Social Security number of each recipient.⁴
A description of each gift. Cash needs only a dollar amount. Stock requires the number of shares, whether common or preferred, the CUSIP, the exchange, and price per share. Real estate needs a legal description, street address, and purchase date.
Your adjusted basis in each non-cash gift, generally original cost plus improvements minus depreciation.
The fair market value on the date of the gift. Publicly traded securities use the mean of the high and low quoted prices for that date. Real estate, private business interests, and other hard-to-value assets usually need a qualified appraisal.
Your prior Forms 709, if any, for the cumulative totals that feed Schedule B.

If any gift was an interest in a closely held business, keep the underlying financials and appraisal handy. Discounts for minority interest or lack of marketability draw close attention, and the appraisal needs to explain its methodology in enough detail to satisfy the disclosure rules discussed later.

Fill Out Schedule A

Schedule A is where every reportable gift is listed. It has three parts based on who received the gift:⁴

Part 1 covers gifts subject only to gift tax. Most gifts go here: cash or property given directly to individuals who are not skip persons.
Part 2 covers direct skips, generally gifts to grandchildren or to trusts whose beneficiaries are all two or more generations below you.
Part 3 covers indirect skips, meaning transfers to trusts that include a non-skip beneficiary but whose structure may later trigger the generation-skipping transfer tax.

For each gift, enter the donee’s name and address, a description of the property, the date of the transfer, your adjusted basis, and the fair market value on the gift date. If you gave to the same person on multiple dates, list each transfer as a separate line.

Then move to Part 4, Taxable Gift Reconciliation. Line 1 totals the gifts from Parts 1 through 3. Line 2 is the annual exclusions you’re claiming, up to $15,000 per donee (or $7,500 per donee if you’re splitting gifts with a spouse). Line 4 is the marital deduction for qualifying gifts to a U.S.-citizen spouse. The bottom of Part 4 produces your net taxable gifts for 2019, which carries to the Tax Computation on page 1.

Elections You Make on the Form

Gift-Splitting With a Spouse

Married couples can elect to treat every gift made by either spouse during 2019 as if each spouse made half, effectively doubling the annual exclusion to $30,000 per recipient. Both spouses have to file for the year, even the spouse who made no gifts.⁴ To make the election, answer “Yes” to the gifts-by-spouses question in Part I on page 1, then complete Part III on page 2. The consenting spouse signs Part III.⁵ The election covers all gifts made by both spouses that year; you can’t split some and not others. It’s also unavailable when one spouse transfers property to a trust over which the other spouse holds a general power of appointment.

The 529 Plan Five-Year Election

If you contributed more than $15,000 to a 529 plan for one beneficiary in 2019, you could elect to spread the contribution over five years for gift tax purposes. That allowed up to $75,000 in a single year for one beneficiary without dipping into your lifetime exemption.⁴ Check the box on Line B at the top of Schedule A and attach a statement showing the total contribution for each beneficiary, the amount you’re electing to spread, and the beneficiary’s name. Report one-fifth on the 2019 return; report another fifth on each of the next four years’ returns, even if you have no other reportable gifts in those years. If the beneficiary dies before the five-year period ends, the amount allocated to the remaining years is added back to your taxable gifts in the year of death.

Fill Out Schedule B if You’ve Filed Before

Schedule B is the running total of every taxable gift you’ve reported on prior returns. That cumulative figure sets your remaining lifetime exclusion and the rate bracket that applies to this year’s gifts.⁴

Never filed before? Check “No” on the prior-gifts question in Part I and skip Schedule B. If you have filed, list each year chronologically in Column (a), the IRS office where you filed in Column (b), and the taxable gift amount from that return in Column (e). Column (c) tracks the applicable credit used in each period; the worksheet in the instructions handles the calculation once cumulative prior gifts exceed $500,000. Column (e) should reflect the finally determined taxable gift amount for each year, not just what you originally reported if the IRS later adjusted a valuation.

Run the Tax Computation on Page 1

Page 1 pulls Schedules A and B together to determine any tax owed:

Line 1: current-year taxable gifts from Schedule A, Part 4.
Line 2: total taxable gifts from all prior periods, from Schedule B.
Lines 3 through 6: compute the tentative tax on the combined total using the unified rate schedule in the instructions, then subtract the tax that would have been due on the prior gifts alone. What’s left is the tax attributable to your 2019 gifts.
Line 7 onward: apply the applicable credit. For 2019 the credit sheltered up to $11.4 million in cumulative lifetime gifts. Cumulative taxable gifts above that ceiling were taxed at a top rate of 40 percent.¹

Confirm that every total on page 1 traces back to a figure on the schedules. Mismatches between the schedules and the computation are one of the most common reasons the IRS follows up with a notice.

Sign, Date, and Mail the Return

The donor signs and dates the return under penalties of perjury. If you elected gift-splitting, the consenting spouse also signs Part III on page 2. A paid preparer completes the preparer section at the bottom of page 1.

Mail the completed Form 709 to:

Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999⁶

The original due date for 2019 gift tax returns was April 15, 2020. An extension you got for your 2019 income tax return using Form 4868 automatically covered your gift tax return. If you needed a gift-tax-only extension, Form 8892 provided an automatic six-month extension.⁷ Keep a complete copy of the filed return with every appraisal and supporting schedule. Those records get used during estate settlement to determine remaining lifetime exemption, and the IRS can ask for them decades later.

Give the IRS Enough Detail to Start the Clock

Filing doesn’t only report the gift; it starts the IRS’s three-year window to challenge the values you reported. That window only opens if each gift is adequately disclosed on the return.⁸ A gift that isn’t adequately disclosed stays open indefinitely, including during any future estate tax audit.

To meet the standard, the return or an attached statement should include:

A description of the transferred property and any consideration you received back.
The identity of, and your relationship to, each recipient.
For trust transfers, the trust’s tax identification number and either a summary of the trust terms or a copy of the trust document.
A detailed description of the valuation method, including the financial data you relied on, any restrictions on the property, and an explanation of any minority-interest or lack-of-marketability discount you claimed.

Publicly traded securities are straightforward: list the exchange, CUSIP, and the mean between the high and low selling prices on the valuation date. Interests in private entities require more. Report the fair market value of 100 percent of the entity before discounts, the pro rata portion transferred, and the final discounted value. Reporting only the discounted number, with no showing of how you got there, is the most common way donors fail the disclosure test.

What Happens if You File Late or Under-Value a Gift

If you owed gift tax and filed late without reasonable cause, the IRS imposes a late-filing penalty under IRC 6651 and may add a late-payment penalty on top. Interest runs on any unpaid balance from the original due date until you pay in full.⁹

Valuation errors carry their own exposure. Reporting a gift at 65 percent or less of its correct value triggers an accuracy-related penalty for substantial valuation understatement. Reporting it at 40 percent or less is a gross valuation misstatement and carries a higher penalty. Both apply on top of the additional tax due on the revalued gift.

If no tax is owed because your cumulative lifetime gifts remain under $11.4 million, filing late costs little in dollars; there’s no balance for interest to accrue on. The real cost is that the adequate-disclosure clock never started. Every gift on that return stays open to IRS challenge for as long as the IRS wants to look, which is why late filing matters most for returns that include valuation discounts or hard-to-price assets.

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Internal Revenue Service. Estate and Gift Tax FAQs
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Internal Revenue Service. 2019 Instructions for Form 709
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eCFR. 26 CFR 25.2503-6 – Exclusion for Certain Qualified Transfer for Tuition or Medical Expenses
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Internal Revenue Service. Instructions for Form 709
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Internal Revenue Service. Form 709 – United States Gift (and Generation-Skipping Transfer) Tax Return
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Internal Revenue Service. Where to File – Forms Beginning With the Number 7
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Internal Revenue Service. About Form 8892, Application for Automatic Extension of Time To File Form 709 and/or Payment of Gift/Generation-Skipping Transfer Tax
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GovInfo. 26 CFR 301.6501(c)-1 – Exceptions to the Period of Limitations on Assessment
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Internal Revenue Service. 20.1.11 Excise Tax and Estate and Gift Tax Penalties