How to Fill Out IRS Form 709: Gifts, Computation, and Filing

To fill out IRS Form 709, the federal gift tax return, you report each gift above the annual exclusion on Schedule A, list any prior-year taxable gifts on Schedule B, calculate a tentative tax in Part 2, subtract the unified credit tied to your lifetime exemption, and mail the paper return by April 15 of the year after the gift. For gifts made in 2026, the annual exclusion is $19,000 per recipient and the lifetime exemption is $15,000,000 per person, so most filers report the gift but owe no tax.¹

Confirm You Actually Need To File

The filing trigger is simple: a gift of more than $19,000 to any one recipient during 2026.¹ The threshold is per recipient, not total giving. Ten separate $19,000 gifts to ten people creates no filing requirement; one $19,001 gift does.

Married couples can elect gift-splitting, which treats a gift by one spouse as if each spouse made half. That doubles the effective threshold to $38,000 per recipient.² Both spouses must consent on the return, and the non-donor spouse signs the consent section. The election covers every gift either spouse made during the year, not just the one that prompted it. If splitting brings each spouse’s share back under $19,000 per recipient, the couple still files Form 709 solely to record the election.

A few transfers stay off the form entirely even when large. Tuition paid directly to the school and medical bills paid directly to the provider are excluded without limit, and no return is required for them.³⁴ Payments must go straight to the institution; writing a check to the student or patient forfeits the exclusion. Gifts to a U.S. citizen spouse are covered by the unlimited marital deduction.⁵ For a non-citizen spouse, the 2026 threshold is $194,000 before Form 709 is required.¹ Qualifying charitable gifts generally don’t require the form either.

Gather Your Information Before You Start

You’ll move through the form much faster if these items are in front of you:

Your full legal name, Social Security number, and current address.
Each recipient’s name, address, relationship to you, and Social Security or taxpayer identification number.
A description of each gift. Cash is straightforward. Real estate needs a legal description and parcel number. Business interests need the entity’s financial statements and organizational documents.
Your adjusted basis in each non-cash gift, meaning what you paid, adjusted for improvements, depreciation, and similar factors. The recipient will use this figure for future capital gains, so accuracy matters.
Fair market value on the date of the gift. Publicly traded stock is easy; real estate, art, and closely held business interests generally need a professional appraisal.

The IRS instructions state that adequate disclosure of a gift generally requires either a qualified appraisal or a detailed description of how fair market value was determined.⁶ Adequate disclosure starts a three-year clock on IRS challenges to your valuation. Without it, no statute of limitations begins and the valuation can be reopened indefinitely. Attach appraisals for hard-to-value property. For publicly traded securities, describe the valuation method (typically the closing price on the date of the gift).

Working Through the Form

Part 1: General Information

The top of the form captures your identifying details, your spouse’s information if applicable, and several yes-or-no questions. The one that most often changes the return is whether you elect to split gifts with your spouse. If you check yes, your spouse must sign the consent section on page 2, and the election applies to every gift either of you made during the year. Settle that decision before filling in Schedule A.

Schedule A: The Gifts Themselves

Schedule A has three parts, sorted by who received the gift.⁷

Part 1 is for gifts subject only to gift tax: transfers to your children, siblings, friends, or anyone else in the generation directly below yours.
Part 2 is for direct skips, meaning gifts to grandchildren, more remote descendants, or unrelated people more than 37.5 years younger than you. These may trigger generation-skipping transfer tax on top of gift tax.
Part 3 is for indirect skips, generally gifts to trusts that could later benefit skip persons.

For each gift, enter the recipient’s name and relationship, describe the property, enter your adjusted basis, and enter the fair market value on the date of transfer. If you applied any valuation discounts (for lack of marketability or a minority interest, for example), spell out the discount and the methodology in the description column. Undisclosed discounts are one of the fastest ways to invite scrutiny.

Schedule B: Prior-Year Gifts

If you’ve filed Form 709 in any earlier year, you list those prior taxable gifts on Schedule B. Gift tax is cumulative: the current-year rate depends on total taxable gifts across your lifetime. For each prior year, enter the calendar year, the IRS office where the return was filed, the amount of taxable gifts, and the unified credit used. Omitting Schedule B can produce the wrong tax rate and expose you to penalties.

Part 2: Tax Computation

Totals from Schedule A flow into Part 2, which calculates a tentative tax using the graduated rate table. Rates start at 18% on the first $10,000 of taxable gifts and climb to 40% on amounts above $1,000,000.¹ You then subtract the unified credit, which is the tax equivalent of your remaining lifetime exemption.⁸ The 2026 exemption is $15,000,000 per person, reflecting the increase enacted by the One, Big, Beautiful Bill signed on July 4, 2025. For almost every filer, the credit wipes out the entire tax, and the form’s job is simply to document how much exemption was consumed.

A worked example: you give your daughter $119,000 in 2026. The first $19,000 is covered by the annual exclusion. The remaining $100,000 is a taxable gift reported on Schedule A. Instead of writing a check, you apply $100,000 of your lifetime exemption, leaving $14,900,000 available. Nothing is owed, but the paper trail exists.

Two Situations That Change What You Enter

529 Plan Contributions

A contribution to a 529 education savings plan counts as a gift to the beneficiary. Contribute more than $19,000 to one beneficiary’s plan in 2026 and, without an election, the excess is a taxable gift. A special rule lets you spread a lump-sum contribution over five years for gift tax purposes. A $95,000 contribution can be treated as $19,000 per year for five years, keeping each year within the annual exclusion and using no lifetime exemption.

You make the election on Form 709 in the year of the contribution and indicate the five-year spread on Schedule A. You don’t have to file again in years two through five unless you make other reportable gifts. Contribute more than $95,000, and the excess above that amount is a taxable gift in year one.

Generation-Skipping Transfers

Gifts to grandchildren or other skip persons can trigger the generation-skipping transfer tax, a flat 40% imposed in addition to any regular gift tax.⁷ Each person has a GST exemption equal to the basic exclusion amount, $15,000,000 in 2026, and gifts within the annual exclusion are also exempt. You allocate your GST exemption on Schedule A and the related Schedule C.

What Your Entries Mean For the Recipient

When you give property other than cash, the recipient inherits your basis. If you bought stock for $10,000 and give it away when it’s worth $50,000, the recipient’s basis is $10,000, and they’ll owe capital gains on the $40,000 appreciation when they sell.⁹

There is one twist. If fair market value on the date of the gift is lower than your basis, the recipient uses the lower value for calculating a loss. Stock you bought for $50,000 now worth $30,000 gives the recipient a $30,000 basis for loss purposes; the built-in loss disappears. That is why Form 709 asks for both adjusted basis and fair market value: your entries become the recipient’s tax record going forward.

Filing, Extensions, and What Happens After

Form 709 is due April 15 of the year after the gift. Gifts made in 2026 are reported by April 15, 2027.⁶ If April 15 falls on a weekend or holiday, the deadline moves to the next business day.

Two ways to get an automatic six-month extension:

Form 4868, which extends your individual income tax return, automatically extends Form 709. No separate filing is needed.⁶
Form 8892 extends Form 709 by itself if you aren’t extending your income tax return.¹⁰

Neither extension buys extra time to pay. Interest runs on any unpaid gift tax from April 15. Filing late without an extension triggers a failure-to-file penalty of 5% of the unpaid tax per month, capped at 25%.¹¹

Form 709 is paper-filed. The IRS does not accept it electronically. Use certified mail or a delivery service with proof of the send date. The correct mailing address depends on your state and appears in the current year’s instructions.

Keep the filed return, all supporting appraisals, and your calculation worksheets permanently. Not seven years. Permanently. Because Form 709 feeds your eventual estate tax calculation, returns filed decades ago may need to be produced when settling your estate. If the IRS reviews a large or complex return, it may issue a closing letter accepting the values. Keep that too; it closes the door on future challenges to those gifts.

1
Internal Revenue Service. What’s New – Estate and Gift Tax
2
Office of the Law Revision Counsel. 26 USC 2513 – Gift by Husband or Wife to Third Party
3
Office of the Law Revision Counsel. 26 USC 2503 – Taxable Gifts
4
eCFR. 26 CFR 25.2503-6 – Exclusion for Certain Qualified Transfer for Tuition or Medical Expenses
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Office of the Law Revision Counsel. 26 US Code 2523 – Gift to Spouse
6
Internal Revenue Service. Instructions for Form 709
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Internal Revenue Service. 5.5.9 Collecting Gift Tax and Generation-Skipping Transfer Tax
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Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax
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Office of the Law Revision Counsel. 26 USC 1015 – Basis of Property Acquired by Gifts and Transfers in Trust
10
eCFR. 26 CFR 25.6081-1 – Automatic Extension of Time for Filing Gift Tax Returns
11
Internal Revenue Service. Failure to File Penalty