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Instructions for Form 709 (2007)Table of Contents
Line 5. Legal residence (domicile). In general, your legal residence (also known as your domicile) is acquired by living in a place, for even a brief period of time, with no definite present intention of moving from that place. Enter one of the states of the United States (including the District of Columbia) or a foreign country in which you legally reside or are domiciled at the time of the gift.
Line 7. Citizenship. Enter your citizenship. The term “citizen of the United States” includes a person who, at the time of making the gift:
Note.Form 709-A, United States Short Form Gift Tax Return, previously used by married couples to report nontaxable gifts they consent to split is obsolete. If you and your spouse agree, all gifts (including gifts of property held with your spouse as joint tenants or tenants by the entirety) either of you make to third parties during the calendar year will be considered as made one-half by each of you if:
If you transferred property partly to your spouse and partly to third parties, you can only split the gifts if the interest transferred to the third parties is ascertainable at the time of the gift. The consent is effective for the entire calendar year; therefore, all gifts made by both you and your spouse to third parties during the calendar year (while you were married) must be split. If the consent is effective, the liability for the entire gift tax of each spouse is joint and several. If you meet these requirements and want your gifts to be considered made one-half by you and one-half by your spouse, check the “Yes” box on line 12, page 1; complete lines 13 through 17; and have your spouse sign the consent on line 18. If you are not married or do not wish to split gifts, skip to Schedule A.
Line 15. If you were married to one another for all of 2007, check the “Yes” box and skip to line 17. If you were married for only part of the year, check the “No” box and go to line 16. If you were divorced or widowed after you made the gift, you cannot elect to split gifts if you remarried before the end of 2007.
Your spouse must sign the consent for your gift-splitting election to be valid. The consent may generally be signed at any time after the end of the calendar year. However, there are two exceptions.
The executor for a deceased spouse or the guardian for a legally incompetent spouse may sign the consent. In general, if you and your spouse elect gift splitting, then both spouses must file his or her own, individual, gift tax return. However, only one spouse must file a return if all the requirements of either of the exceptions below are met. In the exceptions below, “gifts” means gifts (or parts of gifts) that do not qualify for the political organization, educational, or medical exclusions.
Exception 1. During the calendar year:
Exception 2. During the calendar year:
Do not enter on Schedule A any gift or part of a gift that qualifies for the political organization, educational, or medical exclusions. In the instructions below, “gifts” means gifts (or parts of gifts) that do not qualify for the political organization, educational, or medical exclusions. If the value of any gift you report in either Part 1, Part 2, or Part 3 of Schedule A reflects a discount for lack of marketability, a minority interest, a fractional interest in real estate, blockage, market absorption, or for any other reason, answer “Yes” to the question at the top of Schedule A. Also, attach an explanation giving the factual basis for the claimed discounts and the amount of the discounts taken. If in 2007, you contributed more than $12,000 to a QTP on behalf of any one person, you may elect to treat up to $60,000 of the contribution for that person as if you had made it ratably over a 5-year period. The election allows you to apply the annual exclusion to a portion of the contribution in each of the 5 years, beginning in 2007. You can make this election for as many separate people as you made QTP contributions. You can only apply the election to a maximum of $60,000. You must report in 2007 all of your QTP contributions for any single person that exceed $60,000 (in addition to any other gifts you made to that person). For each of the 5 years, you report in Part 1 of Schedule A, ⅕ (20%) of the amount for which you made the election. In column E of Part 1 (Schedule A), list the date of the gift as the calendar year for which you are deemed to have made the gift (that is, the year of the current Form 709 you are filing). Do not list the actual year of contribution for subsequent years. However, if in any of the last 4 years of the election, you did not make any other gifts that would require you to file a Form 709, you do not need to file Form 709 to report that year's portion of the election amount.
Example. In 2007, D contributed $85,000 to a QTP for the benefit of her son. D elects to treat $60,000 of this contribution as having been made ratably over a 5-year period. Accordingly, for 2007, D reports the following:
You make the election by checking the box on line B at the top of Schedule A. The election must be made for the calendar year in which the contribution is made. Also attach an explanation that includes the following:
If you are electing gift splitting, apply the gift splitting rules before applying these rules. Each spouse would then decide individually whether to make this QTP election.
After you determine which gifts you made are subject to the gift tax and therefore should be listed on Schedule A, you must divide these gifts between:
If you need more space, attach a separate sheet using the same format as Schedule A. 
You must always enter all gifts of future interests that you made during the calendar year regardless of their value.
No gift splitting. If the total gifts of present interests to any donee are more than $12,000 in the calendar year, then you must enter all such gifts that you made during the year to or on behalf of that donee, including those gifts that will be excluded under the annual exclusion. If the total is $12,000 or less, you need not enter on Schedule A any gifts (except gifts of future interests) that you made to that donee. Enter these gifts in the top half of Part 1, 2, or 3, as applicable.
Except for the gifts described below, you do not need to enter any of your gifts to your spouse on Schedule A.
Terminable interest. Terminable interests are defined in the instructions to Part 4, line 4 on page 9. If all the terminable interests you gave to your spouse qualify as life estates with power of appointment (defined under Life estate with power of appointment on page 9), you do not need to enter any of them on Schedule A. However, if you gave your spouse any terminable interest that does not qualify as a life estate with power of appointment, you must report on Schedule A all gifts of terminable interests you made to your spouse during the year.
Charitable remainder trusts. If you make a gift to a charitable remainder trust and your spouse is the only noncharitable beneficiary (other than yourself), the interest you gave to your spouse is not considered a terminable interest and, therefore, should not be shown on Schedule A. For definitions and rules concerning these trusts, see section 2056(b)(8)(B) and Regulations section 20.2055-2.
Future interest. Generally, you should not report a gift of a future interest to your spouse unless the future interest is also a terminable interest that is required to be reported as described above. However, if you gave a gift of a future interest to your spouse and you are required to report the gift on Form 709 because you gave the present interest to a donee other than your spouse, then you should enter the entire gift, including the future interest given to your spouse, on Schedule A. You should use the rules under Gifts Subject to Both Gift and GST Taxes below to determine whether to enter the gift on Schedule A, Part 1, Part 2, or Part 3.
Spouses who are not U.S. citizens. If your spouse is not a U.S. citizen and you gave him or her a gift of a future interest, you must report on Schedule A all gifts to your spouse for the year. If all gifts to your spouse were present interests, do not report on Schedule A any gifts to your spouse if the total of such gifts for the year does not exceed $125,000 and all gifts in excess of $12,000 would qualify for a marital deduction if your spouse were a U.S. citizen (see the instructions for Schedule A, Part 4, line 4, on page 9). If the gifts exceed $125,000, you must report all of the gifts even though some may be excluded.
Direct skip. The GST tax you must report on Form 709 is that imposed only on inter vivos direct skips. An “inter vivos direct skip” is a transfer that is:
Note.If the property transferred in the direct skip would have been includible in the donor's estate if the donor had died immediately after the transfer, see Transfers Subject to an Estate Tax Inclusion Period (ETIP) on page 3.
Trust. For purposes of the GST tax, trust includes not only an explicit trust, but also any other arrangement (other than an estate) that although not explicitly a trust, has substantially the same effect as a trust. For example, trust includes life estates with remainders, terms for years, and insurance and annuity contracts. A transfer of property that is conditional on the occurrence of an event is a transfer
in trust.
Interest in property. If a gift is made to a natural person, it is always considered a gift of an interest in property for purposes of the GST tax. If a gift is made to a trust, a natural person will have an interest in the property transferred to the trust if that person either has a present right to receive income or corpus from the trust (such as an income interest for life) or is a permissible current recipient of income or corpus from the trust (for example, possesses a general power of appointment).
Skip person. A donee, who is a natural person, is a skip person if that donee is assigned to a generation that is two or more generations below the generation assignment of the donor. See Determining the Generation of a
Donee below. A donee that is a trust is a skip person if all the interests in the property transferred to the trust (as defined above) are held by skip persons. A trust will also be a skip person if there are no interests in the property transferred to the trust held by any person, and future distributions or terminations from the trust can be made only to skip persons. Generally, a generation is determined along family lines as follows.
If more than one of the rules for assigning generations applies to a donee, that donee is generally assigned to the youngest of the generations that would apply. If an estate or trust, partnership, corporation, or other entity (other than certain charitable organizations and trusts described in sections 511(a)(2) and 511(b)(2) and governmental entities) is a donee, then each person who indirectly receives the gift through the entity is treated as a donee and is assigned to a generation as explained in the above rules. Charitable organizations and trusts, described in sections 511(a)(2) and 511(b)(2), and governmental entities are assigned to the donor's generation. Transfers to such organizations are therefore not subject to the GST tax. These gifts should always be listed in Gifts in the form of charitable remainder annuity trusts, charitable remainder unitrusts, and pooled income funds are not transfers to skip persons and therefore are not direct skips. You should always list these gifts in Part 1 of Schedule A even if all of the life beneficiaries are skip persons. If you made a gift to your grandchild and at the time you made the gift, the grandchild's parent (who is your or your spouse's or your former spouse's child) is deceased, then for purposes of generation assignment, your grandchild is considered to be your child rather than your grandchild. Your grandchild's children will be treated as your grandchildren rather than your great-grandchildren. This rule is also applied to your lineal descendants below the level of grandchild. For example, if your grandchild is deceased, your great- This special rule may also apply in other cases of the death of a parent of the transferee. If property is transferred to an individual who is a descendant of a parent of the transferor and that individual's parent (who is a lineal descendant of the parent of the transferor) is deceased at the time the transfer is subject to gift or estate tax, then for purposes of generation assignment, the individual is treated as if he or she is a member of the generation that is one generation below the lower of:
The same rules apply to the generation assignment of any descendant of the individual. This rule does not apply to a transfer to an individual who is not a lineal descendant of the transferor if the transferor at the time of the transfer has any living lineal descendants. If any transfer of property to a trust would have been a direct skip except for this generation assignment rule, then the rule also applies to transfers from the trust attributable to such property.
Ninety-day rule. For assigning individuals to generations for purposes of the GST tax, any individual who dies no later than 90-days after a transfer occurring by reason of the death of the transferor is treated as having predeceased the transferor. The ninety-day rule applies to transfers occurring on or after July 18, 2005. See Regulations section 26.2651-1 for more information.
The GST rules can be illustrated by the following examples. Example 1. You give your house to your daughter for her life with the remainder then passing to her children. This gift is made to a “trust” even though there is no explicit trust instrument. The interest in the property transferred (the present right to use the house) is transferred to a nonskip person (your daughter). Therefore, the trust is not a skip person because there is an interest in the transferred property that is held by a nonskip person, and the gift is not a direct skip. The transfer is an indirect skip, however, because on the death of the daughter, a termination of her interest in the trust will occur that may be subject to the GST tax. See the instructions for Part 3, Schedule A (under Part 3—Indirect Skips on page 9) for a discussion of how to allocate GST exemption to such a trust. Example 2. You give $100,000 to your grandchild. This gift is a direct skip that is not made in trust. You should list it in Part 2 of Schedule A. Example 3. You establish a trust that is required to accumulate income for 10 years and then pay its income to your grandchildren for their lives and upon their deaths distribute the corpus to their children. Because the trust has no current beneficiaries, there are no present interests in the property transferred to the trust. All of the persons to whom the trust can make future distributions (including distributions upon the termination of interests in property held in trust) are skip persons (that is, your grandchildren and great-grandchildren). Therefore, the trust itself is a skip person and you should list the gift in Part 2 of Schedule A. Example 4. You establish a trust List in Part 1 gifts subject only to the gift tax. Generally, all of the gifts you made to your spouse (that are required to be listed, as described earlier), to your children, and to charitable organizations are not subject to the GST tax and should, therefore, be listed only in Part 1. Group the gifts in four categories:
If a transfer results in gifts to two or more individuals (such as a life estate to one with remainder to the other), list the gift to each separately. Number and describe all gifts (including charitable, public, and similar gifts) in the columns provided in Describe each gift in enough detail so that the property can be easily identified, as explained below. For real estate, give:
For bonds, give:
For stocks:
For interests in property based on the length of a person's life, give the date of birth of the person. If you transfer any interest in a closely held entity, provide the EIN of the entity. For life insurance policies, give the name of the insurer and the policy number. Clearly identify in the description column which gifts create the opening of an ETIP as described under Transfers Subject to an Estate Tax Inclusion Period (ETIP) on page 3. Describe the interest that is creating the ETIP. An allocation of GST exemption to property subject to an ETIP that is made prior to the close of the ETIP becomes effective no earlier than the date of the close of the ETIP. See the instructions for Schedule C under Schedule C. Computation of GST Tax beginning on page 10. Show the basis you would use for income tax purposes if the gift were sold or exchanged. Generally, this means cost plus improvements, less applicable depreciation, amortization, and depletion. For more information on adjusted basis, see Pub. 551, Basis of Assets. The value of a gift is the fair market value of the property on the date the gift is made. The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, when neither is forced to buy or to sell, and when both have reasonable knowledge of all relevant facts. Fair market value may not be determined by a forced sale price, nor by the sale price of the item in a market other than that in which the item is most commonly sold to the public. The location of the item must be taken into account whenever appropriate. The fair market value of a stock or bond (whether listed or unlisted) is the mean between the highest and lowest selling prices quoted on the valuation date. If only the closing selling prices are available, then the fair market value is the mean between the quoted closing selling price on the valuation date and on the trading day before the valuation date. To figure the fair market value if there were no sales on the valuation date, see the instructions for Schedule B of Form 706. Stock of close corporations or inactive stock must be valued on the basis of net worth, earnings, earning and dividend capacity, and other relevant factors. Generally, the best indication of the value of real property is the price paid for the property in an arm's-length transaction on or before the valuation date. If there has been no such transaction, use the comparable sales method. In comparing similar properties, consider differences in the date of the sale, and the size, condition, and location of the properties, and make all appropriate adjustments. The value of all annuities, life estates, terms for years, remainders, or reversions is generally the present value on the date of the gift. Sections 2701 and 2702 provide special valuation rules to determine the amount of the gift when a donor transfers an equity interest in a corporation or partnership (section 2701) or makes a gift in trust (section 2702). The rules only apply if, immediately after the transfer, the donor (or an applicable family member) holds an applicable retained interest in the corporation or partnership, or retains an interest in the trust. For details, see sections 2701 and 2702, and their regulations. If you elected to split gifts with your spouse and your spouse has given a gift(s) that is being split with you, enter in this area of Part 1 information on the gift(s) made by your spouse. If only you made gifts and your are splitting them with your spouse, do not make an entry in this area. Generally, if you elect to split your gifts, you must split all gifts made by you and your spouse to third-party donees. The only exception is if you gave your spouse a general power of appointment over a gift you made. To support the value of your gifts, you must provide information showing how it was determined. For stock of close corporations or inactive stock, attach balance sheets, particularly the one nearest the date of the gift, and statements of net earnings or operating results and dividends paid for each of the 5 preceding years. For each life insurance policy, attach Form 712, Life Insurance Statement.
Note for single premium or paid-up policies. In certain situations, for example, where the surrender value of the policy exceeds its replacement cost, the true economic value of the policy will be greater than the amount shown on line 59 of Form 712. In these situations, report the full economic value of the policy on Schedule A. See Rev. Rul. 78-137, 1978-1 C.B. 280 for details.
If the gift was made by means of a trust, attach a certified or verified copy of the trust instrument to the return on which you report your first transfer to the trust. However, to report subsequent transfers to the trust, you may attach a brief description of the terms of the trust or a copy of the trust instrument. Also attach any appraisal used to determine the value of real estate or If you do not attach this information, you must include in Schedule A full information to explain how the value was determined. List in Part 2 only those gifts that are currently subject to both the gift and GST taxes. You must list the gifts in Part 2 in the chronological order that you made them. Number, describe, and value the gifts as described in the instructions for Part 1 on page 8. If you made a transfer to a trust that was a direct skip, list the entire gift as one line entry in Part 2. If you elect under section 2632(b)(3) to not have the automatic allocation rules of section 2632(b) apply to a transfer, enter a check in column C next to the transfer. You must also attach a statement to Form 709 clearly describing the transaction and the extent to which the automatic allocation is not to apply. Reporting a direct skip on a timely filed Form 709 and paying the GST tax on the transfer will qualify as such a statement.
How to report generation-skipping transfers after the close of an ETIP. If you are reporting a generation-skipping transfer that was subject to an ETIP (provided the ETIP closed as a result of something other than the death of the transferor; see Form 706), and you are also reporting gifts made during the year, complete Schedule A as you normally would with the following changes. Report the transfer subject to an ETIP on Schedule A, Part 2.
Column B. In addition to the information already requested, describe the interest that is closing the ETIP; explain what caused the interest to terminate; and list the year the gift portion of the transfer was reported and its item number on Schedule A that was originally filed to report the gift portion of the ETIP transfer.
Some gifts made to trusts are subject only to gift tax at the time of the transfer but later may be subject to GST tax. The GST tax could apply either at the time of a distribution from the trust, at the termination of the trust, or both. Section 2632(c) defines indirect skips and applies special rules to the allocation of GST exemption to such transfers. In general, an indirect skip is a transfer of property that is subject to gift tax (other than a direct skip) and is made to a GST trust. A GST trust is a trust that could have a generation-skipping transfer with respect to the transferor, unless the trust provides for certain distributions of trust corpus to non-skip persons. See section 2632(c)(3)(B) for details. List in Part 3 those gifts that are indirect skips as defined in section 2632(c) or may later be subject to GST tax. This includes indirect skips for which election (2), described below, will be made in the current year or has been made in a previous year. You must list the gifts in Part 3 in the chronological order that you made them. Section 2632(c) provides for the automatic allocation of the donor's unused GST exemption to indirect skips. This section also sets forth three different elections you may make regarding the allocation of exemption.
See section 2632(c)(5) for details.
When to make an election. Election (1) is timely made if it is made on a timely filed gift tax return for the year the transfer was made or was deemed to have been made. Elections (2) and (3) may be made on a timely filed gift tax return for the year for which the election is to become effective.
To make one of these elections, check column C next to the transfer to which the election applies. You must also attach an explanation as described below. If you are making election (2) or (3) on a return on which the transfer is not reported, simply attach the statement described below. If you are reporting a transfer to a trust for which election (2) or (3) was made on a previously filed return, do not make an entry in column C for that transfer and do not attach a statement. Enter on line 4 all of the gifts to your spouse that you listed on Schedule A and for which you are claiming a marital deduction. Do not enter any gift that you did not include on Schedule A. On the dotted line on line 4, indicate which numbered items from Schedule A are gifts to your spouse for which you are claiming the marital deduction.
You may deduct all gifts of nonterminable interests made during the year that you entered on Schedule A regardless of amount, and certain gifts of terminable interests as outlined below.
Terminable interests. Generally, you cannot take the marital deduction if the gift to your spouse is a terminable interest. In most instances, a terminable interest is nondeductible if someone other than the donee spouse will have an interest in the property following the termination of the donee spouse's interest. Some examples of terminable interests are:
Life estate with power of appointment. You may deduct, without an election, a gift of a terminable interest if all four requirements below are met:
Election to deduct qualified terminable interest property (QTIP). You may elect to deduct a gift of a terminable interest if it meets requirements (1), (2), and (4) above, even though it does not meet requirement (3). You make this election simply by listing the qualified terminable interest property on Schedule A and deducting its value from Schedule A, Part 4, line 4. You are presumed to have made the election for all qualified property that you both list and deduct on Schedule A. You may not make the election on a late filed Form 709.
Enter the amount of the annual exclusions that were claimed for the gifts you listed on line 4. You may deduct from the total gifts made during the calendar year all gifts you gave to or for the use of:
On line 7, show your total charitable, public, or similar gifts (minus annual exclusions allowed). On the dotted line, indicate which numbered items from the top of Schedule A are charitable gifts. If you will pay GST tax with this return on any direct skips reported on this return, the amount of that GST tax is also considered a gift and must be added to your other gifts reported on this return. If you entered gifts on Part 2, or if you and your spouse elected gift splitting and your spouse made gifts subject to the GST tax that you are required to show on your Form 709, complete Schedule C, and enter on line 10 the total of Schedule C, Part 3, column H. Otherwise, enter zero on line 10. Section 2523(f)(6) creates an automatic QTIP election for gifts of joint and survivor annuities where the spouses are the only possible recipients of the annuity prior to the death of the last surviving spouse. The donor spouse can elect out of QTIP treatment, however, by checking the box on line 12 and entering the item number from Schedule A for the annuities for which you are making the election. Any annuities entered on line 12 cannot also be entered on line 4 of Schedule A, Part 4. Any such annuities that are not listed on line 12 must be entered on line 4 of Part 4, Schedule A. If there is more than one such joint and survivor annuity, you are not required to make the election for all of them. Once made, the election is irrevocable. If you did not file gift tax returns for previous periods, check the “No” box on page 1 of Form 709, line 11a of Part 1—General Information and skip to Part 2—Tax Computation on the same page. (However, be sure to complete Schedule C, if applicable.) If you filed gift tax returns for previous periods, check the “Yes” box on line 11a and complete Schedule B by listing the years or quarters in chronological order as described below. If you need more space, attach a separate sheet using the same format as If you filed returns for gifts made before 1971 or after 1981, show the calendar years in column A. If you filed returns for gifts made after 1970 and before 1982, show the calendar quarters. In column B, identify the Internal Revenue Service office where you filed the returns. If you have changed your name, be sure to list any other names under which the returns were filed. If there was any other variation in the names under which you filed, such as the use of full given names instead of initials, please explain. In column C, enter the amount of unified credit actually applied in the prior period. If you are required to reduce your allowable unified credit because of gifts you made after September 8, 1976, and before January 1, 1977, enter the unified credit determined after the reduction. In column E, show the correct amount (the amount finally determined) of the taxable gifts for each earlier period. See Regulations section 25.2504-2 for rules regarding the final determination of the value of a gift. You must enter in Part 1 all of the gifts you listed in Part 2 of Schedule A, in that order and using those same values. If you are reporting a generation-skipping transfer that occurred because of the close of an ETIP, complete column B for such transfer as follows.
You are allowed to claim the gift tax annual exclusion currently allowable with respect to your reported direct skips (other than certain direct skips to trusts—see Note on page 11), using the rules and limits discussed earlier for the gift tax annual exclusion. However, you must allocate the exclusion on a gift-by-gift basis for GST computation purposes. You must allocate the exclusion to each gift to the maximum allowable amount and in chronological order, beginning with the earliest gift that qualifies for the exclusion. Be sure that you do not claim a total exclusion of more than $12,000 per donee. Note.You may not claim any annual exclusion for a transfer made to a trust unless the trust meets the requirements discussed under Direct skip on page 6. Every donor is allowed a lifetime GST exemption. The amount of the exemption for 2007 is $2,000,000. For transfers made through 1998, the GST exemption was $1 million. The exemption amounts for 1999 through 2006 are as follows:
In general, each annual increase can only be allocated to transfers made (or appreciation occurring) during or after the year of the transfer.
Example. A donor made $1,750,000 in GSTs through 2005, and allocated all $1,500,000 of the exemption to those transfers. In 2007, the donor makes a $207,000 taxable generation-skipping transfer. The donor can allocate $207,000 of exemption to the 2007 transfer but cannot allocate the $293,000 of unused 2007 exemption to pre-2007 transfers. However, if in 2005, the donor made a $1,750,000 transfer to a trust that was not a direct skip, but from which generation- skipping transfers could be made in the future, the donor could allocate the increased exemption to the trust, even though no additional transfers were made to the trust. See Regulations section 26.2642-4 for details on the redetermination of the applicable fraction when additional exemption is allocated to the trust. You should keep a record of your transfers and exemption allocations to make sure that any future increases are allocated correctly. Enter on line 1 of Part 2 the maximum GST exemption you are allowed. This will not necessarily be the highest indexed amount if you made no generation- skipping transfers during the year of the increase. The donor can apply this exemption to inter vivos transfers (that is, transfers made during the donor's life) on Form 709. The executor can apply the exemption on Form 706 to transfers taking effect at death. An allocation is irrevocable. In the case of inter vivos direct skips, a portion of the donor's unused exemption is automatically allocated to the transferred property unless the donor elects otherwise. To elect out of the automatic allocation of exemption, you must file Form 709 and attach a statement to it clearly describing the transaction and the extent to which the automatic allocation is not to apply. Reporting a direct skip on a timely filed Form 709 and paying the GST tax on the transfer will qualify as such a statement.
Special QTIP election. If you have elected QTIP treatment for any gifts in trust listed on Schedule A, then you may make an election on Schedule C to treat the entire trust as non-QTIP for purposes of the GST tax. The election must be made for the entire trust that contains the particular gift involved on this return. Be sure to identify by item number the specific gift for which you are making this special QTIP election.
Enter on line 5 the amount of GST exemption you are applying to transfers reported in Part 3 of Schedule A. Section 2632(c) provides an automatic allocation to indirect skips of any unused GST exemption. The unused exemption is allocated to indirect skips to the extent necessary to make the inclusion ratio zero for the property transferred. You may elect out of this automatic allocation as explained in the instructions for Part 3 on page 9.
Notice of allocation. You may wish to allocate GST exemption with this return to transfers not reported on this return, such as a late allocation. To allocate your exemption to such transfers, attach a statement to this Form 709 and entitle it “Notice of Allocation.” The notice must contain the following for each trust (or other transfer):
Note.Where the property involved in such a transfer is subject to an ETIP because it would be includible in the donor's estate if the donor died immediately after the transfer (other than by reason of the donor having died within 3 years of making the gift), an allocation of the GST exemption at the time of the transfer will only become effective at the end of the ETIP. For details, see Transfers Subject to an Estate Tax Inclusion Period (ETIP) on page 3 and section 2642(f). You must enter in Part 3 every gift you listed in Part 1 of Schedule C. You are not required to allocate your available exemption. You may allocate some, all, or none of your available exemption, as you wish, among the gifts listed in Part 3 of Schedule C. However, the total exemption claimed in column C may not exceed the amount you entered on line 3 of Part 2 of Schedule C. You may enter an amount in column C that is greater than the amount you entered in column B. To compute the tax for the amount on line 3 (to be entered on line 4) and the tax for the amount on line 2 (to be entered on line 5), use the Table for Computing Gift Tax on page 12. If you are a citizen or resident of the United States, you must take any available unified credit against gift tax. Nonresident aliens may not claim the unified credit. If you are a nonresident alien, delete the $345,800 entry, skip line 8, and write in zero on line 11. Enter 20% of the amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977. (These amounts will be among those listed in Schedule B, column D, for gifts made in the third and fourth quarters of 1976.) Gift tax conventions are in effect with Australia, Austria, Denmark, France, Germany, Japan, Sweden, and the United Kingdom. If you are claiming a credit for payment of foreign gift tax, figure the credit on an attached sheet and attach evidence that the foreign taxes were paid. See the applicable convention for details of computing the credit. As a donor, you must sign the return. If you pay another person, firm, or corporation to prepare your return, that person must also sign the return as preparer unless he or she is your regular full-time employee.
Third-party designee. If you want to allow the return preparer (listed on the bottom of page 1 of Form 709, if applicable) to discuss your 2007 Form 709 with the IRS, check the “Yes” box to the far right of your signature on page 1 of your return. If you check the “Yes” box, you (and your spouse, if splitting gifts) are authorizing the IRS to call your return preparer to answer questions that may arise during the processing of your return. You are also authorizing the return preparer of your 2007 Form 709 to:
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