Form 709: United States Gift (and Generation-Skipping Transfer) Tax Return Fundamentals

Get the essential information you need to file Form 709 and save your clients from future estate tax problems.

A significant challenge for estate planners, accountants and other professionals is the gift tax return. The challenge is born from the fact that the form itself is short and, therefore, appears simple. In reality, the form is complex and is often the culmination of calculated, intricate estate planning, including not only the gift tax exposure but also identifying the potential GST tax issues. Therefore, it is important to always consider the possibility of an audit during the preparation phase in order to be properly prepared to defend the gift tax return. There are several questions to contemplate: What if your gift tax return is selected for audit? Will it stand up to scrutiny? Will the value of the gift be upheld, if challenged? Will the value of the gift be increased? Will there be taxes due or interest and penalties? A gift tax return is the summary of the gift and memorializes the transaction. If the gift tax return is not properly prepared and filed, the value of the gift can fail, possibly causing transfer taxes and interest and penalties. It is important to understand when to file a gift tax return, what documents must be attached for substantiation, disclosure of zero gift tax transactions (sales to grantor trusts) and that a properly filed gift tax return will allow the statute of limitations to run. This topic will explain how to properly prepare a gift tax return with the appropriate exhibits for adequate disclosure, will enable you to advise your clients as to the scope of a gift tax return and the protection that a properly prepared gift tax return can afford, and give you and your client the peace of mind that the gift will not come back to haunt you in the future.

Faculty

John S. Erwin, Esq.

Erwin & Marcus, P.C.