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Back to the Basics: Common Gift Tax Return Mistakes


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  • Donors report gifts subject to the gift tax and gifts subject to the generation-skipping transfer (GST) tax on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return. The proper reporting of gifts on Form 709 depends on a number of factors, including the type of gift, who the gift is given to, and whether the gift is being split between spouses.
  • A donor who makes a gift or gifts of present interests in property in excess of the annual exclusion amount ($13,000 in 2009 and 2010) must generally file Form 709. For gifts other than present interests in property, the donor must generally file Form 709 regardless of the amount of the gift.
  • Outright gifts and certain gifts in trust by a donor to his or her spouse (where the spouse is a U.S. citizen) are not subject to the gift tax and are not required to be reported on Form 709. Gifts to charity are generally not subject to the gift tax but must be reported on Form 709 if they are made in the same year the donor makes taxable gifts that must be reported.
  • Payments to Sec. 529 plans qualify for the annual gift tax exclusion and are not subject to the GST tax. Donors may elect to spread a gift to a Sec. 529 plan over a five-year period.

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