In addition to filing your annual income tax return, you may, under certain circumstances, be required to file a Federal Gift Tax Return.
The federal gift tax, if applicable, is imposed on the individual making the gift (the donor). For each calendar year in which you are liable for gift tax on gifts you made during the year, you must file a Federal Gift tax return on Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return.
In addition, you Must File a Gift Tax Return – whether or not any federal gift tax is ultimately due – if:
(1) you gave gifts to at least one person (other than your spouse) that are Greater than the Annual Exclusion amount for the year,
(2) you and your spouse are Splitting a Gift (that is, treating the gift as made one half by you and one half by your spouse);
(3) you gave someone (other than your spouse) a Gift of a Future Interest in property; or
(4) you gave your spouse of a Terminable Interest in Property.
Only Individuals are Required to File Gift Tax Returns. If a trust, estate, partnership, or corporation makes a gift, the individual beneficiaries, partners, or shareholders are considered donors and may be liable for the gift tax.
A Nonresident Alien Individual who made a Gift subject to gift tax must file a gift tax return if:
(1) the individual gave any Gifts of Future Interests;
(2) the individual’s gifts of present interests to any donee other than the individual’s spouse total more than the Annual Exclusion amount; or
(3) the individual’s outright gifts to his or her spouse who is Not a U.S. Citizen Total more than the Annual Exclusion amount for such gifts.
Form 709 is an annual return and is filed on a calendar-year basis. Generally, you must file the Form 709 by April 15 of the year following the year of the gift. When the due date for filing a gift tax return falls on a Saturday, Sunday, or legal holiday, the due date is delayed until the next business day. The term “legal holiday” includes the legal holidays in the District of Columbia.
There are two ways you can extend the time to file the gift tax return. An extension of time granted for filing your federal income tax return for the year of the gift will also automatically extend the time to file your gift tax return for that year. If you do not request an extension for your income tax return, you may use Form 8892, Application for Automatic Extension of Time to File Form 709 and/or Payment of Gift/ Generation-Skipping Transfer Tax, to request an automatic six-month extension of time to file your federal gift tax return. Neither of these methods for requesting a filing extension extends the time to pay the gift taxes.
If you are required to file a Gift Tax Return, you must also give each gift recipient named on the return a written statement that:
(1) identifies you (the 709 Tax Return Filer), and
(2) provides the information about property received by the gift recipient that is specified in the return. You must provide this statement no later than 30 days after the date you file the Gift Tax Return.
Please call me so we can discuss whether gifts you have made (or plan to make) are subject to Federal Gift Tax Gift Tax, and whether you are required to file a federal gift tax return to report any gifts you have made.
Please contact the office of Don Fitch Accountancy at (760)567-3110 or Email Don.Fitch@CPA.com if you have any questions or would like additional information.
DON FITCH, CPA
74478 Highway 111 #3
Palm Desert, CA 92260
Toll Free: (877)CPA-Help or (877)272-4357
P.S. My firm is based upon referrals. Please feel free to refer my firm to anyone you know that is looking for a new CPA and/or tax preparer. Thank you in advance.
(Updated 06252021-1 321-160)