IRS Form 709

Form 709 IS a tax return. It's not an INCOME tax return, and it's not part of an income tax return. It's a gift tax return, which is completely separate from your income tax return. It is filed by itself, not together with your income tax return or any other return. The IRS instructions for Form 709 tell you where and when to file it.

Filing a gift tax return is somewhat uncommon. The rules are complicated, and it can affect your estate planning. If you are filing it now for 2019, you are filing late. (It's too soon to file for 2020.) Because of these complications, it might be a good idea to seek help from a tax professional or a lawyer who has experience with gift tax, estate tax, and estate planning.

Bob Sandler

Tks Bob. I want to distribute some IRAs and for various reasons and they build up over time. With a couple of kids, it doesn't take much to trigger a 709. You say "complications", wonder if Turbo or equal has them for filling out. I will be careful though.

bw

TurboTax is only for income tax. It does not include Form 709 for gift tax. I think you will find the same is true for all of the tax software that is marketed to individuals. The software that is used by tax professionals would generally include Form 709 or have it available as an add-on.

Bob Sandler

Remember that you are not allowed to assign income to another person for income tax purposes. So if money comes out of a traditional IRA, you will be the one who pays tax on it, not whomever you give the money to.

ww.asktax.org. >>

Realize tax implications on all traditional IRAwithdrawals, could trigger a higher Part B cost too

bw

Not just Part B. Part D also goes up if your AGI is too high.

Large distributions from Traditional IRAs increase the AGI which can trigger increased Medicare premiums (the IRRMA adjustment) in future years.

Dilip Sarwate

I don't quite understand how the number of kids figures into triggering the 709.

I would have thought that the more kids, the less likely you would run into the need for a gift tax return. Remember that the annual exclusion (currently $15,000) is for each pair of donor:donee. So if you were giving, say, a total of $45,000 to 2 kids ($22,500 each) you would need to file a return. But if you gave the same total to 3 kids ($15,000 each), then you would not.