Form 709 - Gift and Generation-Skipping Transfer Tax Return

Form 709, the "United States Gift (and Generation-Skipping Transfer) Tax Return," is not used for individual income tax returns. Instead, it is a separate form specifically designed for reporting gifts and generation-skipping transfers.

Here's a brief overview of its purpose:

Gift Tax: Form 709 is used to report gifts made during the tax year that exceed the annual exclusion amount. The annual exclusion allows individuals to give a certain amount of money or property to another person without triggering the gift tax. If the gifts exceed this annual exclusion, the donor is required to file Form 709.

Generation-Skipping Transfer Tax: This form is also used to report generation-skipping transfers. This tax is imposed on transfers of property that skip a generation, such as gifts or bequests to a grandchild when the child's parent is still alive.

Individuals who are subject to the gift tax (generally donors who make gifts exceeding the annual exclusion) or who make generation-skipping transfers are required to file Form 709. The form helps the IRS track and assess any gift or generation-skipping transfer tax that may be due.