2025 Changes to IRS Form 709

What you need to know

This is a continuation of the series on preparing Form 709. For the first article in this series and a series index, click here.

Table of Contents

1. Video

2. Introduction

3. Updated Filer Information

4. Updated Gift-Splitting Procedure

5. Expanded Schedule A Gift Descriptions and Elections

   1. Donee and Gift Descriptions

   2. GST Elections

   3. Marital and Charitable Deductions – New Box to Check

   4. Reverse QTIP Election – New Box to Check

6. Schedules B, C and D

7. Conclusion

8. Bonus Materials (for paid subscribers only)

   1. Partial QTIP and Reverse QTIP

   2. Gift-Splitting Consent Statement

   3. GST Tax Election Statements

Video

Introduction

The gift tax return, IRS Form 709, has not significantly changed in format for several years. The PDF form itself, when downloaded from the IRS website, is unwieldy given the complexity of gift descriptions that are commonly recommended. And, while e-filing is available for many forms, this option has not yet been extended to Form 709.

However, the 2024 Form 709 contains significant format changes, starting for gifts made in 2024. While this article is not a complete discussion of these changes and their implications, it covers some of the high points including:

• Updated information disclosures for filers in foreign countries;

• Updated gift-splitting election format;

• Changes to the format and layout of Schedule A, Parts 1-3;

• Updated procedures for claiming gift tax marital and charitable deductions; and

• Updated procedures for reverse QTIP elections.

It is always important to follow the Instructions for Form 709 published by the IRS, and this article is not designed to replace or substitute for these instructions. But, without further adieu, let’s dive in.

As a supplement, visual examples of the changes can be found in the video above. And, bonus materials for paid subscribers are available at the end of this article. (Please do not access the bonus materials unless you are a wealth transfer professional who is licensed to prepare Form 709 for clients. These bonus materials are provided for educational purposes only, and are not intended to substitute for legal or tax advice nor for the exercise of independent judgment and review.)

Updated Filer Information

Previously, Part 1 the Form contained a small address box on Line 4 along with separate small box for all city/state, country, and zip or postal code information on Line 6. It was easy to run out of space using these lines.

But, the address information for the filer has been reformatted to provide additional space while requiring additional information for filers in foreign countries. Previously, especially for foreign filers or those with an apartment number, this information had to be jammed into the aforementioned Lines 4 and 6. Now, in addition to a stand-alone box for an apartment number on Line 5, we have boxes specific to the filer’s foreign country of domicile, foreign province/state/county, and foreign postal or zip code on Lines 9, 10, and 11, respectively.

The legal residence and citizenship boxes, to accommodate for the extra space, have been moved to Lines 12 and 13, respectively.

Updated Gift-Splitting Procedure

For years, Lines 12-18 of Part 1 were dedicated to the gift-splitting election and relevant information – including a requirement of the consenting spouse’s signature on Line 18.

However, the gift-splitting election has now been given its own separate Part III, found on page 2 of the Form.

In addition, the procedure for gift-splitting has changed. Instead of a simple signature of the consenting spouse on the Form 709 itself, the Form 709 Instructions now require a separate Notice of Consent to be signed and dated by the consenting spouse. In addition, if both spouses are required to file Form 709 for split gifts (usually meaning each spouse has one or more gifts over the annual exclusion even with splitting or any gifts of future interests), then each spouse must sign and date a Notice of Consent on the other spouse’s Form 709.

The requirement of dating the Notice of Consent is emphasized in the instructions. The basic requirements for the gift-splitting election dictate that the election cannot be made after April 15 or, if later, after the filing of the first-filed Form 709 by either spouse. Accordingly, these dating requirements are emphasized on the instructions for the Notice of Consent. Per the instructions, the Notice of Consent can be dated after the close of the calendar year in which gifts occurred but it is not clear whether this is a firm requirement (i.e., that the Notice of Consent cannot be dated before January 1 of the year after the year of the gift).

A sample Notice of Consent is included in the bonus materials for subscribers at the bottom of this article.

Expanded Schedule A Gift Descriptions and Elections

As mentioned above, attempts to fill in gift descriptions using the PDF form for the 709 provided by the IRS were often futile. Many preparers would elect to instead attach continuation statement(s) for each relevant Part of Schedule A, and create (through preparation software or forms) a more user-friendly form containing the relevant columns of Schedule A that, perhaps, can be more easily replicated in landscape orientation (based on the IRS form) in Excel.

Donee and Gift Descriptions

In particular, gift descriptions (which required name, address and tax ID of the donee, relationship to donor, description of gifted property, and CUSIP nos. for any transferred securities positions) all had to fit in Column B of the old Form 709.

However, Schedule A has now been rotated to a landscape format. Additionally, the (1) donee’s name and address (and tax ID or EIN, presumably), (2) the donee’s relationship to the donor, and (3) the gift description all get split out into their own respective Columns B, C, and D. (The author personally feels that Column D for the gift description is much too narrow, which leads to problems with complex gift descriptions, CUSIPs, descriptions of valuation methods, references to attachments, and election statements that were often included in this consolidated column on the old form.)

GST Elections

And, while Column C of the old form (for Parts 2 and 3) typically contained the box to check for an election out of automatic allocation, and (for indirect skips) a GST trust election or termination of a prior election, this election has now been moved to Column J (for Part 2, direct skips) and Column N (for Part 3, indirect skips).

One item that has not changed is the inclusion of an election statement as a separate attachment for GST elections for indirect skips on Part 3. The election statement requirement also applies to Part 2 – direct skips – even though, functionally, Part 3 of Schedule D traditionally serves this function. For those preparers who included this statement (protectively or otherwise) in the gift description, this is perhaps the one drawback to the new form – a relatively-narrow gift description column. If this has been your practice traditionally, it may be a good idea to start including a separate election statement. Some sample forms for affirmative elections have been included in the bonus materials for subscribers below.

Marital and Charitable Deductions – New Box to Check

And, as seen in Parts 1 and 3, the marital deduction and charitable deduction are now claimed by checking a box in Columns K and L. These deductions are still reconciled as before on Lines 4 and 7 of Schedule A, Part 4, but the checked boxes now replace the need to list out the item numbers of gifts qualifying for these deductions.

There is no change to the QTIP election on Schedule A, Part 4, other than the requirement on Part 1 or 3 to check the box to claim a marital deduction. As with the prior form, however, a partial QTIP election is not easy to track based on the new form as it still just requires the inclusion of a lesser dollar value than the eligible transfer on an item-by-item basis on Part 4, Line 4. In order to prevent confusion, including the dollar value of the QTIP-elected amount in the gift description on Part 1 or 3 may be a helpful addition.

For now, note that checking these boxes for each item will be an important element of completing Form 709. Preparers who miss this new requirement may find themselves having to amend gift tax returns, or obtain relief from the IRS to correct the error.

Reverse QTIP Election – New Box to Check

That being said, we also find a new Column on Parts 1 and 3 – Column M – with the heading “2652(a)(3) election.” This is known as the “reverse” QTIP election for GST tax purposes, to cause the donor (instead of the donor’s spouse) to be the GST tax transferor of QTIP-elected property. Previously, this election was made on Schedule D, Part 2, by checking a box and listing line items. Generally, no partial reverse QTIP election is permitted – it must apply to all QTIP-elected property. But, in the case of a reverse QTIP election for line items under which a partial QTIP election was made, it may also be helpful to notate in the gift description (as mentioned above) that the reverse QTIP election specifically applies to that dollar value.

Sample language to this effect has been included in the bonus materials for subscribers below.

Schedules B, C and D

As with Schedule A, Schedules B, C and D have been rotated to a landscape orientation with a more Excel-friendly format for listing out information. There do not appear to be any significant changes to the columns or other required information from these Schedules. However, as noted above, Part 2 of Schedule D no longer contains the reverse QTIP election by virtue of moving it to Schedule A, Parts 1 and 3.

Conclusion

As mentioned, some bonus materials are included below. For now, however, the changes the format of Form 709 will change the procedures many preparers follow with respect to gift tax returns. This will also require updates to tax preparation software, which may be slower to adapt some of these changes when compared to more frequently-used forms. And, for the time being, e-filing is not yet an option for transfer tax returns.

But, if you are a wealth transfer professional with questions on navigating Form 709 for your clients, please reach out.

Bonus Materials