IRS Form 709 – “What Transfers are Subject to Gift Tax?”

by Bruce Givner on July 20, 2012

The federal gift tax applies to any transfer by gift of real or personal property, tangible or intangible, made directly or indirectly, in trust, or by any other means.  It applies to free transfers as well as sales or exchanges not made in the ordinary course of business, where the value of the property received is less than the value of what is sold or exchanged.

The gift tax may apply when a general power of appointment - the holders of the power can appoint the property under the power to themselves, their creditors, their estates, or the creditors of their estate - is released or exercised.   It can also apply to forgiving a debt, to making an interest-free or below market interest rate loan, to transferring the benefits of an insurance policy, to certain property settlements in divorce cases, and to giving up of some amount of annuity in exchange for the creation of a survivor annuity.

The gift tax is due upon transfer.

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