IRS Releases 2010 Gift Tax Return

The IRS on March 18 released the final 2010 version of Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, and its instructions. The updated form reflects changes made by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312), which was enacted December 17, 2010. That act made several adjustments to the federal estate, gift and generation-skipping transfer (GST) tax system.

Among the changes reflected in the 2010 Form 709 are:

  • The annual exclusion for gifts made to spouses who are not U.S. citizens has increased to $134,000;
  • For 2010, the GST tax rate is 0%;
  • The unified estate and gift tax credit for 2010 is $330,800.

For 2010, the annual gift exclusion remains $13,000.

Under a provision of the 2010 Tax Relief Act, any unified credit allocated to gifts made in prior periods must be redetermined using the current gift tax rate. The instructions provide a worksheet for making this calculation, and the result is reported on Form 709, Schedule B, Gifts from Prior Periods.

Form 709 is due April 18, 2011, for gifts made in 2010. For donors who died during 2010, the executor must file the donor’s Form 709 by the earlier of:

  • The due date (including extensions) for filing the donor’s estate tax return, or
  • April 18, 2011, or the extended due date granted for filing the donor’s gift tax return.
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