Gift Tax Form 709: Annual Exclusion, Gift Splitting, When to File

How much money can you gift without filing Form 709?

You can give each person up to $19,000 in a calendar year without filing Form 709. The limit is per giver, per person receiving: two parents can each give the same child that amount, and one parent can give that amount to each of five children. All your gifts to one person in the calendar year add up, and an unused part does not carry over to the next year. Once your gifts to one person pass the limit, you generally file Form 709, even when no tax is due: tax generally starts only after a much larger lifetime amount is used up (next section). 26 USC 2503(b); Form 709 instructions, Who Must File; Revenue Procedure 2025-32, section 4.42.

These rules cover a US citizen or a person domiciled (settled with no plan to leave) in the US. A noncitizen not domiciled in the US is taxed only on gifts of US real estate and other tangible property in the US, on Form 709-NA. IRS: Gift tax.

What makes a case not simple: a gift of real estate or a business interest (it needs a value you can support), a spouse who is not a US citizen, Forms 709 skipped in past years, a sale to family below value, and a giver who died during the year. Gather for each gift: the date, the amount or property, the person receiving it and how you are related, which account the money left and who owned it, and any appraisal.

If I give more than the annual exclusion, do I owe gift tax?

Generally not, unless your lifetime taxable gifts pass $15,000,000. The amount above the annual exclusion is a taxable gift that uses part of that lifetime basic exclusion, which gift tax and estate tax share. Once your lifetime taxable gifts pass it, tax is payable at rates up to 40%. IRS: What's new, estate and gift tax; 26 USC 2001(c).

Form 709 is how the IRS keeps the running total. Each return lists your earlier taxable gifts, and whatever exclusion your gifts use is no longer available to your estate at death. Form 709 instructions, Schedule B.

Who files Form 709 and pays, and does the person receiving the gift report it?

The giver files and pays. Each spouse files their own Form 709; there is no joint gift tax return. If the giver does not pay the tax when due, the person receiving the gift is personally liable for it up to the gift's value, and the tax is a lien on the gift for 10 years from the date the gifts are made. If the giver dies before filing, the giver's executor files. Form 709 instructions, Who Must File; IRS gift tax questions; 26 USC 6324(b).

A US person receiving a gift from a US giver files nothing for it: a gift is generally not income. Income the gift later earns, such as interest, dividends or rent, is taxable to the person receiving it. Publication 525, Gifts and inheritances. Gifts from someone abroad can require Form 3520; see Gifts and inheritances from abroad. The person receiving property generally takes over the giver's cost for a later sale, so selling gifted shares or a home can tax the giver's gain. 26 USC 1015(a). For the recipient's basis and exclusion when a gifted home is sold, see Home sale exclusion.

Gift splitting with your spouse: how does it work and who signs the Notice of Consent?

Gift splitting treats every gift either spouse makes to other people during the year as made half by each. That lets one spouse give up to $38,000 to one person under both spouses' exclusions. The giving spouse files Form 709, completes Part III and attaches a Notice of Consent signed and dated by the other spouse; when both of you must file, each of you signs one. The consenting spouse no longer signs the return itself. Form 709 instructions, Part III; 26 USC 2513.

Conditions and effects:

• You were married to each other when the gift was made and, if divorced or widowed later, did not remarry that year.
• Both spouses were US citizens or US residents at the time of the gift.
• The election covers all gifts both of you made to other people that year, not one gift.
• The IRS can collect the whole gift tax for that year from either of you.
• Consent can be given after the year ends, but not after April 15 after the gift year if either spouse filed by then; if neither had filed, it goes on the first return either files. It cannot be given after the IRS sends either spouse a notice of deficiency (its formal notice proposing more tax).

Both spouses generally file once they split. Only the giving spouse files if all gifts that year were ones the person could use right away, the giving spouse gave no one more than $38,000, and the other spouse either gave nothing or gave no more than $19,000 each to people the giving spouse did not give to. Gifts of community property, or of property you and your spouse own as joint tenants, are already gifts by each of you; community property counts as half from each, and each spouse files if their share calls for it. Form 709 instructions.

Do gifts to my spouse count?

Gifts to a spouse who is a US citizen are generally deductible in full (the marital deduction) and need no Form 709. The exception is a gift of certain limited interests, such as a life interest that ends when your spouse dies; that needs a Form 709. Form 709 instructions, Gifts to your spouse; 26 USC 2523.

Gifts to a spouse who is not a US citizen have no unlimited deduction. They instead get a larger annual exclusion of $194,000, for gifts the spouse can use now that would have been deductible had the spouse been a US citizen. Form 709 is required once your gifts to that spouse in the year pass that amount, or for any gift the spouse can use only later. Revenue Procedure 2025-32, section 4.42(2); 26 USC 2523(i); Form 709 instructions, Gifts to your spouse. See Married to a nonresident.

Paying someone's tuition, medical bills, rent, car loan or mortgage: which are gifts?

Only tuition and medical care paid directly to the school or provider escape the gift tax. Paying any other bill for someone, even straight to the landlord or lender, is a gift to that person and counts toward the annual exclusion. 26 USC 2503(e); Form 709 instructions, Transfers Not Subject to the Gift Tax; section 25.2511-1(c).

The tuition and medical exclusions apply whatever your relationship to the person and leave the annual exclusion free for other gifts.

Is adding someone to a joint bank account or a house title a gift?

Opening a joint bank account you can empty without the other owner's consent is not yet a gift. The gift happens when the other owner withdraws money for their own use, in the amount withdrawn without a duty to repay you. Form 709 instructions, Joint Tenancy; section 25.2511-1(h)(4).

Other property works differently. If you pay for property with your own money and take title jointly with someone, with a right of survivorship that either of you can end on your own, you have generally given them half its value at once. Deeding someone a share of a home you already own, for nothing, is a gift of that share's value. A spouse is the main exception: a gift to a US-citizen spouse is generally covered by the marital deduction. Section 25.2511-1(h)(5). For a home in Canada, see Transferring property to family.

Can I put five years of annual exclusions into a 529 plan at once?

Yes, by election on Form 709. If you contribute more than $19,000 for one person to a 529 plan in a year, you can elect to treat up to five times the annual exclusion as made evenly over five years, starting that year. 26 USC 529(c)(2); Form 709 instructions, Line B.

• You must file Form 709 for the contribution year to make the election, by checking the box at line B of Schedule A and attaching a statement of the total contributed, the amount elected and the beneficiary's name.
• In the next four years, you report that year's fifth only when you otherwise have to file. Other gifts to the same person in those years stack on top of it.
• A 529 contribution does not qualify for the tuition exclusion.
• Spouses who split gifts treat half the contribution as each spouse's; each then decides on the election for their half.
• If you die before the five years end, the part assigned to the years after death is counted in your estate. 26 USC 529(c)(4)(C).

I sell a house or shares to family for less than they're worth: is the difference a gift?

Yes. A sale for less than full value is a gift of the difference between what the property is worth and what you receive. Love and affection do not count as payment. Only a genuine arm's-length deal in the ordinary course of business is treated as full value. Section 25.2512-8; IRS: Gift tax.

The sale side has its own income tax: you have a taxable gain if the price you receive is more than your cost, but you cannot claim a loss on a part-gift sale. Section 1.1001-1(e). Support the value with a qualified appraisal or a detailed explanation of the method; the IRS's assessment clock starts only for a gift adequately disclosed on Form 709. A below-market or forgiven family loan can also be a gift; see Giving money or shares to family abroad for the gift-or-loan question.

When is Form 709 due, and how do I get more time?

Form 709 is due April 15 after the gift year, or the next business day if that falls on a weekend or legal holiday. It is a separate return from Form 1040 and can be e-filed. Form 709 instructions, When To File; IRS gift tax questions.

I skipped a required Form 709 in an earlier year: does it matter if no tax was due?

It can, even when no penalty applies. The late-filing and late-payment penalties are a percentage of unpaid tax, so a year with no tax due generally produces none. Two things still matter. With no return filed, the IRS can assess gift tax on those gifts at any time; the 3 years after the return is filed limit starts only for gifts adequately disclosed on a filed return. And every later Form 709, and the estate tax return at death, depends on the running total of earlier taxable gifts. 26 USC 6501(c); Form 709 instructions, Adequate Disclosure and Penalties.

The usual fix is a Form 709 for each missed year, on that year's form, earliest first. Use values at the gift date; for real estate or private shares, get a retrospective appraisal. Spouses who never filed for a year can still elect gift splitting on the first return either files, unless the IRS has sent a notice of deficiency. If a return you filed was wrong, file another Form 709 marked as amended, with a statement of what changed and a copy of the original. 26 USC 2513(b); Form 709 instructions.

Example

Illustrative amounts in US dollars, using the figures shown on this page. No giver has made earlier taxable gifts.

Both parents help with a down payment

Two parents give their daughter $50,000 from a joint account they own equally, so each parent gives $25,000. Each gift is $6,000 above the $19,000 annual exclusion, so each parent files Form 709, listing $25,000, excluding $19,000 and reporting $6,000 as a taxable gift. No tax is due; each parent's lifetime exclusion falls by $6,000. Had the money come from one parent's own account, electing gift splitting would give the same result, and both would still file because $50,000 is more than $38,000.

Front-loading a 529 plan

A grandmother puts $90,000 into her grandchild's 529 plan and elects on Form 709 to spread it over five years: $18,000 a year, under the annual exclusion, so none of her lifetime exclusion is used. The return is still required to make the election. If she also gives the grandchild $5,000 in cash in the second year, that year's gifts total $23,000: she files again, and the $4,000 above the annual exclusion is a taxable gift that reduces her lifetime exclusion.

Tuition versus a car loan

An uncle pays his nephew's $30,000 tuition straight to the university and also pays off the nephew's $30,000 car loan. The tuition is outside the gift tax and is not reported. The car-loan payment is a gift $11,000 above the annual exclusion, so he files Form 709. Had he sent the tuition money to the nephew instead, the gifts would total $60,000.

Different for you?

• You send money or shares to family abroad, support parents abroad, or call a down payment a loan: see Giving money or shares to family abroad, which also covers years of missed Forms 709 for those gifts.
• Family abroad gives or leaves you money: see Gifts and inheritances from abroad.
• You received a home as a gift and plan to sell it: see Home sale exclusion.
• The giver has died: estate tax and the returns after a death are in Estate and final returns for an executor.
• You are giving property or adding family to a title in Canada: see Transferring property to family.
• You live in Connecticut or give real estate or other tangible property located there: if you must file a federal Form 709, Connecticut may also require its own gift tax return, even when no state tax is due. See Connecticut DRS.
• You gave real estate or a business interest, skipped Forms 709, have a spouse who is not a US citizen, gave to grandchildren above the exclusion, or are filing for a giver who died: these need valuation and judgment; get individual tax help with the gift dates, amounts, recipients, account owners, appraisals and any earlier Forms 709.