1. Form 709 Gift Tax Return Presented by:
LEVI M. DILLON, Attorney/cpa Amy E. Ott, attorney/CPA
Bourland, Wall & Wenzel, P.C. The Blum Firm, P.C.
Attorneys at Law Attorneys at Law

2. The Unified Tax System Federal Transfer Taxes Gift Tax Estate Tax
Generation-Skipping Transfer (“GST”) Tax
Who is “Skip Person”
Family and Unrelated Persons
Unified Transfer Tax Credit (Applicable Amount)
Generation-Skipping Transfer Tax Exemption (“GSTTE”)

3. Reportable Gifts Definition of a “Gift”
Any transaction in which an interest in property is gratuitously passed of conferred upon another, regardless of means or device employed…”
Donative Intent
Unlimited Marital Deduction
Charitable Exemption

4. Reportable Gifts Continued…
Future Interest
> $15,000 per person per donee for 2018 ($14,000 for 2017)
> $15,000 to non-citizen spouse ($14,000 for 2017)
QTIP
Community Property Gift
Gift Split
Split Interest Gift
GSTTE Allocation other than default

5. Reportable Gifts Continued…
Gifts that do not seem like gifts
Debt Forgiveness
Loans at below-market interest rates
Insurance policy benefits
Annuity conversion to survivor annuity
Unqualified disclaimers
Transfers that seem like gifts but are not
Political Organizations
Educational Institutions for Tuition
Medical Institutions for Medical Care

6. Property Character & Gifting
Community Property vs. Separate Property
Split Gifts
Who Must File

7. Types of Gifts Gifts subject only to Gift Tax
Gifts subject to Gift Tax and GST Tax
Direct Skips
Gifts that may be subject to Gift Tax and GST Tax
Indirect Skips

8. Annual Exclusion Gifts
Gift of a Present Interest less than or equal to $15,000 ($14,000 for 2017)
Gifts to Trusts do not qualify UNLESS
Crummy Withdrawal Rights
5 & 5 Power
Hanging Power

9. Generation-Skipping Transfer Tax Exemption
Lifetime GSTTE
Annual Exclusion for GST Tax
Outright Gifts
Gifts in Trust
Planning point
Automatic Allocation
Order of Allocation
Direct Skips
Indirect Skips

10. Generation-Skipping Transfer Tax Exemption Continued…
Elections - Opting In/Opting Out
Direct Skip
If Elect to Opt Out, GST Tax Due
Indirect Skip
Opt Out – One Time
Opt Out – Forever
Opt In – Non-GSTTE Trust

11. Generation-Skipping Transfer Tax Exemption Continued…
Election Out Statement
Identifies Transferee Trust
Identifies Specific Transfer
Affirmative Language to Elect Out
Termination Statement
Formula Allocation Savings Clause
Impact of Late Allocation

12. Deceased Spouse’s Unused Exemption
Introduction to Portability the Deceased Spouse’s Unused Exemption (“DSUE”) Amount
Election on Deceased Spouse’s Form 706
Use of the DSUE Amount
Last Deceased Spouse
When is it Available
Order of Application

13. Valuation Part I – Full & Adequate Disclosure
Statute of Limitations
Full and Adequate Disclosure
Requirements
Safe Harbor
Audit Risk
Use of Appraisals in Audit

14. Valuation Part II – Formula Clauses
Valuation and Tax Reporting
Gift and Sale Scenarios
Types of Formula Clauses
Defined Value Gift
Use to ensure gift does not exceed remaining Unified Credit amount
Tips for Reporting
Purchase Price Adjustment in a Sale
To ensure no gift is made

15. Case Studies