Does Form 709 (gift tax return) have to be filed for investments transferred to an irrevocable trust with a separate tax ID number?

by Elizabeth W. Kidd, CPA | Nov 02, 2018

My dad transferred his investments, his residence, and life insurance (total in excess of $250,000) to an irrevocable trust in 2018. The trust has a separate tax ID number, and he will file a Form 1041 and Form K-1 appropriately. Does he also have to file Form 709 for 2018?

The terms of the trust will determine if a gift tax return is required. This is a question that cannot be answered without careful reading of the trust. The various items that determine income and gift taxation of trusts are complex and outside the scope of questions that can be answered in this forum. Major treatises have been written on the issues involved and the potential for unexpected consequences.

You should consult the tax and legal professionals who assisted in setting up the trust. If you did not consult one prior to doing so, you should at this time to avoid surprises in the future.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Elizabeth W. Kidd, CPA, is a retired accounting instructor in Erie, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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