Monday, October 15, 2012

In late September, the Service posted on the IRS website the new Draft Form 709 for reporting 2012 gifts and Draft Instructions for the Form 709.  This new form has also been updated to address the deceased spousal unused exclusion (“DSUE”).  A new Line 19 has been added to Part 1 – General Information, asking whether the taxpayer has applied DSUE from a deceased spouse on this or any other Form 709.  If so, the taxpayer is directed to complete a new Schedule C to determine the available DSUE, which is then included on Line 7 of Part 2 – Tax Computation as part of the maximum applicable credit amount.  The Generation-Skipping Transfer Tax computation is now on Schedule D.

It is important to note the caution at the beginning of these drafts:

“This is an early release draft of an IRS tax form, instructions, or publication, which the IRS is providing for your information as a courtesy.  Do not file draft forms.  Also, do not rely on draft instructions and publications for filing.”

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