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Mr Tax Tips
Mr Tax Tips, MS-Tax Graduate Student
Category: Tax
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Experience:  Masters of Taxation
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how do I fill out form 709 for a gift of real estate ...

Customer Question

how do I fill out form 709 for a gift of real estate using the unified tax credit
Submitted: 11 years ago.
Category: Tax
Expert:  Mr Tax Tips replied 11 years ago.
In 2001, every American received a "credit" against federal Estate and Gift Taxes of $220,550 which was equivalent to transferring $675,000 tax free to your heirs. And, if you were married, and your spouse (if an American) also used the $675,000, you may, as a couple, give $1.35 million to your heirs free of Estate Tax. Beginning in 2002, the amount you can pass tax free to your heirs increases from $675,000 in 2001 to $1.5 million in 2004 and then gradually to $3.5 million in 2009. In 2010, the estate tax (but not the gift tax) expires; in 2011, the estate tax again becomes effective at the 2002 exemption level for deaths occurring in 2011 and thereafter.

This credit is referred to as the "unified" credit because federal gift and Estate Taxation are integrated into one unified tax system. There is no Estate or Gift Tax on the first $675,000 (or the current "unified" credit level) in 2001 of your combined taxable gifts and transfers at death. You ante up when the sum reaches over $675,000 (or the current "unified" credit amount).

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