When is a Statement to Donee of Basis Required to be Sent for a 709?

Understanding the Requirement for Sending a Statement of Basis to Donee for Form 709

When a donor in the United States makes a gift to a donee, they are required to report this gift to the Internal Revenue Service (IRS) using Form 709, also known as the Gift Tax Return. One important aspect of this reporting process is providing the donee with a statement of basis for the gifted property.

What is the Deadline for Sending the Statement?

A statement to the donee of basis for a 709 should be sent by the donor within 30 days after the gift tax return's due date, including extensions. The basis statement provides the donee with information about the donor's cost for tax purposes related to the gifted property.

Explanation of the Requirement

This requirement is essential for ensuring transparency in gift reporting and helps the donee understand their potential tax liability when they later sell or dispose of the gifted property. The IRS mandates that the statement of basis must be provided to the donee within 30 days after the due date of the gift tax return, which includes any extensions granted to the donor.

If the donor requests an extension to file their Form 709, the countdown for providing the basis statement to the donee starts from the extended due date. Typically, the due date for filing Form 709 is April 15th of the year following the gift transaction.

By sending the statement of basis in a timely manner, donors ensure that donees have the necessary information for accurately reporting the gift on their tax returns.