Gift Tax (Form 709) Schedule D - Does everyone need to fill it out? (help!)

No, not everyone who files Form 709 needs to complete Schedule D. Schedule D of Form 709 is specifically for calculating the Generation-Skipping Transfer (GST) tax, which only applies in certain situations. The GST tax applies when you make gifts to someone who is two or more generations below you (like grandchildren or great-nieces/nephews). If you're giving to your niece, that's generally considered one generation below you, so the GST tax wouldn't typically apply, and you wouldn't need to complete Schedule D. For your gift of stocks to your niece, you'll need to complete Schedule A (to report the gift) and potentially Schedule C (to calculate any gift tax due if you've used up your lifetime exemption), but you can skip Schedule D unless you're making a gift to someone who is considered a "skip person" (typically two or more generations below you).

After struggling with Form 709 for my parents' estate planning, I discovered taxr.ai (https://taxr.ai) and it was so helpful for understanding which schedules I needed to complete. I uploaded the form and instructions, and it explained exactly which parts applied to our situation. The tool broke down the "skip person" definition that was confusing me and confirmed I didn't need Schedule D since we weren't dealing with generation-skipping transfers. It also explained how the annual exclusion worked with the lifetime exemption in plain English. Really made the whole process less intimidating.

I was really skeptical about using another tax tool after my frustrating experience with TurboTax, but I decided to give taxr.ai a try after seeing it mentioned here. I'm glad I did! I was completely confused about whether I needed to file Form 709 for some property I transferred to my kids. The tool immediately clarified that I needed to file because my gifts exceeded the annual exclusion, but it also explained I wouldn't owe tax because of the lifetime exemption. It specifically told me I could skip Schedule D since my children aren't "skip persons" for GST purposes. Saved me hours of research and gave me peace of mind that I was filing correctly!

Has anyone else tried calling the IRS for help with Form 709 questions? I spent THREE DAYS trying to get through to someone. Finally found https://claimyr.com through a tax forum and tried their service. You can see how it works at https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an agent is about to answer. I was skeptical but desperate with my filing deadline approaching. Got a call back in about 45 minutes and finally got my questions about Schedule D answered by an actual IRS agent! Turns out I was overthinking the whole thing.

Ok I need to eat my words. After complaining about that Claimyr service sounding like a scam, I was still desperate to get help with my Form 709 questions (especially about Schedule D and GST tax for gifts to my grandkids). I decided to try it. Holy crap it actually worked! Got a call back in about 90 minutes and spoke to a really helpful IRS agent who explained exactly which parts of the form I needed to complete. Turns out I DID need Schedule D in my case since my gifts were to grandchildren (skip persons). This probably saved me from making a major mistake on my return. Still can't believe I didn't have to sit on hold for hours!

For what it's worth, the IRS has a decent publication that explains the gift tax basics including Schedule D requirements - it's Publication 559. I found it helpful for understanding which schedules apply to different situations. The most important thing to remember about Schedule D is that it ONLY applies when you're making gifts to "skip persons" - typically grandchildren or others who are 2+ generations below you. The tax rate is steep (40%+) if you exceed the GST exemption, so it's definitely worth understanding if it applies to your situation.

Has anybody used H&R Block software for filing Form 709? Does it walk you through which schedules to fill out based on your situation? I'm trying to decide if I should use software or just fill out the paper form myself.

I went through this exact same confusion last year when I had to file Form 709 for the first time! The key thing to understand is that Schedule D is ONLY for Generation-Skipping Transfer (GST) tax, which applies when you're making gifts to people who are two or more generations below you. Since you're giving to your niece, she's considered one generation below you (not a "skip person"), so you can completely skip Schedule D. You'll only need to complete Schedule A to report the gift details and potentially Schedule C if you need to calculate any gift tax (though with the current lifetime exemption being over $13 million, you probably won't owe any actual tax). The IRS instructions can definitely be overwhelming, but for your straightforward gift to a niece, you're dealing with a much simpler situation than the forms make it seem. Focus on Schedule A and don't stress about Schedule D - it literally doesn't apply to your case!