Although qualified gifts to qualified charitable organizations are deductible for gift tax purposes under IRC §2522, donors making certain types of gifts are required to file a federal gift tax return in order to claim the deduction.

As long as a return is not otherwise necessary to report non-charitable gifts, TRA '97 modified IRC §6019 such that an individual donor is NOT required to file a return if:

1. the value of the contributed portion qualifies for the annual gift tax exclusion under IRC §2503(b); or
2. the transfer qualifies for a gift tax charitable deduction under IRC 2522, and
   1. the transfer consists of the donor's entire interest in the property, and
   2. no other interest in such property is or has been transferred (for less than adequate and full consideration in money or money's worth) from the donor to a person, or for a use, not described in 2522(a) or (b), or
   3. the transfer is a qualified conservation easement under IRC 2522(d)

Under these rules, outright contributions are exempt, whereas all other forms of charitable gifts are required to be reported on a return, with the following exception:

Under section 2503(b), transfers of a "present interest" of $12,000 or less (2006 amount adjusted for inflation for transfers after 1998) are exempt from the filing requirement. Gifts of a remainder interest, such as transfers to charitable remainder trusts, pooled income funds, and gifts of a remainder interest in a personal residence or farm are considered gifts of a "remainder interest" and, therefore, do not qualify for the exclusion. Transfers via these vehicles require the filing of a return regardless of amount.

Transfers to charitable lead trusts, bargain sales, and gifts to charitable organizations in exchange for an immediate or deferred charitable gift annuity are considered gifts of a "present interest." Accordingly, provided the present value of the charitable component of the transfer does exceed the $12,000 annual exclusion threshold, a return is not technically required.

• Download 2006 Form 709
• Download 2006 Form 709 Instructions