readily identified. ‘Thus, a legal. description should be given of
each parcel of real estate, and if located in a city the name of
street and number, its area, and, if improved, a short statement
of the character of the improvements. Description of bonds
should inefude the number transferred, principal amount, name
of abligor, date of maturity, rate of interest, date or dates on
whieh interest is payable, series number where there is more than
one issue, the exchange upon which listed, or the principal busi-
ness office of the corporation, if unlisted. ’ Descriptions of stocks
should include number of shares, whether common or preferred,
and, if preferred, what issue thereof, par value, quotation at
which returned, exact name of corporation, and, if the stock is
unlisted, the location of the principal business cflice and State in
which incorporated and the date of incorporation, If @ listed
security, state principal exchange upon which sold. In describ-
ing an interest in property based on the duration of a person's
fife, the date of birth of that person should be stated. Deserip-
tion of life insurance policies should give the name of the insurer
and the number of the policy.

42. Date of valuation of property.—If the gift is made in prop-
erty other than money, such property is valued as of the date of
the gift.

43, Supplemental documents.—For every policy of life insur-
ance listed on the return, the donor must procure a statement by
the company on Form 938, revised, and file it with the District
Director. If the gift was made by means of a trust, a certified
or verified copy of the trust instrument must be submitted. In
the case of stock of close corporations or inactive stock (which
should be valued on the basis of net worth, earning and dividend
paying capacity, and other relevant factors), there must be sub-
mitted balance sheets, particularly the one nearest the date of
the gift, and statements of the net earnings or operating results
and dividends paid for each of the 5 preceding years. Any other
documents, such as appraisal lists, required for an adequate
explanation, should be filed with the return. For example, where
the gift consists of real estate, a copy of the appraisal, if avail-
able, should be submitted; otherwise full information as to the
basis of the valuation used should be set forth under Schedule A.

14. Deductions for charitable, public, and similar gifts—The
values of all charitable, public, and similar gifts listed.on Sched-
vle A should be totaled, the total exclusions claimed on Schedule A
with Paci to such gifts deducted, and the balance entered at
tine a

For information as to deductions authorized for charitable,
public, and similar gifts, which may be claimed under this Sched-
‘ule, consult the Gift Tax Regulations.

15. Marital deduction.—In determining the amount of the tax-
able gifts for the calendar year may be deducted, if the donor
was a citizen or resident of the United States at the time the gift
was made, an amount equal to one-half the value of any property
interest (except as otherwise indicated below) transferred by gift
to'a donee who at the time of the gift was the donor’s spouse.
Where the included amount of the gifts to the donee spouse, as
reflected in the “Total included amount of gifts for year,” line g,
is less than one-half the total value of the gifts to such spouse,
the deduction is allowable only to the extent of such included
amount.

For the purpose of the marital deduction, a property interest,
whether or not in trust, is considered as having been transferred
by the donor to his spouse as donee (and to no other person), if
(a) she is entitled for life to all of the income from the entire
interest; (b) such income is payable annually or at more frequent
intervals; (c) she has the power, exercisable in favor of herself
or of her estate, to appoint the entire interest; (d) such power is
exercisable by her alone and (whether exercisable by will or dur-
ing life) is exercisable by her in all events; and (¢) no part of
the entire interest is subject to a power in any other person to
appoint any part thereof to any person other than the surviving

use. Where the foregoing five conditions are satisfied only
th respect to a specifie portion of the entire interest, see the
vegulations under section 2528 (e) of the Internal Revenue Code
for the determination of the portion thereof which qualifies for
the marital deduction.

Where the income from property is made payable to the donor
or a third party for life, or for a term of years, with remainder
absolutely to the donor's spouse or to her estate, the marital
deduction is equal to one-half the present value of the remainder.

The marital deduction is generally not allowable where the
interest transferred to the donee spouse was a “terminable inter-
est.” The expression “terminable interest” refers to a life
estate, an estate for years, or any other property interest which,
upon the lapse of time, upon the occurrence of an event or con-
tingency, or upon the failure of an event or contingency to occur,
will terminate or fail. If the interest is transferred to the donee
spouse as sole joint tenant with the donor or as tenant by the
entirety, the interest will not be considered a “terminable inter-
est” solely by reason of the possibility that the donor may survive
the donee spouse, or that there may cecur a severance of the
tenancy. The marital deduction also is not allowable where
the property was held as “coramunity property.” The term
“community property” as used for this purpose includes property

held as community property (as defined in the Gift Tax Regula-
tions), separate property acquired by the donor as a result of a
conversion, after December 31, 1941, of property then held by him
and the donee spouse as community property, and property ac~
quired by the donor in exchange for such separate property.

16, Speciiic exemption.—In determining the amount of the tax-
able gifts for the calendar yea there may be deducted, if the donor
was a citizen or resident of the United States at the time the gifts
were made, a specific exemption of $30,000 less the sum of the
amounts claimed and allowed as an exemption in prior calendar
years. The exemption, at the option of the donor, may be taken
in its entirety in a single year, or be spread over a period of years
in such amounts as he sees fit, but after the limit has been reached
no further exemption is allowable. A donor who was @ non-
yesident not a citizen of the United States at the time the gi
were made is not entitled to this exemption, :

17. Schedule B; gifts made during preceding calendar years
(subsequent to June 6, 1932).—Gift tax returns, Form 709, filed
for preceding years subsequent to June 6, 1982, should be indi-
cated in Schedule B, The donor’s name used in each return filed
for preceding years should be shown in Schedule B where there
has been a change in name in this or any prior retur
variation such as the use of full given names instead o! is
should also be indicated. The correct amount of the taxable gifts
for each prior year during which gifts were made (the amount
finally determined), and not necessarily the amount returned in
the prior case, should be entered in the last column; and the
amount of the specific exemption claimed and allowed for each
such prior year should be entered in the third column. Enter at
line b any amount by which the total specific exenzption claimed
and allowed for preceding years (line a) exceeds $30,000. Any
amount entered at line b should be added to the amount entered
in the last column at line a, and the sum thus obtained should be
entered at line ¢. The amount shown at line cis the “Total amount
of taxable gifts for preceding years” computed for the purpose of
this return, and should be carried forward to item & under “‘Com-
putation of tax” on the first page of the return.

18. Computation of tax.—Enter at item 1 under “Computation
of tax” the amount of the taxable gifts for the year. Enter at item
2 the total amount of taxable gifts for preceding years, if any,
taken from line c of Schedule B. Enter at item 3 the sum of item1
and item 2, Compute the tax on item 3 in accordance with the
“Table for computing gift tax” and enter the result obtained at
item 4. Compute the tax on the total amount of taxable gifts for
preceding years, if any (item 2), in accordance with the table and
enter the result obtained at item 5. Then subtract item 5, the tax
computed on the total amount of taxable gifts for preceding
years, from item 4, the tax computed on the total taxable gifts,
and enter the difference at item 6, which is the tax on taxable gifts
for the year. This latter amount should be paid to the District
Director.

19. Declarations.—In addition to the taxpayer’s declaration, if
the return was prepared by another, the second declaration
should be executed by the person preparing the return,

20. Gift tax regulations.—For further instructions consult the
Gift Tax Regulations, a copy of which may be obtained from the
District Director of Internal Revenue.

21. Gift tax treaties——Gift tax conventions with Australia
(effective December 14, 1953) and Japan (effective April 1, 1955)
authorize a credit in the case of doubly taxed gifts and contain
rules governing the situs of property. The conventions also
provide a prorated specific exemption for certain nonresident
alien donors. For specific information, consult the applicable
convention.

TABLE FOR COMPUTING GIFT TAX

2y

(A) (B) Rate of tax
on excess
Amount of Amountof | Taxon amount over
taxable gifts taxable gifts | in column (A) amount in
equaling— not exceeding— column (A)
| Percent

22
i Eris
| 26%
| . 2th
$17,400.00 Ft
396,150.00 33
i 564,900.00 36:
748,650.00 gost
i 947,400.00 42
| 1,157,400.00 44%,
| Us78'650.00 a7
| 1,851,150.00 50!
2,358, 650.00 52
| 878,650.00 54
8,426,150.00 57
| 41566'150.00 57%,

16—-87580-10 _U. 5. GOVERNMENT PRINTING OFFICE


orm 109 UNITED STATES | Do not write

space below

ves aU AP De erent GIFT TAX RETURN Serial No.
_UNtennat REvENUs Ssavice (Applicable to Calendar Year 1955 and subsequent calendar years)

istriet Dit
Cree evED CALENDAR YEAR 19......

(To he executed and filed with the District Director of Internal Revenue for the donor's district
AFTER the close of the calendar year and not later than the 15th day of the following April)

i
|
|
Donon (Given name, middle name or initial, surname) y |
Appness |

REesweENce Crnzensmr |

‘A. Have you (the donor), during the calendar year indicated above, without an adequate and full consideration in money or money's
worth, made any transfer exceeding $3,000 in value (or regardless of value if a future interest) as follows? (Check whether “Yes”
or “No.”)

1, By the creation of a trust [] Yes ©] No or
the making of additions to a trust previously created [] Yes 1] No
jm.either case for the benefit of a person or persons other than yourself, and with respect to which you retained no power to revest the
beneficial title to the property in yourself or to change the beneficiaries or their proportionate benefits; or by relinquishing every such
power that was retained in a previously ereated trust. [} Yes [| No

2. By permitting a beneficiary, other than yourself, to receive the income from a trust created by you and with respect to which you
retained the power to revest the beneficial title to the property in yourself or to change the beneficiaries or their proportionate
benefits, (] Yes [No

3, By the purchase of a life insurance policy [1 Yes [1] No or
the payment of a premium on a previously issued policy [] Yes [J No, the proceeds of which are in either case payable to a
beneficiary other than your estate, and with respect to which you retained no power to revest the economic benefits in yourself or
your estate or to change the beneficiaries or their proportionate benefits; or by relinquishing every such power that was retained
in a previously issued policy. ) Yes 1 No

4, By permitting another to withdraw funds from a joint bank account which were deposited by you. [1] Yes [] No

5. By conveying title to another and yourself as joint tenants. [] Yes 1 No

6. By conveying title to your spouse and yourself as tenants by the entirety or as joint tenants with right of survivorship. [] Yes
CI No If “Yes,” see section 8 of the instructions,

7, By the exercise or release of a power of appointment, except as provided in the Gift Tax Regulations. [] Yes 1 No

8. By any other method, direct or indirect. [] Yes © No

If the answer is “Yes” to any of the foregoing, such a transfer (other than the creation of a joint tenancy with your spouse in real
property with right of survivorship, or addition thereto, which you do not elect to treat as a gift) should be fully disclosed under
Schedule A.

B. Gifts of husband and wife to third parties.—Do you consent to have the gifts made by both you and your spouse to third parties
during the calendar year considered as having been made one-half by each of you? [] Yes 1 No (See section 7 of instructions.)
If the answer is “Yes” the following information must be furnished and the consent shown below signed by your spouse.

“4: Name of ‘apouse -_
2. Were you married during the entire calendar year? [] Yes [1] No

3. If the answer to 2 is “No,” check whether [] married, [] divorced, or [] widowed. Give date ~
4, Willa gift tax return for this calendar year be filed by your spouse? [] Yes (1 No

CONSENT OF SPOUSE

I tonsent to have the gifts made by both me and my spouse to third parties during the calendar year considered as having been made
one-half by each of us.

COMPUTATION OF TAX (See section 18 of instructions)

1, Amount of taxable gifts for year (line j, Schedule A) ........e0eeeeee eens eee
2, Total amount of taxable gifts for preceding years (line c, Schedule B) ............0c0c0eeseeeeuenenenes
3. Total taxable gifts (item 1 plus item 2) i
4. Tax computed on item 3.........--.0eeeeeee ee eeee
5. Tax computed on item 2.......... eee eee eee eee

6, Tax on taxable gifts for year (item 4 minus item 5).....

I declare under the penalties of perjury that this return (including any accompanying schedules and statements) has been examined
by me and to the best of my knowledge and belief is a true, correct, and complete return.

(Signature of person, other than ta:

(Address of person preparing return)

(Date)


SCHEDULE A—Total Gifts During Year and Computation of Taxable Gifts

= DESCRIPTION OF GIFT, AND DONEE'S NAME AND ADDRESS

DATE OF | VALUE AT DATE OF
‘NO. GIFT Grr

$

(a) Total gifts of donor...........0.08
(%) Less portion of items -. ...- reported by spouse (see section 10 of instructions).......+.

fe) Balance........ 0... cee eeceeeeeeetee eee ees seeeeeees

(d) Gifts of spouse to be included (from line 6 of spouse’s return) (see section 10 of instructions)........+.|

(e) Total gifts for year... ee ceee eee cee eee ee ee cece esse et eee een eeeeerne seeneeeeseeeeanegs ree
(f) Less total exclusions not exceeding $3,000 for each donee (except gifts of future interests)...... seeee

{g) Total included amount of gifts for year... 0.60.0... ceceeceeneceeceeeeeceeeeeeeeeees veveeeeee! Bee

{h) Deductions (see sections 14, 15, and 16 of instructions) :

(1) Charitable, public, and similar gifts (based on items
exclusions) ......06ee0e08 ben eenes bones

(2) Marital deduction (based on items -..

(8) Specific exemption claimed.......... tee cees se eeeeeeeerene See eeeeeneecnces
i) Total deductions (total of lines 1,2, and 8).........ccccee cece eee e etna eae: +}
(J) Amount of taxable gifts for year (line g minus linei)..... sete teeeeeeeeeeeeeees $ __
SCHEDULE B—Returns, Amounts of Specific Exemption, and Taxable Gifts for Preceding Years (subsequent to June 6, 1932)
CALENDAR INTERNAL REVENUE DISTRICT IN WHICH PRIOR RETURN WAS FILED SPEC G DERE TION TA os
$ $

(a) Totals for preceding years (without adjustment for reduced specific exemption) . | $
(3) Amount, if any, by which total specific exemption, line a, exceeds $30,000 (see section 17 of instructions) ..

(c)___ Total amount of taxable gifts for preceding years (total, last column, line a, plus amount, if any, line 6) .| $

(If more space is needed, attach additional sheets of same size) 16—B7580-10 _U, 6, GOVERNMEKT PRINTING OFFICE



INSTRUCTIONS FOR U. S. GIFT TAX RETURN, FORM 709 (Revised Apr. 1955)

1, Requirement of return—Any individual citizen or resident
of the United States who within the calendar year made gifts
{or who, as explained in section 9 of these instructions, is con-
sidered as having made gifts) to any one donee of more than
33,000 (or regardless of value in the case of a gift of a future
Interest in property), must file a gift tax return on Form 709.
fhe return is required even though, because of authorized deduc-
tions, a tax may not be due. A nonresident not a citizen of the
United States and engaged in business in the United States is
similarly required to file a gift tax return if the subject of the gift
consisted of property situated in the United States. A nonresi-
dent not a citizen of the United States and NOT engaged in busi-
ness in the United States is required to file a gift tax return if the
subject consisted of tangible property situated in the United
States. Individuals only are required to file returns as donors
and not trusts, estates, partnerships, or corporations. However,
where gifts are made by trusts, estates, partnerships, or corpora-
tions, the individual beneficiaries, partners, or stockholders be-
come’ donors and may incur Hability under the Federal gift tax
aw.

Where the donor dies before filing his return, the executor of
his will or the administrator of his estate shall file the return.

Donees or trustees receiving reportable gifts must file informa-
tion returns, Form 710.

2, Time and place for filing return.—This return must be filed
on or before the 15th day of April following the close of the
ealendar year in which the gifts were made. The required return
cannot be filed prior to the close of the calendar year in which the
gifts were made unless the return is for a deceased donor. The
return should be filed with the District Director of Internal Reve-
nue for the district in which is located the legal residence or prin-
cipal place of business of the donor, or, if he has neither, with the
District Director at Baltimore 2, Maryland.

3. Payment of tax.—The tax should be paid to the District
Director by the donor on or before the 15th day of April following
the close of the calendar year in which the gifts were made, unless
an extension of time for payment thereof has been. granted by the
District Director. The tax may be paid at the election of the donor
nt any time prior to the 15th day of April following the close of
the calendar year in which the gifts were made.

Check or money order in payment of the tax should be made
payable to “District Director, I. R. 8.”

4, Penalties.—Severe penalties are provided by law for willful
failure to make and file a return on time and for willful attempt to
evade or defeat payment of tax.

5. Transfers for a consideration in money or money’s worth.—
The Federal gift tax is not limited in its imposition to transfers
without consideration, but extends to sales and exchanges for
Jess than an adequate and full consideration in money or money’s
worth. In the case of a transfer of property for less than an
adequate and full consideration in money or money’s worth, the
amount by which the value of the property exceeded the value of
the consideration constitutes a gift within the meaning of the
statute. If the consideration is not reducible to a money value,
us in the case of love and affection, promise of marriage, éte., it is
to be wholly disregarded and the entire value of the property
transferred constitutes the amount of the gift. A bona fide sale,
exchange, or other transfer of property in the ordinary course of
business and free from any donative intent, is considered as made
for an adequate and full consideration in money or money's worth.
See the Gift Tax Regulations as to marital property settlement.

6. Powers of appointment.—The exercise or release of a power
of appointment may constitute a gift by the individual possessing
such power. In any case where such action has been taken the
Gift Tax Regulations should be consulted.

7. Gift of husband or wife to third party.—If husband and wife
consent, all gifts made by them to third persons may, for the
purpose of the gift tax, be considered as made one-half by each.
For this purpose, an individual is to be considered as the spouse
ef another individual only if he is married to such individual at
the time of the gift and does not remarry during the remainder
of the calendar year. This provision of Taw will apply only for
a calendar year for which both spouses signify their consent as
explained below, and will not apply (1) if the consenting spouses
were not married to each other on the date of gift, (2) if either
spouse was a nonresident not a citizen of the United States on
the date of gift, (3) to a gift by one spouse if he created in the
other spouse a power of appointment over the property interest
transferred. If one spouse transferred property in part to his
spouse and in part to third parties, the consent is effective only
insofar as the interest transferred to third parties is presently
escertainable. For any calendar year for which a consent is
effective the liability with respect to the entire gift tax of each
spouse shall be joint and several.

The consent referred to above must be signified, by the spouse
Alling the return, by answering “Yes” to question B on the face of
the return and, by the other spouse, by executing the “Consent of
Spouse” appearing on the face of the return. The consent of the
husband is to be signified on both returns where possible but his

consent will be considered sufficient if signified on one return.
The same rule is applicable to the wife. Where one spouse files
more than one return for a calendar year on or before the 15th
day of April following the close of such year, the last return so
filed will, for the purpose of determining whether a consent has
been signified, be considered as the return. The consent may be
so signified at any time after the close of the calendar year, sub-
ject to the following limitations: (1) The consent may not be
signified after the 15th day of April following the close of such
year, unless no return has been filed before that day for such
year by either spouse, in which case the consent may not be
signified after a return for such year is filed by cither spouse,
and (2) the consent may not be signified after a notice of defi-
ciency with respect to the tax for such year has been sent to
either spouse. The executor or administrator of a deceased
spouse or the guardian or committee of a legally incompetent
spouse, as the case may be, may signify such consent.

8, Joint tenancy between husband and wife—The creation,
during 1955 or a subsequent calendar year, between husband and
wife of a tenancy by the entirety or joint tenancy with right of
survivorship in real property is not treated as a gift unless the
donor spouse so elects in a timely filed gift tax return, This rule
is also applicable with respect to additions to the value of such
property, whether in the form of improvements, reductions in the
indebtedness, or otherwise. When the donor spouse elects to
treat such transactions as a gift the filing of a gift tax return is
required, even though the value of the gift is less than the allow-
able exclusion. The value of the gift is measured by the difference
between the value of the property, or property right or interest,
transferred and the value of the donor’s retained interest therein.
If the donor does not elect in a timely filed return to have such
tenancy, or addition thereto, treated as a gift during the calendar
year within which such tenancy was created (or addition made)
the termination of such tenancy, other than by reason of the death
of a spouse, results in a gift to the extent the proportion of the
proceeds received by either spouse is not equal to the proportion
of the consideration furnished by such spouse in acquiring or
improving the property. If the donor does elect, in the manner
indicated above, the termination of such tenancy, other than by
reason of the death of a spouse, will result in a gift to the extent
that the proceeds received by either spouse are in excess of such
spouse’s proportionate interest in the property immediately prior
to such termination. The election referred to is only applicable
with respect to the calendar year 1955 and subsequent calendar
years. The creation of such tenancy between husband and wife
(or additions made thereto) during a calendar year subsequent
to June 6, 1932, and prior to 1955 resulted in a gift includible for
Federal gift tax purposes.

9, Exclusion of $3,000.—The first $3,000 of gifts (other than
gifts of future interests in property) made to any one donee
during the calendar year is, for the purpose of the computation
of the tax, excluded from the amount of gifts for the year. The
entire value of gifts totaling more than $3,000 to any one donee
during the year must be listed on the return. Where husband
and wife consent to have all gifts made by them to third parties
during the calendar year considered as having been made one-half
by each of them, all gifts to any third party donee during the year
totaling more than $3,000 must also fe listed on the return irre-
spective of the fact that, by reason of such consent, neither spouse
is considered to have made gifts in excess of $3,000 in value. The
entire value of any gift of a future interest in property must be
included in the total amount of gifts for the calendar year in
which such a gift is made. For the definition of “Future Inter-
ests,” see the Gift Tax Regulations. Also, see the Regulations
with respect to such gifts to minors.

10. Schedule A; gifts made during calendar year for which this
return is filed.—All gifts (including charitable, public, and simi-
lar gifts) made by the donor during the calendar year for which
this return is filed must, to the extent indicated in section 9 of
these instructions, be disclosed under Schedule A. If husband
and wife consent to have all gifts made by them to third parties
during the calendar year considered as having been made one-
half by each of them, the full value of the gifts made by the
spouse filing the return must be included and the portion to be
reported by the other spouse deducted at line 6. None of the
gifts made by the other spouse are to be listed individually but
the portion of such gifts to be reported by the spouse filing
the return is to be included at line d. In listing the gifts on
Schedule A the computation of lines b, h (1), and h (2) will be
facilitated if the various items are segregated into gifts to the
spouse and gifts to third parties and the latter category further
subdivided into charitable, public and similar gifts, and all other
gifts. In all cases in which it is not apparent how the amounts
entered at lines 6, h (1), and h (2) were computed, additional
sheets of the same size as the return should be attached and the
computations set forth thereon in detail.

11. Description of property—In listing upon the return the
property comprising the gifts made during the calendar year, the
description thereof should be such that the property may be

16~87680-10