Gift and Estate Tax: Forms 706 and 709

Categories: Federal Tax, IRS CE
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About Course

Gift and Estate Tax: Forms 706 and 709 provides enrolled agents and CPAs with a complete working knowledge of federal estate and gift tax law — from assembling the gross estate and computing the tentative estate tax to filing Form 709 for lifetime gifts and navigating planning decisions under the permanently elevated exclusion amounts in effect for 2026.

The course opens with the fundamentals of the federal estate tax under Chapter 11: how the gross estate is assembled under §§2031–2042, which includable transfer rules most frequently arise in practice (§2036 retained life estates, §2040 joint tenancy, §2042 life insurance), how allowable deductions are applied under §§2053–2056, and how the 10-step estate tax computation results in the net estate tax due. Form 706 schedules and the 9-month filing deadline — including portability election requirements — are covered in depth.

The gift tax modules address the unified transfer tax system, the annual exclusion under §2503(b), unlimited exclusions for tuition and medical payments under §2503(e), gift splitting under §2513, the cumulative gift tax computation method, and complete guidance on when and how to file Form 709. The interaction between lifetime gifts and the estate tax at death — including the adjusted taxable gifts add-back — is explained with worked examples.

Planning coverage addresses the issues practitioners now face under Public Law 119-21 (the Working Families Tax Cuts Bill), which permanently set the basic exclusion amount at $15,000,000 for 2026 instead of allowing the prior TCJA sunset to cut it roughly in half: the anti-clawback regulation under §2001(g) for gifts made before the law changed, QTIP elections under §2056(b)(7), bypass trust vs. portability analysis, and late portability relief under Rev. Proc. 2022-32. The generation-skipping transfer tax, GST exemption allocation, §2032A special-use valuation, §6166 installment payment elections, and QDOT planning for non-citizen surviving spouses complete the advanced topics.

The course concludes with professional standards: Circular 230 due diligence obligations, valuation penalties under §6662, common Form 706 audit triggers, and record retention requirements. Participants earn 2 IRS CE hours in Federal Tax Law Topics.

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What Will You Learn?

  • Compute the gross estate and apply allowable deductions to determine the taxable estate under Chapter 11 of the Internal Revenue Code
  • Identify includable transfer rules under §§2036–2042 and apply them to common fact patterns involving retained life estates, joint tenancy, and life insurance
  • Apply the annual exclusion under §2503(b), §2503(e) unlimited exclusions, and gift splitting under §2513 to minimize gift tax exposure
  • Prepare or review Form 709 using the cumulative gift tax computation method and identify when filing is required
  • Evaluate portability planning strategies, make timely elections on Form 706, and apply Rev. Proc. 2022-32 for late portability relief
  • Structure QTIP elections under §2056(b)(7) and advise clients on the estate tax consequences at the second death
  • Allocate GST exemption efficiently and identify the three types of generation-skipping transfers subject to the 40% GST tax
  • Assess professional compliance obligations including Circular 230 due diligence, valuation penalties under §6662, and estate tax audit risk factors

Course Content

Module 1 – Estate Tax Fundamentals and Form 706
Participants examine the structure of the federal estate tax under Chapter 11, exploring how the gross estate is assembled under §§2031–2042, which allowable deductions reduce the taxable estate, and how the unified credit is applied in the 10-step computation. Special attention is given to Form 706 key schedules, includable transfer rules under §§2035–2042, and the 9-month filing deadline including portability election requirements.

  • Estate Tax Fundamentals and Form 706

Module 2 – Gift Tax Fundamentals and Form 709
Building on the unified transfer tax framework, learners apply the federal gift tax rules most frequently encountered in practice — the annual exclusion under §2503(b), unlimited §2503(e) exclusions for tuition and medical payments, and gift splitting under §2513. The module walks through the cumulative gift tax computation method step by step, concluding with Form 709 filing requirements and the gift-to-estate tax interaction at death.

Module 3 – Portability, QTIP Elections, and Planning Strategies
This section examines the most consequential planning tools for married clients: the DSUE portability election under §2010(c), the QTIP election under §2056(b)(7), and the bypass trust vs. portability comparison. Learners analyze the TCJA applicable exclusion sunset after 2025, the anti-clawback regulation under §2001(g), and estate reduction strategies including annual gifting programs and §529 superfunding.

Module 4 – Generation-Skipping Transfer Tax, Special Topics, and Compliance
Few areas of transfer tax are as technically demanding as the generation-skipping transfer tax, and this module equips practitioners to navigate it with confidence. Learners identify the three GST transfer types, allocate GST exemption efficiently, and apply special elections including §2032A, §6166 installment payment, QDOT planning under §2056A, and the professional standards governing estate tax practice under Circular 230.

Final Assessment – Gift and Estate Tax: Forms 706 and 709
You have completed a thorough examination of federal estate and gift tax law, covering the gross estate computation under Chapter 11, lifetime transfer planning with Forms 706 and 709, portability elections and QTIP strategies, and advanced topics including GST tax, §2032A, §6166, and QDOT planning. You are now prepared to demonstrate your understanding of these concepts. The following final examination covers all four modules of this course. A passing score of 70% is required to earn your 2 CE credit hours.

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