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Form 709 Schedule D: Generation-Skipping Transfer Tax (2025)

Updated October 18, 2026. Quick answer: Schedule D figures any generation-skipping transfer tax on the gifts in Schedule A. Part 1 repeats the direct skips, Part 2 reconciles the donor’s GST exemption, and Part 3 allocates exemption to each gift and computes the tax. The gift values come from Schedule A, and the tax total carries to the tax computation.

What Schedule D does

The form titles the schedule “Computation of Generation-Skipping Transfer Tax”. One note applies throughout: “Inter vivos direct skips that are completely excluded by the GST exemption must still be fully reported (including value and exemptions claimed) on Schedule D.” The direct skips come from Schedule A Part 2, and the indirect skips and trusts from Schedule A Part 3. The whole return is explained on the Form 709 page.

Part 1: generation-skipping transfers

“Enter in Part 1 all of the gifts you listed in Part 2 of Schedule A, in the same order and showing the same values.” Column (a): “List items from Schedule A, Part 2, column (a), in the same order.” Column (b): “Only provide descriptions for ETIP transfers; otherwise, leave blank.”

Column (d) is the nontaxable portion. “you must allocate the exclusion on a giftbygift basis for GST computation purposes.” “You must allocate the exclusion to each gift, to the extent desired but not exceeding the maximum allowable amount, in chronological order, beginning with the earliest gift that qualifies for the exclusion.” “Be sure that you do not claim a total exclusion of more than $19,000 per donee.”

Column (e) is the net transfer, which is column (c) less column (d) on the form.

Part 2: GST exemption reconciliation

Part 2 runs from line 1 to line 8. The form captions are “Maximum allowable exemption (see instructions)”, “Total exemption used for periods before filing this return”, “Exemption available for this return. Subtract line 2 from line 1”, and “Exemption claimed on this return from Part 3, column (c), total below”. Line 8 is “Exemption available for future transfers. Subtract line 7 from line 3”.

Line 1: “Every donor is allowed a lifetime GST exemption.” “The amount of the exemption for 2025 is $13,990,000.” “Enter on line 1 of Part 2 the maximum GST exemption you are allowed.” The instructions caution “In general, each annual increase can only be allocated to transfers made (or appreciation occurring) during or after the year of the increase.” “Keep a record of your transfers and exemption allocations to make sure that any future increases are allocated correctly.”

Exemption allocation: automatic and by notice

“An allocation is irrevocable.” “In the case of inter vivos direct skips, a portion of the donor’s unused exemption is automatically allocated to the transferred property unless the donor elects otherwise.” “Reporting a direct skip on a timely filed Form 709 and paying the GST tax on the transfer will prevent an automatic allocation.”

Line 5: “Section 2632(c) provides an automatic allocation to indirect skips of any unused GST exemption.” Line 6: “Enter the amount of GST exemption you are applying to transfers reported in Part 3 of Schedule A.” “To allocate your exemption to such transfers, attach a statement to this Form 709 and entitle it” Notice of Allocation. The trust identification, the value, the exemption allocated and the inclusion ratio after allocation are the items the notice must contain, as the instructions list them.

Part 3: tax computation

“You must enter in Part 3 every gift you listed in Part 1 of Schedule D.” For column (c): “You are not required to allocate your available exemption.” “You may allocate some, all, or none of your available exemption, as you wish, among the gifts listed in Part 3 of Schedule D.” “However, the total exemption claimed in column (c) may not exceed the amount you entered on line 3 of Part 2 of Schedule D.”

Column (d) divides column (c) by column (b), and the instructions say “Carry your computation to three decimal places”. The remaining columns work out the inclusion ratio, the applicable rate and the tax for each gift. The rate table and the column arithmetic are on the form itself.

Where the number comes from

Gift values and item numbers come from Schedule A. The exemption history comes from the donor’s earlier Forms 709 and a record of past allocations. Annual exclusion rules for these gifts are on the gift tax annual exclusion page.

Where it goes next

The tax total goes to two places. On Schedule A, Part 4 the caption is “Generationskipping transfer taxes payable with this Form 709 (from Schedule D, Part 3, col. (g), total)”, covered on the Schedule A Part 4 page. On page 1, line 16 is “Generationskipping transfer taxes from Schedule D, Part 3, col. (g), total”, covered on the Part II lines 1 to 12 page.

Edition and line numbers

This page reads Form 709 (2025) and the 2025 Instructions for Form 709. Those are the current files irs.gov served on 2026-10-18, byte-identical to the archived copies. The instructions state “For gifts made during calendar year 2025”. Check the year printed on your own Form 709 and use the line numbers on that year’s form, because the form you file is the one that governs your line numbering.

Common mistakes

  • Treating the exemption as automatic for every gift. The instructions say “You are not required to allocate your available exemption.”
  • Claiming more annual exclusion than allowed. The instructions say “Be sure that you do not claim a total exclusion of more than $19,000 per donee.”
  • Leaving out a direct skip that the exemption fully covers. The form says “Inter vivos direct skips that are completely excluded by the GST exemption must still be fully reported (including value and exemptions claimed) on Schedule D.”

Related: Form 709, gift tax annual exclusion, gift tax limit, and estate planning glossary.

Sources

Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.

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