Updated October 18, 2026. Quick answer: Lines 1 to 12 of Part II pull in the taxable gifts from Schedule A and from prior periods, compute a tax on the total and on the prior gifts, and work out the applicable credit. Lines 1 and 2 come from schedules, lines 4 and 5 come from the Table for Computing Gift Tax, and line 7 comes from the instructions or Schedule C.
What lines 1 to 12 do
The form titles this part “Tax Computation”. Line 1 reads “Enter the amount from Schedule A, Part 4, line 11”, and line 2 reads “Enter the amount from Schedule B, line 3”. Line 3 is “Total taxable gifts. Add lines 1 and 2”. Line 6 is “Balance. Subtract line 5 from line 4”.
Those inputs come from Schedule A Part 4 and Schedule B. The whole return is explained on the Form 709 page.
Lines 4 and 5: the tax table
The instructions say “use the Table for Computing Gift Tax.” Line 4 is the tax on the amount on line 3 and line 5 is the tax on the amount on line 2. The table itself is printed in the instructions under the title Table for Computing Gift Tax, and this page does not reproduce its brackets.
Line 7: the applicable credit amount
The instructions explain that “The applicable credit (formerly unified credit) amount is the tentative tax on the applicable exclusion amount.” For gifts made in 2025 they list what the exclusion equals: “The basic exclusion amount of $13,990,000, PLUS” “Any DSUE amount, PLUS” and “Any Restored Exclusion Amount.”
For a donor with no DSUE or restored amount: “enter $5,541,800 on line 7.” For a nonresident: “Nonresidents not citizens of the United States may not claim the applicable credit and should enter zero on line 7.”
If a DSUE amount applies: “complete Schedule C” and enter the amount from line 5 of that schedule on line 7. See the Schedule C page. The form’s caption for line 7 is “Applicable credit amount.”
Lines 8 to 12: prior credit, specific exemption and the smaller of two
Line 8 is “Enter the applicable credit against tax allowable for all prior periods from Schedule B, line 1, col. (c)”. Line 9 is “Balance. Subtract line 8 from line 7. Do not enter less than zero”.
For line 10 the instructions say “Enter 20% of the amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977.”
Line 11 is “Balance. Subtract line 10 from line 9. Do not enter less than zero”. Line 12 is “Applicable credit. Enter the smaller of line 6 or line 11”.
Where the number comes from
Line 1 comes from the Schedule A reconciliation, line 2 from the prior-period totals on Schedule B, and lines 4 and 5 from the Table for Computing Gift Tax. Line 7 comes from the instruction text above or from Schedule C. Line 8 comes from the credit column of Schedule B. If you were splitting gifts, the inputs depend on gift splitting and on Part III.
Where it goes next
Line 12 carries into the credits section. The form says line 14 is “Total credits. Add lines 12 and 13”. Lines 13 to 20 are on the Part II lines 13 to 20 page, and the generation-skipping transfer tax on line 16 comes from Schedule D.
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.
Common mistakes
- Entering a number on line 7 without checking Schedule C. The instructions say to “complete Schedule C” when a DSUE amount or restored exclusion applies, and enter its line 5 on line 7.
- Entering a negative balance on line 9 or 11. The form says “Do not enter less than zero”.
- Using the nonresident rule the wrong way round. The instructions say “Nonresidents not citizens of the United States may not claim the applicable credit and should enter zero on line 7.”
Related: Form 709, gift splitting, gift tax limit, and estate tax exemption.
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Answer againSources
- Instructions for Form 709 (2025), United States Gift (and Generation-Skipping Transfer) Tax Return, for gifts made during calendar year 2025: https://www.irs.gov/pub/irs-pdf/i709.pdf
- Form 709 (2025), United States Gift (and Generation-Skipping Transfer) Tax Return: https://www.irs.gov/pub/irs-pdf/f709.pdf
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.