Updated October 18, 2026. Quick answer: Part 3 of Schedule A lists gifts to trusts that are indirect skips, or that are taxed as gifts now and could later be subject to generation-skipping transfer tax. Gifts go in the order they were made, using the same columns as Part 1 plus a column (n) box for the section 2632(c) elections.
What Part 3 is for
The form describes the part as “Gifts to trusts that are indirect skips as defined under section 2632(c)”. The instructions open with the reason: “Some gifts made to trusts are subject only to gift tax at the time of the transfer but may later be subject to GST tax.” They continue “The GST tax could apply either at the time of a distribution from the trust, at the termination of the trust, or both.” The return as a whole is explained on the Form 709 page.
Is the gift an indirect skip?
The instructions define it: “In general, an indirect skip is a transfer of property that is subject to gift tax (other than a direct skip) and is made to a GST trust.” And a GST trust: “A GST trust is a trust that could have a GST with respect to the transferor”, with an exception the instructions point to section 2632(c)(3)(B) for.
The instructions give a worked case: “This gift is made to a “trust” even though there is no explicit trust instrument.” On life estates and similar arrangements they note that “a trust includes life estates with remainders, terms for years, and insurance and annuity contracts.”
Charitable remainder trusts follow their own placement rule: “If a life beneficiary is a skip person, list these gifts on Part 3 of Schedule A.”
Where the number comes from
Columns (a) to (i) are completed the way they are on Schedule A Part 1. The instructions say “You must list the gifts in Part 3 in the chronological order that you made them.” They also say Part 3 includes “indirect skips for which election 2, described below, will be made in the current year or has been made in a previous year.”
The records are the trust agreement and the account statements for the funding. For a trust gift, the instructions say “attach a certified or verified copy of the trust instrument to the return on which you report your first transfer to the trust.” For later transfers, “you may attach a brief description of the terms of the trust or a copy of the trust instrument.”
Column (n): the section 2632(c) election
The instructions explain: “Section 2632(c) provides for the automatic allocation of the donor’s unused GST exemption to indirect skips.” Then they list three elections. “Election 1. You may elect not to have the automatic allocation rules apply to the current transfer made to a particular trust.” “Election 2. You may elect not to have the automatic rules apply to both the current transfer and any and all future transfers made to a particular trust.” “Election 3. You may elect to treat any trust as a GST trust for purposes of the automatic allocation rules.”
On timing: “Election 1 is timely made if it is made on a timely filed gift tax return for the year the transfer was made or was deemed to have been made.” “Elections 2 and 3 may be made on a timely filed gift tax return for the year for which the election is to become effective.”
On how to make one: “To make one of these elections, check column (n) next to the transfer to which the election applies.” “Attach a statement to Form 709 that describes the election you are making (or terminating) and clearly identifies the trusts and/or transfers to which the election applies.” If an election was made on an earlier return: “do not make an entry in column (n) for that transfer and do not attach a statement unless you are terminating the election.”
Other columns on this part
Part 3 has the same check boxes as Part 1: “Charitable gift”, “Deductible gift to spouse” and “2652(a)(3) election”, plus the column (n) box captioned “2632(c) election”. Split gifts work as on Part 1: the instructions say “See this heading under Part 1.” See the gift splitting page.
Where it goes next
The form closes the part with “Total of Part 3. Add amounts from Part 3, column (i)”. That total is combined with Parts 1 and 2 on Schedule A Part 4, line 1. Exemption allocated to these trusts is reconciled on 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 form’s heading says “For gifts made during calendar year 2025”. Check the year printed on your own Form 709 and use the line numbers and column letters on that year’s form.
Common mistakes
- Treating a trust gift as final because no GST tax is due now. The instructions say the gifts “are subject only to gift tax at the time of the transfer but may later be subject to GST tax.”
- Checking column (n) with no statement. The instructions say “Attach a statement to Form 709 that describes the election you are making (or terminating)”
- Repeating column (n) on every later gift to a trust with an earlier election. The instructions say “do not make an entry in column (n) for that transfer and do not attach a statement unless you are terminating the election.”
Related: Form 709, gift splitting, estate planning, and estate planning glossary.
Sources
- 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.