Form 708 Instructions: A Line-by-Line Guide to Reporting Covered Gifts and Bequests

Before you start: do you need to file?

1. Was the donor a covered expatriate? Expatriation alone does not establish covered status. Review the covered-status and protective-filing guidance and the covered expatriate tests, then check whether a statutory exception excludes the transfer.
2. Did the recipient’s covered receipts exceed $19,000? Aggregate covered gifts, bequests, and attributable foreign trust distributions from all covered sources for the calendar year. The exclusion applies once per recipient, not separately to each donor. A trust migrating to domestic status or making the foreign trust election cannot use the below-threshold filing exception.
3. Is a protective return appropriate? If reasonable investigation supports a conclusion that the transfer is not covered, a properly completed protective Form 708 with the required affidavit can start the assessment period. Uncertainty alone does not justify treating the donor as noncovered; review the rebuttable presumption for living donors who do not authorize disclosure.

Use one Form 708 for each applicable calendar year. Enter that calendar year beneath the form’s title, even if you prepare or submit the return later.

Part I – General Information (lines 1–16)

Who is filing: individual or trust (lines 1–6)

Line 1: Enter the recipient individual’s full name or the filing trust’s name. Line 2: An individual enters an SSN, a previously used ITIN, or an assigned IRSN; if none exists, leave it blank for the IRS to assign an IRSN. Line 3: A trust enters its EIN; apply using Form SS-4 if needed.

Lines 4a–4h: Give the current mailing address, using the foreign address fields where applicable and spelling out the country name. Lines 5–6: For a trust, enter the fiduciary’s name and title; individual filers leave these blank.

What was received (lines 7–8)

Line 7: Answer whether the recipient received a covered gift or bequest from a covered expatriate; a “Yes” leads to Part IV, Section 1. Line 8: Answer whether a distribution from a non-electing foreign trust was attributable to covered gifts or bequests; a “Yes” requires Part IV, Section 2 and Part VI.

Extension and protective filing (lines 9–10)

Line 9: Indicate whether the filing deadline was extended with Form 7004. Line 10: Identify a protective filing and attach the signed affidavit supporting the noncovered conclusion; report the relevant expatriate and transfer details even though the position is that no §2801 tax applies.

Status of the filer (lines 11–14)

• Lines 11a–11b: An individual checks individual status, then U.S. citizen or U.S. resident (noncitizen). Residency here means domicile for gift and estate tax purposes. Proceed to line 16 and skip lines 12–15.
• Line 12 — trusts only: A domestic trust answers “Yes” and proceeds to line 14.
• Lines 13a–13f — trusts only: A foreign trust identifies a new election, an existing election and its initial year, termination of an election, or a change in its U.S. agent. A new election requires Parts VII and VIII; a changed agent requires an updated Form 2848 and Part VII, Section 1. Follow the form’s routing instructions for the specific answers.
• Line 14 — trusts only: Identify a foreign trust that became domestic during the year. Complete the applicable sections of Part IV, Part VII, Section 2, and attach the governing instrument.

Gifts in prior years and foreign tax paid (lines 15–16)

Line 15 — trusts only: A trust making its initial election or migrating to domestic status reports whether it received covered transfers in prior years; “Yes” requires Part IV, Section 3. Line 16: All filers answer whether foreign gift or estate taxes were paid on the reported transfers; “Yes” requires Part V and the foreign tax documentation.

Part II – Tax Computation: a line-by-line example

Assume an individual received $100,000 of covered gifts in 2025, paid $5,000 in qualifying foreign gift tax on those gifts, and paid $10,000 with Form 7004. There are no other covered receipts or applicable exceptions.

Refund variation: If the extension payment had been $30,000, line 9a would show $2,600 ($30,000 − $27,400). A foreign tax reduction cannot itself create negative §2801 tax; the overpayment calculation reflects payments exceeding the tax liability.

The recipient or authorized fiduciary signs the return. A paid preparer completes the preparer block, including the PTIN, and gives the recipient a copy.

Part III – Covered Expatriates

List each covered expatriate connected with a reported gift, bequest, or attributable trust distribution. Enter the name in column (a), the most recent expatriation date in column (b), the identifying number in column (c), and the date of death in column (d), if applicable.

Use the donor’s SSN; if the donor was never issued an SSN, use their ITIN. If the donor has neither an SSN nor an ITIN, leave column (c) blank and attach a statement explaining why. A protective return also lists the expatriate donors or decedents you reasonably concluded were not covered expatriates. Duplicate Part III when more entries are needed.

Part IV – Covered Gifts and Bequests

Section 1: gifts and bequests received directly

List receipts chronologically, excluding distributions from non-electing foreign trusts. Assign item numbers A1, A2, A3, and so on; enter the donor’s name, any future-interest election, receipt date, property description, and value. Line 2 totals column (f) on this page. Line 3 totals column (f) from additional copies of Part IV, Section 1 attached to the return; line 4 adds lines 2 and 3.

Section 2: distributions from non-electing foreign trusts

Use item numbers B1, B2, B3. Describe the property, give the receipt date and full distribution value, and enter the §2801 ratio from Part VI in effect on that date. Multiply the distribution value by that ratio to find the covered amount in column (f); lines 2–4 combine the entries and additional sheets.

Section 3: prior-year amounts for trusts

This section applies to a foreign trust making its initial domestic-trust election or becoming a migrated domestic trust. Build the contribution history in chronological order, starting with the first covered contribution and including subsequent covered and noncovered contributions. For item C1 on line 2, enter the immediately preceding calendar year in column (b), the trust’s December 31 value for that year in column (c), and the last §2801 ratio from line 1(h) in effect on that December 31 in column (d). Column (e) multiplies columns (c) and (d); carry that value to Part IV, Section 4, line 3.

Section 4: totals

Lines 1–3 bring forward the totals from Sections 1–3. Add them on line 4 and carry that amount to Part II, line 1.

How to value what was received

Use fair market value at the applicable date of receipt and report amounts in U.S. dollars. Gifts generally follow gift-tax timing; bequests generally use the date of death, but distributions under a will or revocable trust and certain other interests have special receipt rules. Future interests and trust interests require particular care; do not assume the date cash arrives is always the valuation date.

Attach the financial statements, appraisals, or other valuation support used. If an appraisal or supporting valuation information is not attached, Part IV must fully explain how the value was determined. Trust prior-year computations use the specific year-end valuation described above.

Part V – Foreign Gift or Estate Taxes

Claim only gift or estate taxes actually paid to a foreign country on the covered transfers reported in Part IV. Foreign income tax, interest, and penalties do not qualify. Identify each transfer by its A, B, or C item number so the tax reduction can be matched to the property received.

For line 1, enter the item number, transfer value, payment date(s), country, foreign tax paid in U.S. dollars, and any refund claimed or allowed. Column (g) subtracts the refund from the tax paid, floored at zero. Line 2 totals column (g), line 3 totals column (g) from additional copies of Part V attached to the return, and line 4 adds lines 2 and 3 for Part II, line 5.

Attach the foreign gift or estate tax return, a receipt or canceled check proving payment, and the information needed to verify the reduction. Tax merely owed but not yet paid does not qualify for the current reduction; review the IRS protective refund-claim procedure if payment is expected later.

Part VI – Foreign Trust §2801 Ratio

Skip unless you’re dealing with a trust distribution.

A recipient of distributions from a non-electing foreign trust completes a separate Part VI for each distributing trust. Section 1 identifies the trust and trustee. Section 2 tracks contributions, pre- and post-contribution trust values, and the covered portion to compute the ratio in column (h): covered portion divided by total post-contribution value, shown as a decimal carried to two places.

Carry the ratio applicable on the distribution date to Part IV, Section 2. Under Treas. Reg. §28.2801-5(c)(3), a U.S. recipient must assume a distribution from a non-electing foreign trust is attributable to covered gifts or bequests to the extent the trustee lacks sufficient records or the recipient cannot obtain the information needed to calculate the ratio. This assumption is rebuttable with sufficient information. It differs from the normal computation rule in §28.2801-5(c)(1)(ii), under which the ratio is zero before the trust receives its first covered gift or bequest. See TD 10027, §28.2801-5(c)(1)(ii) and (c)(3). See the foreign trust guide for the election and distribution rules.

Part VII – U.S. Agent, Prior Distributions, and Permissible Distributees

Skip unless you’re dealing with a trust.

An electing foreign trust identifies its U.S. agent in Section 1 and makes the required designation using Form 2848. Lines 10–11 disclose whether and when that form was filed; naming an agent here alone does not create a valid designation.

Section 2 lists prior covered distributions to U.S. recipients before the initial election or migration; check the no-prior-distributions box if applicable. Section 3 identifies permissible distributees for an electing foreign trust, including people with current or specified future rights to receive or withdraw trust property. Follow the filing instructions for the particular election or migration.

Part VIII – Declaration of Foreign Trustee

Skip unless a foreign trust is making the election.

The foreign trustee enters the trust’s name, signs, supplies their title, and dates the declaration. The declaration commits the trust to timely reporting and confirms, under penalties of perjury, that each permissible distributee was notified of the election effective January 1 of the applicable year. Review the foreign trust election requirements before finalizing the return.

Where to file Form 708 and how to pay

File the original paper return at the appropriate Kansas City address. Use an IRS-designated private delivery service when relying on the timely-mailing rule, and retain proof of mailing.

Pay electronically through EFTPS, or send a check payable to the United States Treasury with the recipient’s tax identification number and “Form 708” written on it. Electronic payment does not replace the paper return.

Deadline check: A trust that migrated in 2025 generally had a June 15, 2026 deadline. A new foreign trust election in a year with no covered receipts also uses June 15 of the following year. For certain bequests received after death, the deadline is the later of June 15 of the second year after the year of death or June 15 of the year after receipt. For example, death in 2025 and receipt under a will in 2026 can produce a June 15, 2027 deadline.

A timely Form 7004 extends filing by six months; pay the estimated tax by the original deadline. Weekend and legal holiday rules may move a deadline to the next business day. See the Form 708 due-date guide.

These addresses are for original returns. Supplemental Forms 708 use a different address in the IRS instructions.

Required attachments checklist

Include the items applicable to the recipient and the positions taken:

• Foreign trust governing instrument: Required for distributions from a non-electing foreign trust, electing foreign trusts, and migrated foreign trusts.
• Foreign tax return and proof of payment: Include the receipt or canceled check and supporting calculations when claiming a foreign gift or estate tax reduction.
• Valuation support: Include financial statements, appraisals used, and other evidence; provide a full valuation explanation in Part IV if supporting information is not attached.
• Form 2848 for the U.S. agent: File the required designation for an electing foreign trust, record the filing date in Part VII, and update it if the agent changes. Keep a copy in the filing package.
• Protective filing affidavit: Sign under penalties of perjury and state the information relied on, the investigation performed, and the basis for concluding the transfer is not covered. Supply all otherwise required form information.
• Additional schedules and statements: Include extra Parts III–VI or VII where needed, trust ratio records, and any explanation for a donor lacking an SSN or ITIN.

Keep a complete copy of the signed return, attachments, payment confirmation, and mailing evidence in the client file.

Common Form 708 mistakes

• Applying $19,000 per donor. The recipient gets one annual exclusion against aggregate covered receipts.
• Forgetting Form 3520. Part IV foreign-gift reporting and Part III trust-distribution reporting are separate obligations with their own thresholds and deadlines.
• Assuming the extension delays payment. Form 7004 extends filing only; tax remains due on the original payment date.
• Missing the earlier trust or bequest deadline. Migrated trusts, certain elections, and certain bequests do not follow the ordinary second-year deadline.
• Using income-tax residency for §2801. Determine domicile separately.
• Claiming unpaid foreign taxes or omitting refunds. Part V is based on qualifying taxes paid, reduced by refunds claimed or allowed.

Form 708 and Form 3520: do you file both?

Often, yes. Form 708 reports and computes §2801 tax; it does not satisfy Form 3520’s information-reporting requirements. For gifts or bequests from a nonresident alien individual or foreign estate, Form 3520 Part IV generally applies when aggregate receipts exceed $100,000, with related-party aggregation rules; foreign corporation or partnership gifts have a different indexed threshold.

Foreign trust distributions generally belong in Form 3520 Part III and are not governed by the $100,000 gift threshold. Read the full Form 708 versus Form 3520 comparison and prepare the separate information return with Agena’s Form 3520 software. Calendar and extend each return separately.

Form 708 FAQ

Can Form 708 be e-filed?

No. Form 708 is currently filed on paper, even when the tax is paid electronically through EFTPS. Mail the signed return and applicable attachments to the IRS address above.

What if the donor won’t confirm their status?

Request records supporting the donor’s expatriation status and document your investigation. A living donor’s failure to authorize IRS disclosure triggers a rebuttable presumption of covered status unless other documentation supports a different conclusion; a protective return requires a reasonable conclusion and a signed affidavit.

Do gifts received before 2025 have to be reported?

The final regulations apply to covered gifts and bequests received on or after January 1, 2025; this guide does not direct you to file annual Forms 708 for earlier direct receipts. Earlier contributions to a foreign trust can affect later taxable distributions or the trust’s election or migration reporting, and separate Form 3520 obligations may apply. Review the transition rules in the main §2801 guide for older transfers.

Sources and filing references

This walkthrough uses the December 2025 Form 708 and instructions. Check the live IRS instructions for updates before submitting a return.

• IRS Instructions for Form 708 · Local instructions PDF
• IRS Form 708 (December 2025)
• Final §2801 regulations (TD 10027)
• IRS-designated private delivery services