Certified Trust and Fiduciary Advisor (CTFA) Practice Exam 2026 - Free CTFA Practice Questions and Study Guide

The correct scenario that requires the filing of an IRS Form 709 is when a person gifts $33,000 to pay a nephew's tuition. This is because IRS Form 709 is the United States Gift (and Generation-Skipping Transfer) Tax Return, which is required when gifts exceed the annual exclusion limit.

The annual exclusion for gifts, as of 2023, allows individuals to give up to $17,000 per recipient without needing to file Form 709. In this case, since the individual is contributing $33,000 for the nephew's tuition, the amount exceeds the annual exclusion limit. Although tuition payments directly to educational institutions are often exempt from gift tax and don't count against the annual exclusion, the other aspects and methods of this gift necessitate a filing to keep records of the gift exceeding the allowed threshold.

In contrast, the other scenarios do not require a filing of Form 709 because they either fall below the annual exclusion limit or do not represent taxable gifts. For example, gifting stock to a spouse often does not require filing since gifts between spouses can be unlimited in amount, reimbursement for medical expenses may fall under exclusions for direct payments, and the forfeiting of fees by a surgeon does not count as a gift since it is