Form 709 for Gifts of Unlisted REIT, BDC and LP Interests (2026)

What is different when the gift has no price

Our guide to the annual gift tax exclusion for 2026 covers the $19,000 rule, the present-interest test, gift splitting, carryover basis and state gift taxes. This page starts where that one stops: you have decided to give shares or units that are not listed, and the Form 709 asks for a number that no exchange publishes.

The Code gives one line to the problem. Section 2512(a): “If the gift is made in property, the value thereof at the date of the gift shall be considered the amount of the gift.” Regulation 25.2512-1 defines value as the price between a willing buyer and a willing seller, “both having reasonable knowledge of relevant facts”, and the Instructions for Form 709 repeat it for the valuation date on Schedule A. For listed stock the regulation then gives an arithmetic rule. For everything else it gives factors.

Read plainly, the ladder has three rungs: a market price if there is one, a market price discounted for thinness if sales are sporadic, and an asset-and-earnings valuation if there is neither. A non-traded REIT, a BDC that repurchases through tender offers, a DST interest and a family partnership unit sit on different rungs, and the paper trail each one gives the donor is different.

Four kinds of unlisted interest and what each one comes with

For DST interests, the public record we use on this site is Form D, not a periodic report; see our DST guide. For family partnerships, our family limited partnership guide covers the estate-tax cases; this page covers only the gift return.

What the filings of two big unlisted vehicles show

These are the numbers a donor of BREIT or BCRED shares would be looking at in October 2026. They are from the issuers’ own SEC documents.

The BREIT prospectus we saved (filed August 5, 2025; the current one is dated April 17, 2026 and we did not read it) says what the NAV is not: “our NAV may not accurately reflect the actual price at which our properties could be liquidated on any given day.” It adds that because purchase and repurchase prices are based on the prior month’s NAV, “you may pay more than realizable value or receive less than realizable value for your investment.” The supplement’s own wording on August 31, 2026 is that “All our property investments are appraised annually by third party appraisal firms in accordance with our valuation guidelines.”

Our pages on BREIT’s review and BCRED’s redemptions follow the same filings for holders. For the gift, the point is narrower: a published NAV is strong evidence of what the issuer values a share at, and a repurchase price is evidence of what a share can be sold back for, but liquidity is capped and prorated in the same documents. Which rung of the regulation that puts the share on, and whether any discount follows, is a valuation question the texts we read do not answer (our reading).

The adequate-disclosure checklist, applied

Regulation 301.6501(c)-1(f)(1) says that a transfer not adequately disclosed on the Form 709 for the year “may be assessed, or a proceeding in court for the collection of the appropriate tax may be begun without assessment, at any time.” Paragraph (f)(2) lists what makes a disclosure adequate. The table keeps the regulation’s items and adds the form each item takes for the four interests above (the right-hand column is our reading, not the regulation).

Appraisal instead. Paragraph (f)(3) lets a donor submit an appraisal in place of the (f)(2)(iv) information. The appraiser must be someone who holds himself or herself out to the public as an appraiser or performs appraisals regularly, must be qualified for the type of property, and must not be the donor, the donee, a family member or an employee of any of them. The appraisal must contain the transfer date, the appraisal date and purpose, a description of the property and process, the assumptions and limiting conditions, the information considered (for a business interest, financial data detailed enough for another person to replicate the value), the reasoning, the method and rationale, and the specific basis such as comparable sales or asset-based approaches. Example 5 applies it: the facts of Example 4, with a conforming appraisal attached, start the period when the return is filed.

Why Example 4 matters for a fund of funds. A family partnership that owns a company that owns a partnership that owns real property fails disclosure if the lower tiers are not described. BREIT is organized through an operating partnership, joint ventures and, since its DST program, DST-held properties; its NAV table reports unconsolidated entities at $22,844,861 thousand of net equity at August 31, 2026. Whether a given lower tier is “relevant and material” to a donor’s ten-thousand-share gift is a judgment for the person preparing the return (our reading).

Discounts: what the texts say, and what we did not find

The Instructions for Form 709 name the discounts a return may include: “a discount for lack of marketability, a minority interest, a fractional interest in real estate, blockage, market absorption, or for any other reason.” If any applies, the donor answers Yes at the top of Schedule A and attaches “an explanation giving the basis for the claimed discounts and showing the amount of the discounts taken.” Regulation 301.6501(c)-1(f)(2)(iv) requires the same description and, for net-asset valuations, the pre-discount 100% value.

We did not find, in the regulations, the instructions or the issuers’ documents we read, a rule for how much of any discount applies to a share that its issuer repurchases at NAV, or whether NAV may be reduced. That is why this page gives no percentage. The family-partnership cases and the discounts they allowed are in our family limited partnership guide. The penalty side is mechanical: a reported value of 65% or less of the actual value is a substantial valuation understatement and 40% or less a gross one (Instructions for Form 709).

Worked numbers (our arithmetic)

Illustrations with stated assumptions, not predictions of any real gift. The August 31, 2026 NAV stands in for a gift-date value; an actual gift needs the value on its own date. Each case assumes outright gifts of present interests and no earlier taxable gifts.

Neither case owes gift tax: the credit under 26 U.S.C. 2505(a) absorbs it, so what a gift uses is exemption, and the return is what records it. The filings we read do not say whether a donee’s shares restart BREIT’s one-year Early Repurchase Deduction clock; that is a question for the transfer agent in writing before a gift (our reading).

The two dates

On December 31: shares held in book entry change hands when the issuer’s or transfer agent’s records change. We did not find in the documents we read when a sponsor treats a gift transfer as effective, or how long processing takes. A transfer request that is open on December 31 is not evidence of a complete gift on its own (our reading of 25.2511-2(b)).

Decision points, and who actually does the work

• The value on the gift date. The Form 709 asks for it by date; BREIT updates NAV per share as of the last calendar day of each month, so a gift made mid-month sits between two published NAVs.
• The disclosure statement or appraisal. The statement is a document written for the IRS; an appraisal must meet paragraph (f)(3). Both are prepared by a CPA, an estate attorney or a qualified appraiser, not by the sponsor.
• Whether the sponsor allows the transfer and what its form requires. BREIT’s prospectus has ownership-limit provisions that refer to a transfer “such as a gift, devise or other similar transaction”; they matter only where a transfer would breach a limit.
• Basis. A gift carries the donor’s basis (see the annual exclusion guide and the step-up in basis guide). Return-of-capital distributions have already reduced it for REIT and BDC shares (our Form 8949 guide shows the arithmetic).

This is analysis of public documents, not investment, legal or tax advice.

What a donor can do with this

• Write down the gift date and the source of the value before the transfer: the NAV or appraisal, and the date it speaks to.
• Ask the transfer agent in writing how a gift is processed, by when it must be received to post in 2026, and whether holding-period terms follow the shares.
• Collect the 100% numbers from the issuer’s latest 10-Q or supplement, or an appraisal of the whole entity for a partnership, and every lower tier.
• Decide on discounts with the preparer. If any is claimed, Schedule A line A is answered Yes and an explanation is attached.
• Keep the return’s date. A return filed on or before April 15, 2027 and adequately disclosed starts a clock that would end April 15, 2030 (our reading).
• Keep the sources you used on the gift date for as long as the period can run.

FAQ

Sources, read and saved on October 19, 2026: Rev. Proc. 2025-32 (irs.gov); Instructions for Form 709 (2025) (irs.gov); 26 CFR 25.2511-2, 25.2512-1, 25.2512-2, 25.2512-3, 25.2512-8 and 301.6501(c)-1 (ecfr.gov, current to October 15, 2026); 26 U.S.C. 2010, 2503, 2505, 2512, 6019, 6075 and 6501 (law.cornell.edu); Blackstone Real Estate Income Trust, Form 10-Q for the quarter ended June 30, 2026 (SEC accession 0001662972-26-000111), prospectus supplement No. 6 dated September 16, 2026 (0001662972-26-000136) and prospectus dated August 2025 (0001628280-25-037857); Blackstone Private Credit Fund, Form 10-Q for the quarter ended June 30, 2026 (0001803498-26-000048). Sums, shares and the worked examples are our arithmetic, with the assumptions stated. This is analysis of public documents, not investment, legal or tax advice.