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  • Արժեք 706 - ԱՄՆ-ի Միացյալ Նահանգները (Կենտրոնական Ինստիտուտի)
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Department of the Treasury  
Internal Revenue Service  
Instructions for Form 706  
(Rev. September 2023)  
For decedents dying after December 31, 2022  
United States Estate (and Generation-Skipping Transfer) Tax Return  
Section references are to the Internal Revenue Code unless  
otherwise noted.  
certain estates to obtain an extension of time to file a return  
on or before the fifth anniversary of the decedent’s death to  
elect portability of the deceased spousal unused exclusion  
(DSUE) amount. See Extension to elect portability, later, for  
more information.  
Revisions of Form 706  
For Decedents Dying  
After  
Use Revision of  
Form 706 Dated  
July 1999  
and Before  
January 1, 2001  
January 1, 2002  
January 1, 2003  
January 1, 2004  
January 1, 2005  
January 1, 2006  
January 1, 2007  
January 1, 2008  
January 1, 2009  
January 1, 2010  
January 1, 2011  
January 1, 2012  
January 1, 2013  
January 1, 2017  
January 1, 2018  
January 1, 2019  
December 31, 1998  
December 31, 2000  
December 31, 2001  
December 31, 2002  
December 31, 2003  
December 31, 2004  
December 31, 2005  
December 31, 2006  
December 31, 2007  
December 31, 2008  
December 31, 2009  
December 31, 2010  
December 31, 2011  
December 31, 2012  
December 31, 2016  
December 31, 2017  
December 31, 2018  
General Instructions  
Purpose of Form  
November 2001  
August 2002  
August 2003  
August 2004  
August 2005  
October 2006  
September 2007  
August 2008  
September 2009  
July 2011  
August 2011  
August 2012  
August 2013  
August 2017  
November 2018  
August 2019  
The executor of a decedent's estate uses Form 706 to figure  
the estate tax imposed by chapter 11 of the Internal Revenue  
Code. This tax is levied on the entire taxable estate and not  
just on the share received by a particular beneficiary. Form  
706 is also used to figure the generation-skipping transfer  
(GST) tax imposed by chapter 13 on direct skips (transfers to  
skip persons of interests in property included in the  
decedent's gross estate).  
Which Estates Must File  
For decedents who died in 2023, Form 706 must be filed by  
the executor of the estate of every U.S. citizen or resident:  
a. Whose gross estate, plus adjusted taxable gifts and  
specific exemption, is more than $12,920,000; or  
b. Whose executor elects to transfer the deceased  
spousal unused exclusion (DSUE) amount to the  
surviving spouse, regardless of the size of the decedent's  
gross estate. See the instructions for Part 6—Portability  
of Deceased Spousal Unused Exclusion, later, and  
sections 2010(c)(4) and (c)(5).  
Future Developments  
For the latest information about developments related to  
Form 706 and its instructions, such as legislation enacted  
after they were published, go to IRS.gov/Form706.  
What's New  
To determine whether you must file a return for the estate  
under (a) above, add:  
Various dollar amounts and limitations in Form 706 are  
indexed for inflation. For decedents dying in 2023, the  
following amounts are applicable.  
1. The adjusted taxable gifts (as defined in section 2503)  
made by the decedent after December 31, 1976;  
The basic exclusion amount is $12,920,000.  
The ceiling on special-use valuation is $1,310,000.  
The amount used in figuring the 2% portion of estate tax  
payable in installments is $1,750,000.  
2. The total specific exemption allowed under section 2521  
(as in effect before its repeal by the Tax Reform Act of  
1976) for gifts made by the decedent after September 8,  
1976; and  
The basic credit amount is $5,113,800.  
3. The decedent's gross estate valued as of the date of  
death.  
The IRS will publish amounts for future years in annual  
revenue procedures.  
Gross Estate  
Reminders  
The gross estate includes all property in which the decedent  
had an interest (including property outside the United  
States). It also includes:  
Schedule R-1 is a separate form. Schedule R-1 isn’t part  
of Form 706; instead, you will need to obtain a separate  
Schedule R-1 to complete and file with Form 706.  
Certain transfers made during the decedent's life without  
an adequate and full consideration in money or money's  
worth,  
Identifying exhibits. Copies of tax returns filed with Form  
706 must be identified as exhibits to the Form 706.  
Annuities,  
Estate tax closing letter fee. Effective October 28, 2021, a  
user fee of $67 was established for persons requesting the  
issuance of an estate tax closing letter (ETCL). See ETCL  
fee, later, for more information.  
The includible portion of joint estates with right of  
survivorship (see the instructions for Schedule E),  
The includible portion of tenancies by the entirety (see  
the instructions for Schedule E),  
Extension of time to elect portability. Effective July 8,  
2022, Rev. Proc. 2022-32 provides a simplified method for  
Sep 5, 2023  
Cat. No. 16779E  
           
Certain life insurance proceeds (even though payable to  
beneficiaries other than the estate) (see the instructions  
for Schedule D),  
When To File  
You must file Form 706 to report estate and/or GST tax within  
9 months after the date of the decedent's death. If you are  
unable to file Form 706 by the due date, you may receive an  
extension of time to file. Use Form 4768, Application for  
Extension of Time To File a Return and/or Pay U.S. Estate  
(and Generation-Skipping Transfer) Taxes, to apply for an  
automatic 6-month extension of time to file.  
Digital assets (see the instructions for Schedule F),  
Property over which the decedent possessed a general  
power of appointment,  
Dower or curtesy (or statutory estate) of the surviving  
spouse, and  
Community property to the extent of the decedent's  
interest as defined by applicable law.  
Portability election. An executor can only elect to transfer  
the DSUE amount to the surviving spouse if the Form 706 is  
filed timely, that is, within 9 months of the decedent's date of  
death or, if you have received an extension of time to file,  
before the 6-month extension period ends.  
Extension to elect portability. Executors who did not  
have a filing requirement under section 6018(a) but failed to  
timely file Form 706 to make the portability election may be  
eligible for an extension under Rev. Proc. 2022-32, 2022-30  
I.R.B. 101 (superseding Rev. Proc. 2017-34, 2017-26 I.R.B.  
1282). Executors filing to elect portability may now file Form  
706 on or before the fifth anniversary of the decedent’s death.  
An executor wishing to elect portability under this  
extension must state at the top of the Form 706 being filed  
that the return is “Filed Pursuant to Rev. Proc. 2022-32 to  
Elect Portability under section 2010(c)(5)(A).” For more  
information on this extension, see Rev. Proc. 2022-32.  
Note. Under the special rule of Regulations section  
20.2010-2(a)(7)(ii), executors of estates who are not required  
to file Form 706 under section 6018(a), but who are filing to  
elect portability of the DSUE amount to the surviving spouse,  
are not required to report the value of certain property eligible  
for the marital deduction under section 2056 or 2056A or the  
charitable deduction under section 2055. However, the value  
of those assets must be estimated and included in the total  
value of the gross estate. See the instructions for Part  
5—Recapitulation, items 10 and 23, later, for more  
information.  
For more specific information, see the instructions for  
Schedules A through I.  
U.S. Citizens or Residents; Nonresident  
Noncitizens  
Note. Any estate that is filing an estate tax return only to  
elect portability and did not file timely or within the extension  
provided in Rev. Proc. 2022-32 may seek relief under  
Regulations section 301.9100-3 to make the portability  
election.  
File Form 706 for the estates of decedents who were either  
U.S. citizens or U.S. residents at the time of death. For estate  
tax purposes, a resident is someone who had a domicile in  
the United States at the time of death. A person acquires a  
domicile by living in a place for even a brief period of time, as  
long as the person had no intention of moving from that  
place. See Regulations section 20.0-1(b).  
Where To File  
File Form 706 at the following address.  
Decedents who were neither U.S. citizens nor U.S.  
residents at the time of death file Form 706-NA, United  
States Estate (and Generation-Skipping Transfer) Tax Return,  
Estate of nonresident not a citizen of the United States.  
Department of the Treasury  
Internal Revenue Service  
Kansas City, MO 64999  
If you’re using a private delivery service (PDS), file at this  
address.  
Residents of U.S. Possessions  
All references to citizens of the United States are subject to  
the provisions of sections 2208 and 2209, relating to  
Internal Revenue Submission Processing Center  
333 W. Pershing Road  
decedents who were U.S. citizens and residents of a U.S.  
possession on the date of death. If such decedents became  
U.S. citizens only because of their connections with a  
possession, then the decedents are considered nonresidents  
not citizens of the United States for estate tax purposes, and  
you should file Form 706-NA. If such decedents became U.S.  
citizens wholly independently of their connections with a  
possession, then the decedents are considered U.S. citizens  
for estate tax purposes, and you should file Form 706.  
Kansas City, MO 64108  
If you’re filing an amended Form 706, use the following  
address.  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
7940 Kentucky Drive  
Florence, KY 41042-2915  
Executor  
The term “executor” includes the executor, personal  
representative, or administrator of the decedent's estate. If  
none of these is appointed, qualified, and acting in the United  
States, every person in actual or constructive possession of  
any property of the decedent is considered an executor and  
must file a return.  
If you’re using a PDS for your amended Form 706, use this  
address.  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
7940 Kentucky Drive  
Florence, KY 41042-2915  
Executors must provide documentation proving their  
status. Documentations will vary but may include documents  
such as certified copies of wills or court orders designating  
the executor(s). Statements by executors attesting to their  
status are insufficient.  
-2-  
Instructions for Form 706 (Rev. 09-2023)  
           
The executor who files the return must, in every case, sign  
the declaration on page 1 under penalties of perjury.  
Paying the Tax  
The estate and GST taxes are due within 9 months of the  
date of the decedent's death. You may request an extension  
of time for payment by filing Form 4768. You may also elect  
under section 6166 to pay in installments or under section  
6163 to postpone the part of the tax attributable to a  
reversionary or remainder interest. These elections are made  
by checking “Yes” on lines 3 and 4 (respectively) of Part  
3—Elections by the Executor and attaching the required  
statements.  
Generally, anyone who is paid to prepare the return must  
sign the return in the space provided and fill in the Paid  
Preparer Use Only area. See section 7701(a)(36)(B) for  
exceptions.  
In addition to signing and completing the required  
information, the paid preparer must give a copy of the  
completed return to the executor.  
If the tax paid with the return is different from the balance  
due as figured on the return, explain the difference in an  
attached statement. If you have made prior payments to the  
IRS, attach a statement to Form 706 including these facts.  
Paying by check. Make the check payable to “United States  
Treasury.” Please write the decedent's name, social security  
number (SSN), and “Form 706” on the check to assist us in  
posting it to the proper account.  
No checks of $100 million or more accepted. The IRS  
cannot accept a single check (including a cashier's check) for  
amounts of $100,000,000 ($100 million) or more. If you're  
sending $100 million or more by check, you'll need to spread  
the payments over 2 or more checks, with each check made  
out for an amount less than $100 million. The $100 million or  
more amount limit does not apply to other methods of  
payment (such as electronic payments). Please consider a  
method of payment other than a check if the amount of the  
payment is over $100 million.  
Note. A paid preparer may sign original or amended returns  
by rubber stamp, mechanical device, or computer software  
program.  
Amending Form 706  
If you find that you must change something on a return that  
has already been filed, you should:  
File another Form 706;  
Enter “Supplemental Information” across the top of  
page 1 of the form;  
Include a statement of what has changed, along with the  
supporting information; and  
Attach a copy of pages 1, 2, 3, and 4 of the original Form  
706 that has already been filed.  
For the mailing address for supplemental Form 706, see  
File the amended Form 706 at the following address.  
Paying electronically. Payment of the tax due shown on  
Form 706 may be submitted electronically through the  
Electronic Federal Tax Payment System (EFTPS). EFTPS is  
a free service of the Department of the Treasury.  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
7940 Kentucky Drive  
Florence, KY 41042-2915  
To be considered timely, payments made through EFTPS  
must be completed no later than 8 p.m. Eastern time the day  
before the due date. All EFTPS payments must be scheduled  
in advance of the due date and, if necessary, may be  
changed or canceled up to 2 business days before the  
scheduled payment date.  
To get more information about EFTPS or to enroll in  
EFTPS, visit EFTPS.gov or call 800-555-4477. To contact  
EFTPS using Telecommunications Relay Service (TRS) for  
people who are deaf, hard of hearing, or have a speech  
disability, dial 711 and then provide the TRS assistant the  
800-555-4477 number, above, or 800-733-4829. Additional  
information about EFTPS is available in Pub. 966, Electronic  
Federal Tax Payment System: A Guide to Getting Started.  
If you’re using a PDS, file at this address.  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
7940 Kentucky Drive  
Florence, KY 41042-2915  
If you have already been notified that the return has been  
selected for examination, you should provide the additional  
information directly to the office conducting the examination.  
Supplemental Documents  
Note. You must attach the death certificate to the return.  
If the decedent was a citizen or resident of the United  
States and died testate (leaving a valid will), attach a certified  
copy of the will to the return. If you cannot obtain a certified  
copy, attach a copy of the will and an explanation of why it is  
not certified. Other supplemental documents may be  
required, as explained later. Examples include Form 712, Life  
Insurance Statement; Form 709, United States Gift (and  
Generation-Skipping Transfer) Tax Return; Form 706-CE,  
Certificate of Payment of Foreign Death Tax; trust and power  
of appointment instruments; and state certification of  
payment of death taxes. If you do not file these documents  
with the return, the processing of the return will be delayed.  
Signature and Verification  
If there is more than one executor, all listed executors  
are responsible for the return. However, it is sufficient  
!
CAUTION  
for only one of the co-executors to sign the return.  
All executors are responsible for the return as filed and are  
liable for penalties imposed for erroneous or false returns.  
If two or more persons are liable for filing the return, they  
should all join together in filing one complete return.  
However, if they are unable to join in making one complete  
return, each is required to file a return disclosing all the  
information the person has about the estate, including the  
name of every person holding an interest in the property and  
a full description of the property. If the appointed, qualified,  
and acting executor is unable to make a complete return,  
then every person holding an interest in the property must, on  
notice from the IRS, make a return regarding that interest.  
If the decedent was a U.S. citizen but not a resident of the  
United States, you must attach the following documents to  
the return.  
1. A copy of the inventory of property and the schedule of  
liabilities, claims against the estate, and expenses of  
-3-  
Instructions for Form 706 (Rev. 09-2023)  
       
administration filed with the foreign court of probate  
jurisdiction, certified by a proper official of the court.  
Consistent Basis Reporting  
Certain estates are required to report to the IRS and the  
recipient, the estate tax value of each asset included in the  
gross estate within 30 days of the due date (including  
extensions) of Form 706 or the date of filing Form 706 if the  
return is filed late. The basis of certain assets when sold or  
otherwise disposed of must be consistent with the basis  
(estate tax value) of the asset when it was received by the  
beneficiary. To satisfy the consistent basis reporting  
requirements, the estate must file Form 8971, Information  
Regarding Beneficiaries Acquiring Property From a  
Decedent, separately from the Form 706. Failure to file Form  
8971, when required, is subject to information return  
penalties under sections 6721 and 6722. See Form 8971 and  
its instructions for more information.  
2. A copy of the return filed under the foreign inheritance,  
estate, legacy, succession tax, or other death tax act,  
certified by a proper official of the foreign tax  
department, if the estate is subject to such a foreign tax.  
3. If the decedent died testate, a certified copy of the will.  
Rounding Off to Whole Dollars  
You may round off cents to whole dollars on the return and  
schedules. If you do round to whole dollars, you must round  
all amounts. To round, drop amounts under 50 cents and  
increase amounts from 50 to 99 cents to the next dollar. For  
example, $1.39 becomes $1 and $2.50 becomes $3.  
Penalties  
Estate Tax Closing Letters  
Late filing and late payment. Section 6651 provides for  
penalties for both late filing and for late payment unless there  
is reasonable cause for the delay. The law also provides for  
penalties for willful attempts to evade payment of tax. The  
late filing penalty will not be imposed if the taxpayer can show  
that the failure to file a timely return is due to reasonable  
cause.  
An estate tax closing letter (ETCL) will not be issued unless a  
request is made via Pay.gov. To allow time for processing,  
please wait at least 9 months after filing Form 706 to request  
an ETCL.  
ETCL fee. Effective October 28, 2021, final regulations TD  
9957 established a user fee of $67 for persons requesting the  
issuance of an ETCL. To make an ETCL request after  
October 28, 2021, you must go to Pay.gov to submit a  
request and pay the user fee. Go to Frequently Asked  
and more information related to ETCLs.  
Reasonable-cause determinations. If you receive a notice  
about penalties after you file Form 706, send an explanation  
and we will determine if you meet reasonable-cause criteria.  
Do not attach an explanation when you file Form 706.  
Explanations attached to the return at the time of filing will not  
be considered.  
Valuation understatement. Section 6662 provides a 20%  
penalty for the underpayment of estate tax that exceeds  
$5,000 when the underpayment is attributable to valuation  
understatements. A valuation understatement occurs when  
the value of property reported on Form 706 is 65% or less of  
the actual value of the property.  
This penalty increases to 40% if there is a gross valuation  
understatement. A gross valuation understatement occurs if  
any property on the return is valued at 40% or less of the  
value determined to be correct.  
Penalties also apply to late filing, late payment, and  
underpayment of GST taxes.  
Account transcript in lieu of ETCL. Instead of an ETCL,  
the executor of the estate may request an account transcript,  
which reflects transactions including the acceptance of Form  
706 or the completion of an examination. Account transcripts  
are available online to registered tax professionals using the  
Transcript Delivery System (TDS) or to authorized  
representatives making requests using Form 4506-T. Go to  
instructions to request online transcripts using the TDS or  
hardcopy transcripts using Form 4506-T.  
Note. For information about the release of nonresident U.S.  
citizen decedents' assets using transfer certificates under  
Regulations section 20.6325-1, go to Transfer Certificate  
of the United States or write to:  
Return preparer. Estate tax return preparers who prepare  
any return or claim for refund which reflects an  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
understatement of tax liability due to an unreasonable  
position are subject to a penalty equal to the greater of  
$1,000 or 50% of the income earned (or to be earned) for the  
preparation of each such return.  
7940 Kentucky Drive  
Florence, KY 41042-2915  
Estate tax return preparers who prepare a return or claim  
for refund which reflects an understatement of tax liability due  
to willful or reckless conduct are subject to a penalty of  
$5,000 or 75% of the income earned (or income to be  
earned), whichever is greater, for the preparation of each  
such return.  
Estate tax return preparers who prepare any return or  
claim for a refund are required to furnish a copy to the  
taxpayer, sign the return, and provide their PTIN, but who fail  
to do so, are subject to a penalty of $50 for such failure,  
unless it is shown that such failure is due to reasonable  
cause and not due to willful neglect.  
Obtaining Forms and Publications To  
File or Use  
Internet. You can access the IRS website at IRS.gov 24  
hours a day, 7 days a week to:  
Download forms, including talking tax forms, instructions,  
and publications;  
Order IRS products online;  
Research your tax questions online;  
Search publications online by topic or keyword;  
Use the online Internal Revenue Code, regulations, or  
other official guidance;  
See sections 6694 and 6695, the related regulations, and  
Announcement 2009-15, 2009-11 I.R.B. 687, available at  
Announcement 2009-15, for more information.  
View Internal Revenue Bulletins (IRBs) published in the  
last few years; and  
-4-  
Instructions for Form 706 (Rev. 09-2023)  
         
Sign up to receive local and national tax news by email.  
IF . . .  
THEN . . .  
Other forms that may be required.  
there is not enough space on a  
schedule to list all the items  
attach a Continuation Schedule (or  
additional sheets of the same size) to  
the back of the schedule (see the  
Continuation Schedule at the end of  
Form 706); photocopy the blank  
schedule before completing it, if you  
will need more than one copy.  
Form SS-5, Application for a Social Security Card.  
Form 706-CE, Certificate of Payment of Foreign Death  
Tax.  
Form 706-NA, United States Estate (and  
Generation-Skipping Transfer) Tax Return, Estate of  
nonresident not a citizen of the United States.  
Form 709, United States Gift (and Generation-Skipping  
Transfer) Tax Return.  
Form 712, Life Insurance Statement.  
Form 2848, Power of Attorney and Declaration of  
Representative.  
Also consider the following.  
Form 706 has 29 numbered pages.  
Number the items you list on each schedule, beginning  
with the number “1” each time, or using the numbering  
convention as indicated on the schedule (for example,  
Schedule M).  
Form 4768, Application for Extension of Time To File a  
Return and/or Pay U.S. Estate (and Generation-Skipping  
Transfer) Taxes.  
Form 4808, Computation of Credit for Gift Tax.  
Form 8821, Tax Information Authorization.  
Form 8822, Change of Address.  
Total the items listed on the schedule and its  
attachments, Continuation Schedules, etc.  
Enter the total of all attachments, Continuation  
Schedules, etc., at the bottom of the printed schedule,  
but do not carry the totals forward from one schedule to  
the next.  
Form 8971, Information Regarding Beneficiaries  
Acquiring Property From a Decedent.  
Additional Information. Pub. 559, Survivors, Executors,  
and Administrators, may assist you in learning about and  
preparing Form 706.  
Enter the total, or totals, for each schedule on page 3,  
Part 5—Recapitulation.  
Do not complete the “Alternate valuation date” or  
“Alternate value” columns of any schedule unless you  
elected alternate valuation on Part 3—Elections by the  
Executor, line 1.  
Specific Instructions  
When you complete the return, staple all the required  
pages together in the proper order.  
You must file the first four pages of Form 706 and all required  
schedules. File Schedules A through I, as appropriate, to  
support the entries in items 1 through 9 of Part  
5—Recapitulation.  
Part 1—Decedent and Executor  
Line 2  
Enter the SSN assigned specifically to the decedent. You  
cannot use the SSN assigned to the decedent's spouse. If  
the decedent did not have an SSN, the executor should  
obtain one for the decedent by filing Form SS-5 with a local  
Social Security Administration (SSA) office.  
Make sure to complete the required pages and  
schedules in their entirety. Returns filed without  
!
CAUTION  
entries in each field will not be processed.  
IF . . .  
THEN . . .  
you enter zero on any item of the  
Recapitulation  
you need not file the schedule  
(except for Schedule F) referred to on  
that item.  
Line 6a. Name of Executor  
If there is more than one executor, enter the name of the  
executor to be contacted by the IRS and see line 6d.  
you are estimating the value of  
one or more assets pursuant to  
the special rule of Regulations  
section 20.2010-2(a)(7)(ii)  
you must report the asset on the  
appropriate schedule, but you are not  
required to enter a value for the  
asset. Include the estimated value of  
the asset in the totals entered on Part  
5—Recapitulation, items 10 and 23.  
Line 6b. Executor's Address  
Use Form 8822 to report a change of the executor's address.  
Line 6c. Executor's Social Security Number  
you claim an exclusion on item 12 complete and attach Schedule U.  
Only one executor should complete this line. If there is more  
than one executor, see line 6d.  
you claim any deductions on items complete and attach the appropriate  
14 through 22 of the Recapitulation schedules to support the claimed  
deductions.  
Line 6d. Multiple Executors  
Check here if there is more than one executor. On an  
attached statement, provide the name, address, telephone  
number, and SSN of any executor other than the one named  
on line 6a.  
you claim credits for foreign death complete and attach Schedule P or  
taxes or tax on prior transfers  
Q.  
Line 11. Special Rule  
If the estate is estimating the value of assets under the  
special rule of Regulations section 20.2010-2(a)(7)(ii), check  
here and see the instructions for Part 5—Recapitulation,  
items 10 and 23.  
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Instructions for Form 706 (Rev. 09-2023)  
         
Table A—Unified Rate Schedule  
Column A  
Taxable amount over  
Column B  
Taxable amount not over  
Column C  
Tax on amount in column A  
Column D  
Rate of tax on excess over amount  
in column A  
$0  
10,000  
20,000  
40,000  
60,000  
80,000  
100,000  
150,000  
250,000  
500,000  
750,000  
1,000,000  
$10,000  
20,000  
40,000  
60,000  
80,000  
100,000  
150,000  
250,000  
500,000  
750,000  
1,000,000  
– – – –  
$0  
1,800  
3,800  
8,200  
13,000  
18,200  
23,800  
38,800  
70,800  
155,800  
248,300  
345,800  
18%  
20%  
22%  
24%  
26%  
28%  
30%  
32%  
34%  
37%  
39%  
40%  
Send the following evidence to the IRS.  
Part 2—Tax Computation  
1. Certificate of the proper officer of the taxing state, or the  
District of Columbia, showing the following.  
In general, the estate tax is figured by applying the unified  
rates shown in Table A to the total of transfers both during life  
and at death, and then subtracting the gift taxes, as refigured  
based on the date of death rates. See Worksheet TG, the  
Line 4 Worksheet, and the Line 7 Worksheet.  
a. Total amount of tax imposed (before adding interest  
and penalties and before allowing discount).  
b. Amount of discount allowed.  
Note. You must complete Part 2—Tax Computation.  
c. Amount of penalties and interest imposed or  
charged.  
Line 1  
d. Total amount actually paid in cash.  
e. Date of payment.  
If you elected alternate valuation on Part 3—Elections by the  
Executor, line 1, enter the amount you entered in the  
“Alternate value” column of Part 5—Recapitulation, item 13.  
Otherwise, enter the amount from the “Value at date of death”  
column.  
2. Any additional proof the IRS specifically requests.  
File the evidence requested above with the return, if  
possible. Otherwise, send it as soon as possible after  
the return is filed.  
Line 3b. State Death Tax Deduction  
You may take a deduction on line 3b for estate,  
inheritance, legacy, or succession taxes paid on any property  
included in the gross estate as the result of the decedent's  
death to any state or the District of Columbia.  
Line 6  
To figure the tentative tax on the amount on line 5, use Table  
A—Unified Rate Schedule and put the result on this line.  
You may claim an anticipated amount of deduction and  
figure the federal estate tax on the return before the state  
death taxes have been paid. However, the deduction cannot  
be finally allowed unless you pay the state death taxes and  
claim the deduction within 4 years after the return is filed, or  
later (see section 2058(b)) if:  
Lines 4 and 7  
Three worksheets are provided to help you figure the entries  
for these lines. Worksheet TG—Taxable Gifts Reconciliation  
allows you to reconcile the decedent's lifetime taxable gifts to  
figure totals that will be used for the Line 4 Worksheet and  
the Line 7 Worksheet.  
A petition is filed with the Tax Court of the United States,  
You have an extension of time to pay, or  
You must have all of the decedent's gift tax returns (Forms  
709) before completing Worksheet TG—Taxable Gifts  
Reconciliation. The amounts needed for Worksheet TG can  
usually be found on the filed returns that were subject to tax.  
However, if any of the returns were audited by the IRS, use  
the amounts that were finally determined as a result of the  
audits.  
You file a claim for refund or credit of an overpayment  
which extends the deadline for claiming the deduction.  
Note. The deduction is not subject to dollar limits.  
If you make a section 6166 election to pay the federal  
estate tax in installments and make a similar election to pay  
the state death tax in installments, see section 2058(b) for  
exceptions and periods of limitation.  
If you transfer property other than cash to the state in  
payment of state inheritance taxes, the amount you may  
claim as a deduction is the lesser of the state inheritance tax  
liability discharged or the fair market value (FMV) of the  
property on the date of the transfer. For more information on  
the application of such transfers, see the principles  
discussed in Rev. Rul. 86-117, 1986-2 C.B. 157, prior to the  
repeal of section 2011.  
In addition, you must make a reasonable effort to discover  
any gifts in excess of the annual exclusion made by the  
decedent (or on behalf of the decedent under a power of  
attorney) for which no Forms 709 were filed. Include the value  
of such gifts in column b of Worksheet TG. The annual  
exclusion per donee is as follows.  
-6-  
Instructions for Form 706 (Rev. 09-2023)  
   
Taxable Gift Amount Table  
Annual Exclusion Amount Per  
Donee  
Period  
Column A  
Column B  
Column C  
Column D  
1977 through 1981  
1981 through 2001  
2002 through 2005  
2006 through 2008  
2009 through 2012  
2013 through 2017  
2018 through 2021  
2022  
$3,000  
$10,000  
$11,000  
$12,000  
$13,000  
$14,000  
$15,000  
$16,000  
$17,000  
Amount in Row  
(p), Line 7  
Worksheet over... Worksheet not  
over...  
Amount in Row  
(p), Line 7  
Property Value  
on Amount in  
Column A  
Rate (Divisor)  
on Excess of  
Amount in  
Column A  
0
1,800  
3,800  
0
18%  
20%  
22%  
24%  
26%  
28%  
30%  
32%  
34%  
37%  
39%  
40%  
1,800  
10,000  
20,000  
40,000  
60,000  
80,000  
100,000  
150,000  
250,000  
500,000  
750,000  
1,000,000  
3,800  
8,200  
8,200  
13,000  
18,200  
23,800  
38,800  
70,800  
155,800  
248,300  
345,800  
– – – – – –  
13,000  
18,200  
23,800  
38,800  
70,800  
155,800  
248,300  
345,800  
2023  
How to complete the Line 7 Worksheet.  
Row (a). Beginning with the earliest year in which the taxable  
gifts were made, enter the tax period of prior gifts. If you filed  
returns for gifts made after 1981, enter the calendar year in  
Row (a) as (YYYY). If you filed returns for gifts made after  
1976 and before 1982, enter the calendar quarters in Row (a)  
as (YYYY-Q).  
Worksheet TG—Taxable Gifts Reconciliation  
Worksheet TG—Taxable Gifts Reconciliation  
(To be used for lines 4 and 7 of the Tax Computation)  
a.  
b.  
Note. For the definition of a taxable gift, see section 2503. Follow Form 709. That is, include only  
the decedent’s one-half of split gifts, whether the gifts were made by the decedent or the  
decedent’s spouse. In addition to gifts reported on Form 709, you must include any taxable gifts  
in excess of the annual exclusion that were not reported on Form 709.  
Calendar year or  
calendar quarter  
Total taxable gifts for  
period (see Note)  
Gifts  
made  
after  
June 6,  
1932,  
and  
before  
1977  
c.  
d.  
e.  
f.  
Taxable amount  
included in column b  
for gifts included in  
the gross estate  
Taxable amount included  
in column b for gifts that  
qualify for “special  
treatment of split gifts”  
described below  
Gift tax paid by  
decedent on gifts in  
column d  
Gift tax paid by  
decedent's spouse  
on gifts in column c  
1. Total taxable gifts  
made before 1977  
Gifts  
made  
after  
1976  
2. Totals for gifts made after  
1976  
Line 4 Worksheet—Adjusted Taxable Gifts Made After 1976  
1. Taxable gifts made after 1976. Enter the amount from Worksheet TG, line 2, column b . . . . . . . . . . . . . . . . . . . . . . . . .  
2. Taxable gifts made after 1976 reportable on Schedule G. Enter the amount from Worksheet  
1.  
2.  
TG, line 2, column c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
3. Taxable gifts made after 1976 that qualify for “special treatment.Enter the amount from  
3.  
Worksheet TG, line 2, column d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
4.  
Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  
4.  
5.  
5. Adjusted taxable gifts. Subtract line 4 from line 1. Enter here and on Part 2—Tax Computation, line 4 . . . . . . . . . . . . . .  
-7-  
Instructions for Form 706 (Rev. 09-2023)  
     
Line 7 Worksheet—Submit a copy with Form 706  
Line 7 Worksheet, Part A—Used to determine Applicable Credit Allowable for Prior Periods after 1976  
(a) Tax Period1  
Pre-1977  
(b) Taxable Gifts for Applicable Period  
(c) Taxable Gifts for Prior Periods2  
(d) Cumulative Taxable Gifts Including Applicable  
Period (add Row (b) and Row (c))  
(e) Tax at Date of Death Rates for Prior Gifts (from  
Row (c))3  
(f) Tax at Date of Death Rates for Cumulative  
Taxable Gifts Including Applicable Period (from  
Row (d))  
(g) Tax at Date of Death Rates for Gifts in  
Applicable Period (subtract Row (e) from Row  
(f))  
(h) Total DSUE applied and Restorable Exclusion  
Amount from Prior Periods and Applicable  
Period (see instructions later)  
(i)  
Basic Exclusion for Applicable Period (Enter the  
amount from the Table of Basic Exclusion  
Amounts)  
(j)  
Applicable Exclusion Amount (add Row (h) and  
Row (i))  
(k) Maximum Applicable Credit amount based on  
Row (j) (Using Table A—Unified Rate  
Schedule)4  
(l)  
Applicable Credit amount used in Prior Periods  
(add Row (l) and Row (n) from prior period)  
(m) Available Credit in Applicable Period (subtract  
Row (l) from Row (k))  
(n) Credit Allowable (lesser of Row (g) or Row (m))  
(o) Tax paid or payable at Date of Death rates for  
Applicable Period (subtract Row (n) from Row  
(g))  
(p) Tax on Cumulative Gifts less tax paid or payable  
for Applicable Period (subtract Row (o) from  
Row (f))  
(q) Cumulative Taxable Gifts less Gifts in the  
Applicable Period on which tax was paid or  
payable based on Row (p) (Using the Taxable  
Gift Amount Table)  
(r) Gifts in the Applicable Period on which tax was  
payable (subtract Row (q) from Row (d))  
Line 7 Worksheet, Part B  
1
2
3
4
5
Total gift taxes payable on gifts after 1976 (sum of amounts in Row (o)).  
Gift taxes paid by the decedent on gifts that qualify for “special treatment.Enter the amount from Worksheet TG, line 2, col. e.  
Subtract line 2 from line 1.  
Gift tax paid by decedent's spouse on split gifts included on Schedule G. Enter amount from Worksheet TG, line 2, col. f.  
Add lines 3 and 4. Enter here and on Part 2—Tax Computation, line 7.  
Cumulative lifetime gifts on which tax was paid or payable. Enter this amount on Form 706, Part 6–Portability of Deceased  
6
Spousal Unused Exclusion (DSUE), Section C, line 3 (sum of amounts in Row (r)).  
1 Row (a): For annual returns, enter the tax period as (YYYY). For quarterly returns, enter tax period as (YYYY-Q).  
2 Row (c): Enter amount from Row (d) of the previous column.  
3 Row (e): Enter amount from Row (f) of the previous column.  
4 Row (k): Figure the applicable credit on the amount in Row (j), using Table A—Unified Rate Schedule, and enter here. (For each column in Row (k), subtract 20% of any  
amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977.)  
Row (b). Enter all taxable gifts made in the specified year.  
Enter all pre-1977 gifts in the pre-1977 column.  
Row (c). Enter the amount from Row (d) of the previous  
column.  
Row (h). Complete this row only if a DSUE amount was  
received from predeceased spouse(s) and was applied to  
lifetime gifts or if a Restored Exclusion Amount on taxable  
gifts to a same-sex spouse was applied to lifetime gifts (or  
both). Enter the sum of lines 2 and 3 from Schedule C on the  
Form 709 filed for the year listed in Row (a) for the amount to  
be entered in this row.  
Row (d). Enter the sum of Row (b) and Row (c) from the  
current column.  
Row (e). Enter the amount from Row (f) of the previous  
column.  
Row (i). Enter the applicable amount from the Table of Basic  
Exclusion Amounts.  
Row (f). Enter the tax based on the amount in Row (d) of the  
current column using Table A—Unified Rate Schedule.  
Row (g). Subtract the amount in Row (e) from the amount in  
Row (f) for the current column.  
Row (j). Enter the sum of Row (h) and Row (i).  
Row (k). Figure the applicable credit on the amount in Row  
(j) using Table A—Unified Rate Schedule, and enter here.  
-8-  
Instructions for Form 706 (Rev. 09-2023)  
 
Note. The entries in each column of Row (k) must be  
reduced by 20% of the amount allowed as a specific  
exemption for gifts made after September 8, 1976, and  
before January 1, 1977 (but no more than $6,000).  
Row (l). Add the amounts in Row (l) and Row (n) from the  
previous column.  
Table of Basic Exclusion Amounts  
Basic Exclusion  
Credit Equivalent  
at 2023 Rates  
Period  
Amount  
1977 (Quarters 1 and 2)  
$30,000  
$120,667  
$6,000  
$30,000  
1977 (Quarters 3 and 4)  
Row (m). Subtract the amount in Row (l) from the amount in  
Row (k) to determine the amount of any available credit.  
Enter the result in Row (m).  
1978  
$134,000  
$34,000  
1979  
$147,333  
$38,000  
Row (n). Enter the lesser of the amounts in Row (g) or Row  
(m).  
1980  
$161,563  
$42,500  
1981  
$175,625  
$47,000  
Row (o). Subtract the amount in Row (n) from the amount in  
Row (g) for the current column.  
1982  
$225,000  
$62,800  
Row (p). Subtract the amount in Row (o) from the amount in  
Row (f) for the current column.  
1983  
$275,000  
$79,300  
1984  
$325,000  
$96,300  
Row (q). Enter the Cumulative Taxable Gift amount based on  
the amount in Row (p) using the Taxable Gift Amount Table.  
Row (r). If Row (o) is greater than zero in the applicable  
period, subtract Row (q) from Row (d). If Row (o) is not  
greater than zero, enter -0-.  
1985  
$400,000  
$121,800  
$155,800  
$192,800  
$202,050  
$211,300  
$220,550  
$345,800  
$1,945,800  
$1,993,800  
$2,045,800  
$2,081,800  
$2,117,800  
$2,125,800  
$2,141,800  
$4,417,800  
$4,505,800  
$4,577,800  
$4,625,800  
$4,769,800  
$5,113,800  
1986  
$500,000  
1987 through 1997  
1998  
$600,000  
Repeat for each year in which taxable gifts were made.  
$625,000  
Remember to submit a copy of the Line 7 Worksheet  
1999  
$650,000  
when you file Form 706. If additional space is needed  
!
2000 and 2001  
2002 through 2010  
2011  
$675,000  
CAUTION  
to report prior gifts, please attach additional sheets.  
$1,000,000  
$5,000,000  
$5,120,000  
$5,250,000  
$5,340,000  
$5,430,000  
$5,450,000  
$5,490,000  
$11,180,000  
$11,400,000  
$11,580,000  
$11,700,000  
$12,060,000  
$12,920,000  
2012  
2013  
2014  
2015  
2016  
2017  
2018  
2019  
2020  
2021  
2022  
2023  
Note. In figuring the line 7 amount, do not include any tax  
paid or payable on gifts made before 1977. The line 7 amount  
is a hypothetical figure used to figure the estate tax.  
Special treatment of split gifts. These special rules apply  
only if:  
The decedent's spouse predeceased the decedent;  
The decedent's spouse made gifts that were “split” with  
the decedent under the rules of section 2513;  
The decedent was the “consenting spouse” for those split  
gifts, as that term is used on Form 709; and  
The split gifts were included in the decedent's spouse's  
gross estate under section 2035.  
If all four conditions above are met, do not include these  
gifts on line 4 of the Tax Computation and do not include the  
gift taxes payable on these gifts on line 7 of the Tax  
Computation. These adjustments are incorporated into the  
worksheets.  
-9-  
Instructions for Form 706 (Rev. 09-2023)  
 
However, you may also use line 15 to report credit taken  
for federal gift taxes imposed by chapter 12 of the Code, and  
the corresponding provisions of prior laws, on certain  
transfers the decedent made before January 1, 1977, that are  
included in the gross estate. The credit cannot be more than  
the amount figured by the following formula.  
Lines 9a Through 9e. Applicable Credit Amount  
(Formerly Unified Credit Amount)  
The applicable credit amount is allowable credit against  
estate and gift taxes. It is figured by determining the tentative  
tax on the applicable exclusion amount, which is the amount  
that can be transferred before an estate tax liability will be  
incurred.  
Gross estate tax minus (the sum of the state  
death taxes and unified credit)  
Value of  
included  
gift  
The applicable exclusion amount equals the total of lines  
9a, 9b, and 9c. See Lines 9d and 9e, applicable exclusion  
and credit amount, later, for more information.  
x
Value of gross estate minus (the sum of the  
deductions for charitable, public, and similar  
gifts and bequests and marital deduction)  
Line 9a, basic exclusion amount. In 2023, the basic  
exclusion amount, as adjusted for inflation under section  
2010(c)(3), is $12,920,000.  
When taking the credit for pre-1977 federal gift taxes:  
Include the credit in the amount on line 15; and  
Identify and enter the amount of the credit you are taking  
on the dotted line to the left of the entry space for line 15  
on page 1 of Form 706 with a notation, “Section 2012  
credit.”  
Line 9b, DSUE. If the decedent had a spouse who died after  
2010, whose estate did not use all of its applicable exclusion  
against gift or estate tax liability, a DSUE amount may be  
available for use by the decedent's estate. If the predeceased  
spouse died in 2011, the DSUE amount was figured and  
attached to the predeceased spouse’s Form 706. If the  
predeceased spouse died in 2012 or after, this amount is  
found in Part 6, Section C, of the Form 706 filed by the estate  
of the decedent's predeceased spouse. The amount to be  
entered on line 9b is figured in Part 6, Section D.  
Line 9c, restored exclusion amount. If a decedent made a  
taxable gift during the decedent's lifetime to the decedent's  
same-sex spouse and that transfer resulted in a reduction of  
the decedent's available applicable exclusion amount, the  
amount of the applicable exclusion that was reduced can be  
restored. If the applicable exclusion was previously restored  
on a Form 709, enter the value on Schedule C, line 3, of Form  
709. If the applicable exclusion has not yet been previously  
restored, follow the directions in the instructions for Form  
709, Schedule C, to determine the Restored Exclusion  
Amount. The Restored Exclusion Amount is entered on  
line 9c.  
For more information, see the regulations under section  
2012. This computation may be made using Form 4808.  
Attach a copy of a completed Form 4808 or the computation  
of the credit. Also, attach all available copies of Forms 709  
filed by the decedent, with "Exhibit to Estate Tax Return"  
entered across the top of the first page of each, to help verify  
the amounts entered on lines 4 and 7, and the amount of  
credit taken (on line 15) for pre-1977 federal gift taxes.  
Canadian marital credit. In addition to using line 15 to  
report credit for federal gift taxes on pre-1977 gifts, you may  
also use line 15 to claim the Canadian marital credit, where  
applicable.  
When taking the marital credit under the 1995 Canadian  
Protocol:  
Include the credit in the amount on line 15; and  
Identify and enter the amount of the credit you are taking  
on the dotted line to the left of the entry space for line 15  
on page 1 of Form 706 with a notation, “Canadian marital  
credit.”  
Lines 9d and 9e, applicable exclusion and credit  
amount. The total of lines 9a, 9b, and 9c is entered on  
line 9d. If the amounts entered on both lines 9b and 9c are  
zero, enter $5,113,800 on line 9e. Otherwise, determine the  
applicable credit on the amount on line 9d by using Table  
A—Unified Rate Schedule and enter the result on line 9e.  
Also, attach a statement to the return that refers to the  
treaty, waives qualifying domestic trust (QDOT) rights, and  
shows the computation of the marital credit. See the 1995  
Canadian income tax treaty protocol for details on figuring the  
credit.  
Line 10. Adjustment to Applicable Credit  
If the decedent made gifts (including gifts made by the  
decedent's spouse and treated as made by the decedent by  
reason of gift splitting) after September 8, 1976, and before  
January 1, 1977, for which the decedent claimed a specific  
exemption, the applicable credit amount on this estate tax  
return must be reduced. The reduction is figured by entering  
20% of the specific exemption claimed for these gifts.  
Part 3—Elections by the Executor  
Note. The election to allow the decedent's surviving spouse  
to use the decedent's unused exclusion amount is made by  
filing a timely and complete Form 706. See the instructions  
for Part 6—Portability of Deceased Spousal Unused  
Exclusion, later, and sections 2010(c)(4) and (c)(5).  
Note. The specific exemption was allowed by section 2521  
for gifts made before January 1, 1977.  
Line 1. Alternate Valuation  
If the decedent did not make any gifts between September  
8, 1976, and January 1, 1977, or if the decedent made gifts  
during that period but did not claim the specific exemption,  
enter zero.  
See the example showing the use of Schedule B  
where the alternate valuation is adopted, later.  
TIP  
Unless you elect at the time the return is filed to adopt  
alternate valuation, as authorized by section 2032, value all  
property included in the gross estate as of the date of the  
decedent's death. Alternate valuation cannot be applied to  
only a part of the property.  
You may elect special-use valuation (line 2) in addition to  
alternate valuation.  
Line 15. Total Credits  
Generally, line 15 is used to report the total of credit for  
foreign death taxes (line 13) and credit for tax on prior  
transfers (line 14).  
-10-  
Instructions for Form 706 (Rev. 09-2023)  
           
You may not elect alternate valuation unless the election  
will decrease both the value of the gross estate and the sum  
(reduced by allowable credits) of the estate and GST taxes  
payable by reason of the decedent's death for the property  
includible in the decedent's gross estate.  
stockholders of record after the date of the decedent's death  
so that the shares of stock at the later valuation date do not  
reasonably represent the same property at the date of the  
decedent's death, include those dividends (except dividends  
paid from earnings of the corporation after the date of the  
decedent's death) in the alternate valuation.  
On Schedules A through I, you must show the following.  
1. What property is included in the gross estate on the date  
of the decedent's death.  
Elect alternate valuation by checking “Yes” on line 1 and  
filing Form 706. You may make a protective alternate  
valuation election by checking “Yes” on line 1, writing the  
word “protective,and filing Form 706 using regular values.  
Once made, the election may not be revoked. The election  
may be made on a late-filed Form 706, provided it is not filed  
later than 1 year after the due date (including extensions  
actually granted). Relief under Regulations sections  
301.9100-1 and 301.9100-3 may be available to make an  
alternate valuation election or a protective alternate valuation  
election, provided a Form 706 is filed no later than 1 year  
after the due date of the return (including extensions actually  
granted).  
2. What property was distributed, sold, exchanged, or  
otherwise disposed of within the 6-month period after the  
decedent's death, and the dates of these distributions,  
etc. (These two items should be entered in the  
“Description” column of each schedule. Briefly explain  
the status or disposition governing the alternate  
valuation date, such as “Not disposed of within 6 months  
following death,Distributed,Sold,Bond paid on  
maturity,” etc. In this same column, describe each item of  
principal and includible income.)  
If alternate valuation is elected, value the property  
included in the gross estate as of the following dates, as  
applicable.  
3. The date of death value, entered in the appropriate value  
column with items of principal and includible income  
shown separately.  
Any property distributed, sold, exchanged, or otherwise  
disposed of or separated or passed from the gross estate  
by any method within 6 months after the decedent's  
death is valued on the date of distribution, sale,  
exchange, or other disposition. Value this property on the  
date it ceases to be a part of the gross estate; for  
example, on the date the title passes as the result of its  
sale, exchange, or other disposition.  
4. The alternate value, entered in the appropriate value  
column with items of principal and includible income  
shown separately. (In the case of any interest or estate,  
the value of which is affected by lapse of time, such as  
patents, leaseholds, estates for the life of another, or  
remainder interests, the value shown under the heading  
“Alternate value” must be the adjusted value, for  
example, the value as of the date of death with an  
adjustment reflecting any difference in its value as of the  
later date not due to lapse of time.)  
Any property not distributed, sold, exchanged, or  
otherwise disposed of within the 6-month period is  
valued as of 6 months after the date of the decedent's  
death.  
Any property, interest, or estate that is affected by mere  
lapse of time is valued as of the date of the decedent's  
death or on the date of its distribution, sale, exchange, or  
other disposition, whichever occurs first. However, you  
may change the date of death value to account for any  
change in value that is not due to a “mere lapse of time”  
on the date of its distribution, sale, exchange, or other  
disposition.  
Note. If any property on Schedules A through I is being  
valued pursuant to the special rule of Regulations section  
20.2010-2(a)(7)(ii), values for those assets are not required  
to be reported on the schedule. See Part 5—Recapitulation,  
item 10, later.  
Distributions, sales, exchanges, and other dispositions of  
the property within the 6-month period after the decedent's  
death must be supported by evidence. If the court issued an  
order of distribution during that period, you must submit a  
certified copy of the order as part of the evidence. The IRS  
may require you to submit additional evidence, if necessary.  
The property included in the alternate valuation and  
valued as of 6 months after the date of the decedent's death,  
or as of some intermediate date (as described above), is the  
property included in the gross estate on the date of the  
decedent's death. Therefore, you must first determine what  
property was part of the gross estate at the decedent's death.  
If the alternate valuation method is used, the values of life  
estates, remainders, and similar interests are figured using  
the age of the recipient on the date of the decedent's death  
and the value of the property on the alternate valuation date.  
Interest. Interest accrued to the date of the decedent's  
death on bonds, notes, and other interest-bearing obligations  
is property of the gross estate on the date of death and is  
included in the alternate valuation.  
Rent. Rent accrued to the date of the decedent's death on  
leased real or personal property is property of the gross  
estate on the date of death and is included in the alternate  
valuation.  
Line 2. Special-Use Valuation of Section 2032A  
In general. Under section 2032A, you may elect to value  
certain farm and closely held business real property at its  
farm or business use value rather than its FMV. Both  
special-use valuation and alternate valuation may be elected.  
To elect special-use valuation, check “Yes” on line 2 and  
complete and attach Schedule A-1 and its required additional  
statements. You must file Schedule A-1 and its required  
attachments with Form 706 for this election to be valid. You  
may make the election on a late-filed return so long as it’s the  
first return filed.  
Dividends. Outstanding dividends that were declared to  
stockholders of record on or before the date of the  
decedent's death are considered property of the gross estate  
on the date of death and are included in the alternate  
valuation. Ordinary dividends declared to stockholders of  
record after the date of the decedent's death are not included  
in the gross estate on the date of death and are not eligible  
for alternate valuation. However, if dividends are declared to  
The total value of the property valued under section 2032A  
may not be decreased from FMV by more than $1,310,000  
for decedents dying in 2023.  
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Instructions for Form 706 (Rev. 09-2023)  
 
Real property may qualify for the section 2032A election if:  
Directly owned property leased by the decedent to a  
separate closely held business is considered qualified real  
property if the business entity to which it was rented was a  
closely held business (as defined by section 6166) for the  
decedent on the date of the decedent's death and for  
sufficient time to meet the “5 in 8 years” test explained above.  
Structures and other real property improvements.  
Qualified real property includes residential buildings and  
other structures and real property improvements regularly  
occupied or used by the owner or lessee of real property (or  
by the employees of the owner or lessee) to operate a farm or  
other closely held business. A farm residence that the  
decedent occupied is considered to have been occupied for  
the purpose of operating the farm even when a family  
member and not the decedent was the person materially  
participating in the operation of the farm.  
Qualified real property also includes roads, buildings, and  
other structures and improvements functionally related to the  
qualified use.  
Elements of value such as mineral rights that are not  
related to the farm or business use are not eligible for  
special-use valuation.  
Property acquired from the decedent. Property is  
considered to have been acquired from or to have passed  
from the decedent if one of the following applies.  
1. The decedent was a U.S. citizen or resident at the time of  
death;  
2. The real property is located in the United States;  
3. At the decedent's death, the real property was used by  
the decedent or a family member for farming or in a trade  
or business, or was rented for such use by either the  
surviving spouse or a lineal descendant of the decedent  
to a family member on a net cash basis;  
4. The real property was acquired from or passed from the  
decedent to a qualified heir of the decedent;  
5. The real property was owned and used in a qualified  
manner by the decedent or a member of the decedent's  
family during 5 of the 8 years before the decedent's  
death;  
6. There was material participation by the decedent or a  
member of the decedent's family during 5 of the 8 years  
before the decedent's death; and  
7. The property meets the following percentage  
requirements.  
a. At least 50% of the adjusted value of the gross estate  
must consist of the adjusted value of real or personal  
property that was being used as a farm or in a closely  
held business and that was acquired from, or passed  
from, the decedent to a qualified heir of the  
decedent.  
The property is considered to have been acquired from  
or to have passed from the decedent under section  
1014(b) (relating to basis of property acquired from a  
decedent).  
The property is acquired by any person from the estate.  
The property is acquired by any person from a trust, to  
the extent the property is includible in the gross estate.  
b. At least 25% of the adjusted value of the gross estate  
must consist of the adjusted value of qualified farm or  
closely held business real property.  
Qualified heir. A person is a qualified heir of property if the  
person is a member of the decedent's family and acquired or  
received the property from the decedent. If a qualified heir  
disposes of any interest in qualified real property to any  
member of the qualified heir’s family, that person will then be  
treated as the qualified heir for that interest.  
For this purpose, adjusted value is the value of property  
determined without regard to its special-use value. The value  
is reduced for unpaid mortgages on the property or any  
indebtedness against the property, if the full value of the  
decedent's interest in the property (not reduced by such  
mortgage or indebtedness) is included in the value of the  
gross estate. The adjusted value of the qualified real and  
personal property used in different businesses may be  
combined to meet the 50% and 25% requirements.  
A member of the family includes only:  
An ancestor (parent, grandparent, etc.) of the individual;  
The spouse of the individual;  
The lineal descendant (child, stepchild, grandchild, etc.)  
of the individual, the individual's spouse, or a parent of  
the individual; or  
Qualified Real Property  
Qualified use. Qualified use means use of the property as a  
farm for farming purposes or in a trade or business other than  
farming. Trade or business applies only to the active conduct  
of a business. It does not apply to passive investment  
activities or the mere passive rental of property to a person  
other than a member of the decedent's family. Also, no trade  
or business is present in the case of activities not engaged in  
for profit.  
The spouse or surviving spouse of any lineal descendant  
described above.  
Note. A legally adopted child of an individual is treated as a  
child of that individual by blood.  
Material Participation  
To elect special-use valuation, either the decedent or a  
member of the decedent’s family must have materially  
participated in the operation of the farm or other business for  
at least 5 of the 8 years ending on the date of the decedent's  
death. The existence of material participation is a factual  
determination. Passively collecting rents, salaries, draws,  
dividends, or other income from the farm or other business is  
not sufficient for material participation, nor is merely  
advancing capital and reviewing a crop plan and financial  
reports each season or business year.  
Ownership. To qualify as special-use property, the decedent  
or a member of the decedent's family must have owned and  
used the property in a qualified use for 5 of the last 8 years  
before the decedent's death. Ownership may be direct or  
indirect through a corporation, a partnership, or a trust.  
If the ownership is indirect, the business must qualify as a  
closely held business under section 6166. The indirect  
ownership, when combined with periods of direct ownership,  
must meet the requirements of section 6166 on the date of  
the decedent's death and for a period of time that equals at  
least 5 of the 8 years preceding death.  
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Instructions for Form 706 (Rev. 09-2023)  
     
In determining whether the required participation has  
occurred, disregard brief periods (that is, 30 days or less)  
during which there was no material participation, as long as  
such periods were both preceded and followed by substantial  
periods (more than 120 days) during which there was  
uninterrupted material participation.  
Retirement or disability. If, on the date of death, the time  
period for material participation could not be met because the  
decedent was retired or disabled, a substitute period may  
apply. The decedent must have retired on social security or  
been disabled for a continuous period ending with death. A  
person is disabled for this purpose if the person was mentally  
or physically unable to materially participate in the operation  
of the farm or other business.  
locality as the property being specially valued. You may not  
use:  
Appraisals or other statements regarding rental value or  
areawide averages of rentals,  
Rents paid wholly or partly in-kind, or  
Property for which the amount of rent is based on  
production.  
The rental must have resulted from an arm's-length  
transaction and the amount of rent may not be reduced by  
the amount of any expenses or liabilities associated with the  
farm operation or the lease.  
Comparable property. Comparable property must be  
situated in the same locality as the qualified real property as  
determined by generally accepted real property valuation  
rules. The determination of comparability is based on a  
number of factors, none of which carries more weight than  
the others. It is often necessary to value land in segments  
where there are different uses or land characteristics  
included in the specially valued land.  
The substitute time period for material participation for  
these decedents is a period totaling at least 5 years out of the  
8-year period that ended on the earlier of:  
The date the decedent began receiving social security  
benefits, or  
The date the decedent became disabled.  
The following list contains some of the factors considered  
in determining comparability.  
Surviving spouse. A surviving spouse who received  
qualified real property from the predeceased spouse is  
considered to have materially participated if the surviving  
spouse was engaged in the active management of the farm  
or other business. If the surviving spouse died within 8 years  
of the first spouse's death, you may add the period of  
material participation of the predeceased spouse to the  
period of active management by the surviving spouse to  
determine if the surviving spouse's estate qualifies for  
special-use valuation. To qualify for this, the property must  
have been eligible for special-use valuation in the  
predeceased spouse's estate, though it does not have to  
have been elected by that estate.  
Similarity of soil.  
Whether the crops grown would deplete the soil in a  
similar manner.  
Types of soil conservation techniques that have been  
practiced on the two properties.  
Whether the two properties are subject to flooding.  
Slope of the land.  
For livestock operations, the carrying capacity of the  
land.  
For timbered land, whether the timber is comparable.  
Whether the property as a whole is unified or segmented.  
If segmented, the availability of the means necessary for  
movement among the different sections.  
Number, types, and conditions of all buildings and other  
fixed improvements located on the properties and their  
location as it affects efficient management, use, and  
value of the property.  
For additional details regarding material participation, see  
Regulations section 20.2032A-3(e).  
Valuation Methods  
Availability and type of transportation facilities in terms of  
costs and of proximity of the properties to local markets.  
The primary method of valuing special-use property that is  
used for farming purposes is the annual gross cash rental  
method. If comparable gross cash rentals are not available,  
you can substitute comparable average annual net share  
rentals. If neither of these is available, or if you so elect, you  
can use the method for valuing real property in a closely held  
business.  
Average annual gross cash rental. Generally, the  
special-use value of property that is used for farming  
purposes is determined as follows.  
You must specifically identify on the return the property  
being used as comparable property. Use the type of  
descriptions used to list real property on Schedule A.  
Effective interest rate. See Tables 1 and 2 of Rev. Rul.  
2023-15, 2023-34 I.R.B. 559, available at Rev. Rul. 2023-15,  
for the average annual effective interest rates in effect for  
2023.  
Net share rental. You may use average annual net share  
rental from comparable land only if there is no comparable  
land from which average annual gross cash rental can be  
determined. Net share rental is the difference between the  
gross value of produce received by the lessor from the  
comparable land and the cash operating expenses (other  
than real estate taxes) of growing the produce that, under the  
lease, are paid by the lessor. The production of the produce  
must be the business purpose of the farming operation. For  
this purpose, produce includes livestock.  
1. Subtract the average annual state and local real estate  
taxes on actual tracts of comparable real property from  
the average annual gross cash rental for that same  
comparable property.  
2. Divide the result in (1) by the average annual effective  
interest rate charged for all new federal land bank loans.  
See Effective interest rate, later.  
The gross value of the produce is generally the gross  
amount received if the produce was disposed of in an  
arm's-length transaction within the period established by the  
Department of Agriculture for its price support program.  
Otherwise, the value is the weighted average price for which  
the produce sold on the closest national or regional  
commodities market. The value is figured for the date or  
The computation of each average annual amount is based  
on the 5 most recent calendar years ending before the date  
of the decedent's death.  
Gross cash rental. Generally, gross cash rental is the  
total amount of cash received in a calendar year for the use  
of actual tracts of comparable farm real property in the same  
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Instructions for Form 706 (Rev. 09-2023)  
 
dates on which the lessor received (or constructively  
received) the produce.  
Protective Election  
You may make a protective election to specially value  
qualified real property. Under this election, whether or not you  
may ultimately use special-use valuation depends upon final  
values (as shown on the return determined following  
examination of the return) meeting the requirements of  
section 2032A.  
Valuing a real property interest in a closely held busi-  
ness. Use this method to determine the special-use  
valuation for qualifying real property used in a trade or  
business other than farming. You may also use this method  
for qualifying farm property if there is no comparable land or if  
you elect to use it. Under this method, the following factors  
are considered.  
To make a protective election, check “Yes” on line 2 and  
complete Schedule A-1 according to the instructions for  
The capitalization of income that the property can be  
expected to yield for farming or for closely held business  
purposes over a reasonable period of time with prudent  
management and traditional cropping patterns for the  
area, taking into account soil capacity, terrain  
configuration, and similar factors.  
If you make a protective election, complete the initial Form  
706 by valuing all property at its FMV. Do not use special-use  
valuation. Usually, this will result in higher estate and GST tax  
liabilities than will be ultimately determined if special-use  
valuation is allowed. The protective election does not extend  
the time to pay the taxes shown on the return. If you wish to  
extend the time to pay the taxes, file Form 4768 in adequate  
time before the due date of the return. See the Instructions for  
Form 4768.  
The capitalization of the fair rental value of the land for  
farming or for closely held business purposes.  
The assessed land values in a state that provides a  
differential or use value assessment law for farmland or  
closely held business.  
Comparable sales of other farm or closely held business  
land in the same geographical area far enough removed  
from a metropolitan or resort area so that nonagricultural  
use is not a significant factor in the sales price.  
Any other factor that fairly values the farm or closely held  
business value of the property.  
If the estate qualifies for special-use valuation based on  
the values as finally determined, you must file an amended  
Form 706 (with a complete section 2032A election) within 60  
days after the date of this determination. Prepare the  
amended return using special-use values under the rules of  
section 2032A, complete Schedule A-1, and attach all of the  
required statements.  
Making the Election  
Include the words “Section 2032A valuation” in the  
“Description” column of any Form 706 schedule if section  
2032A property is included in the decedent's gross estate.  
Additional Information  
For definitions and additional information, see section 2032A  
and the related regulations.  
An election under section 2032A need not include all the  
property in an estate that is eligible for special-use valuation,  
but sufficient property to satisfy the threshold requirements of  
section 2032A(b)(1)(B) must be specially valued under the  
election.  
Line 3. Section 6166 Installment Payments  
If the gross estate includes an interest in a closely held  
business, you may be able to elect to pay part of the estate  
tax in installments under section 6166.  
If joint or undivided interests (that is, interests as joint  
tenants or tenants in common) in the same property are  
received from a decedent by qualified heirs, an election for  
one heir's joint or undivided interest need not include any  
other heir's interest in the same property if the electing heir's  
interest plus other property to be specially valued satisfies  
the requirements of section 2032A(b)(1)(B).  
The maximum amount that can be paid in installments is  
that part of the estate tax that is attributable to the closely  
held business; see Determine how much of the estate tax  
may be paid in installments under section 6166, later. In  
general, that amount is the amount of tax that bears the same  
ratio to the total estate tax that the value of the closely held  
business included in the gross estate bears to the adjusted  
gross estate.  
Bond or lien. The IRS may require that an estate furnish a  
surety bond when granting the installment payment election.  
In the alternative, the executor may consent to elect the  
special lien provisions of section 6324A in lieu of the bond.  
The IRS will contact you regarding the specifics of furnishing  
the bond or electing the special lien. The IRS will make this  
determination on a case-by-case basis, and you may be  
asked to provide additional information.  
If you elect the lien provisions, section 6324A requires that  
the lien be placed on property having a value equal to the  
total deferred tax plus 4 years of interest. The property must  
be expected to survive the deferral period, and does not  
necessarily have to be property of the estate. In addition, all  
people with an interest in the designated property must  
consent to the creation of this lien.  
If successive interests (that is, life estates and remainder  
interests) are created by a decedent in otherwise qualified  
property, an election under section 2032A is available only for  
that property (or part) in which qualified heirs of the decedent  
receive all of the successive interests, and such an election  
must include the interests of all of those heirs.  
For example, if a surviving spouse receives a life estate in  
otherwise qualified property and the spouse's sibling  
receives a remainder interest in fee, no part of the property  
may be valued under a section 2032A election.  
Where successive interests in specially valued property  
are created, remainder interests are treated as being  
received by qualified heirs only if the remainder interests are  
not contingent on surviving a nonfamily member or are not  
subject to divestment in favor of a nonfamily member.  
Percentage requirements. To qualify for installment  
payments, the value of the interest in the closely held  
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Instructions for Form 706 (Rev. 09-2023)  
   
business that is included in the gross estate must be more  
than 35% of the adjusted gross estate (the gross estate less  
expenses, indebtedness, taxes, and losses—Schedules J, K,  
and L of Form 706 (do not include any portion of the state  
death tax deduction)).  
Interests in two or more closely held businesses are  
treated as an interest in a single business if at least 20% of  
the total value of each business is included in the gross  
estate. For this purpose, include any interest held by the  
surviving spouse that represents the surviving spouse's  
interest in a business held jointly with the decedent as  
community property or as joint tenants, tenants by the  
entirety, or tenants in common.  
corporation is included in the gross estate of the  
decedent or the corporation had no more than 45  
shareholders.  
The partnership or corporation must be carrying on a trade  
or business at the time of the decedent's death. For further  
information on whether certain partnerships or corporations  
owning real property interests constitute a closely held  
business, see Rev. Rul. 2006-34, 2006-26 I.R.B. 1171,  
available at Rev. Rul. 2006-34.  
In determining the number of partners or shareholders, a  
partnership or stock interest is treated as owned by one  
partner or shareholder if it is community property or held by  
spouses as joint tenants, tenants in common, or tenants by  
the entirety.  
Property owned directly or indirectly by or for a  
corporation, partnership, estate, or trust is treated as owned  
proportionately by or for its shareholders, partners, or  
beneficiaries. For trusts, only beneficiaries with present  
interests are considered.  
The interest in a closely held farm business includes the  
interest in the residential buildings and related improvements  
occupied regularly by the owners, lessees, and employees  
operating the farm.  
Holding company stock. The executor may elect to treat  
as business company stock the portion of any holding  
company stock that represents direct ownership (or indirect  
ownership through one or more other holding companies) in  
a business company. A holding company is a corporation  
holding stock in another corporation. A business company is  
a corporation carrying on a trade or business.  
In general, this election applies only to stock that is not  
readily tradable. However, the election can be made if the  
business company stock is readily tradable, as long as all of  
the stock of each holding company is not readily tradable.  
For purposes of the 20%-voting-stock requirement, stock  
is treated as voting stock to the extent the holding company  
owns voting stock in the business company.  
If the executor makes this election, the first installment  
payment is due when the estate tax return is filed. The 5-year  
deferral for payment of the tax, as discussed later under Time  
for payment, does not apply. In addition, the 2% interest rate,  
discussed later under Interest computation, will not apply.  
Also, if the business company stock is readily tradable, as  
explained above, the tax must be paid in five installments.  
Value. The value used for meeting the percentage  
requirements is the same value used for determining the  
gross estate. Therefore, if the estate is valued under alternate  
valuation or special-use valuation, you must use those values  
to meet the percentage requirements.  
Transfers before death. Generally, gifts made before  
death are not included in the gross estate. However, the  
estate must meet the 35% requirement by both including in  
and excluding from the gross estate any gifts made by the  
decedent in the 3-year period ending on the date of death.  
Passive assets. In determining the value of a closely held  
business and whether the 35% requirement is met, do not  
include the value of any passive assets held by the business.  
A passive asset is any asset not used in carrying on a trade  
or business. Any asset used in a qualifying lending and  
financing business is treated as an asset used in carrying on  
a trade or business; see section 6166(b)(10) for details.  
Stock in another corporation is a passive asset unless the  
stock is treated as held by the decedent because of the  
election to treat holding company stock as business  
company stock; see Holding company stock, later.  
If a corporation owns at least 20% in value of the voting  
stock of another corporation, or the other corporation had no  
more than 45 shareholders and at least 80% of the value of  
the assets of each corporation is attributable to assets used  
in carrying on a trade or business, then these corporations  
will be treated as a single corporation and the stock will not  
be treated as a passive asset. Stock held in the other  
corporation is not taken into account in determining the 80%  
requirement.  
Interest in a closely held business. For purposes of the  
installment payment election, an interest in a closely held  
business means:  
Determine how much of the estate tax may be paid in in-  
stallments under section 6166. To determine whether the  
election may be made, you must figure the adjusted gross  
estate. (See the Line 3 Worksheet—Adjusted Gross Estate  
below.) To determine the value of the adjusted gross estate,  
subtract the deductions (Schedules J, K, and L) from the  
value of the gross estate.  
Ownership of a trade or business carried on as a  
proprietorship;  
An interest as a partner in a partnership carrying on a  
trade or business, if 20% or more of the total capital  
interest was included in the gross estate of the decedent  
or the partnership had no more than 45 partners; or  
Stock in a corporation carrying on a trade or business, if  
20% or more in value of the voting stock of the  
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Instructions for Form 706 (Rev. 09-2023)  
Line 3 Worksheet—Adjusted Gross Estate  
1.  
Enter the value of the decedent's interest in closely held business(es) included in the gross estate (less value of  
passive assets, as mentioned in section 6166(b)(9))  
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2.  
3.  
4.  
5.  
Enter the value of the gross estate (Form 706, Part 5, item 13)  
Add items 18, 19, and 20 from Form 706, Part 5  
Subtract line 3 from line 2 to figure the adjusted gross estate  
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Divide line 1 by line 4 to figure the value the business interest bears to the value of the adjusted gross estate. For  
purposes of this calculation, carry the decimal to the sixth place; the IRS will make this adjustment for purposes  
of determining the correct amount. If this amount is less than 0.350000, the estate does not qualify to make the  
election under section 6166  
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6.  
Multiply line 5 by the amount on line 16 of Form 706, Part 2. This is the maximum amount of estate tax that may  
be paid in installments under section 6166. (Certain GST taxes may be deferred as well; see section 6166(i) for  
more information.)  
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To determine over how many installments the estate tax  
Computation. Interest on the portion of the tax in excess  
may be paid, please refer to sections 6166(a), (b)(7), (b)(8),  
and (b)(10).  
of the 2% portion is figured at 45% of the annual rate of  
interest on underpayments. This rate is based on the federal  
short-term rate and is announced quarterly by the IRS in the  
Internal Revenue Bulletin.  
Time for payment. Under the installment method, the  
executor may elect to defer payment of the qualified estate  
tax, but not interest, for up to 5 years from the original  
payment due date. After the first installment of tax is paid,  
If you elect installment payments and the estate tax due is  
more than the maximum amount to which the 2% interest rate  
applies, each installment payment is deemed to comprise  
both tax subject to the 2% interest rate and tax subject to  
45% of the regular underpayment rate. The amount of each  
installment that is subject to the 2% rate is the same as the  
percentage of total tax payable in installments that is subject  
to the 2% rate.  
you must pay the remaining installments annually by the date  
1 year after the due date of the preceding installment. There  
can be no more than 10 installment payments.  
Interest on the unpaid portion of the tax is not deferred and  
must be paid annually. Interest must be paid at the same time  
as and as a part of each installment payment of the tax.  
The interest paid on installment payments is not  
Acceleration of payments. If the estate fails to make  
payments of tax or interest within 6 months of the due date,  
the IRS may terminate the right to make installment payments  
and force an acceleration of payment of the tax upon notice  
and demand. Upon notice and demand, a penalty will be  
imposed for an amount that is 5% of the payment multiplied  
by the number of months (or fractions thereof) after the due  
date and before the payment is made.  
Generally, if any portion of the interest in the closely held  
business which qualifies for installment payments is  
distributed, sold, exchanged, or otherwise disposed of, or  
money and other property attributable to such an interest is  
withdrawn, and the aggregate of those events equals or  
exceeds 50% of the value of the interest, then the right to  
make installment payments will be terminated, and the  
unpaid portion of the tax will be due upon notice and  
demand. See section 6166(g)(1)(A).  
deductible as an administrative expense of the  
!
CAUTION  
estate.  
Making the election. If you check this line to make a final  
election, you must attach the notice of election described in  
Regulations section 20.6166-1(b). If you check this line to  
make a protective election, you must attach a notice of  
protective election as described in Regulations section  
20.6166-1(d). Regulations section 20.6166-1(b) requires that  
the notice of election is made by attaching to a timely filed  
estate tax return the following information.  
The decedent's name and taxpayer identification number  
(TIN) as they appear on the estate tax return.  
The amount of tax that is to be paid in installments.  
The date selected for payment of the first installment.  
The number of annual installments, including first  
installment, in which the tax is to be paid.  
The properties shown on the estate tax return that are the  
closely held business interest (identified by schedule and  
item number).  
Interest computation. A special interest rate applies to  
installment payments. For decedents dying in 2023, the  
interest rate is 2% on the lesser of:  
The facts that formed the basis for the executor's  
conclusion that the estate qualifies for payment of the  
estate tax in installments.  
$700,000, or  
The amount of the estate tax that is attributable to the  
closely held business and that is payable in installments.  
You may also elect to pay certain GST taxes in  
2% portion. The 2% portion is an amount equal to the  
amount of the tentative estate tax (on $1 million plus the  
applicable exclusion amount in effect) minus the applicable  
credit amount in effect. However, if the amount of estate tax  
extended under section 6166 is less than the amount figured  
above, the 2% portion is the lesser amount.  
installments. See section 6166(i).  
Line 4. Reversionary or Remainder Interests  
For details of this election, see section 6163 and the related  
regulations.  
Inflation adjustment. The $1 million amount used to  
figure the 2% portion is indexed for inflation for the estates of  
decedents who died in a calendar year after 1998. For an  
estate of a decedent who died in 2023, the dollar amount  
used to determine the “2% portion” of the estate tax payable  
in installments under section 6166 is $1,750,000.  
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Instructions for Form 706 (Rev. 09-2023)  
     
Identifying number. Enter the SSN of each individual  
beneficiary listed. If the number is unknown, or the individual  
has no number, please indicate “unknown” or “none.” For  
trusts and other estates, enter the employer identification  
number (EIN).  
Relationship. For each individual beneficiary, enter the  
relationship (if known) to the decedent by reason of blood,  
marriage, or adoption. For trust or estate beneficiaries,  
indicate “TRUST” or “ESTATE.”  
Amount. Enter the amount actually distributed (or to be  
distributed) to each beneficiary including transfers during the  
decedent's life from Schedule G required to be included in  
the gross estate. The value to be entered need not be exact.  
A reasonable estimate is sufficient. For example, where  
precise values cannot readily be determined, as with certain  
future interests, a reasonable approximation should be  
entered. The total of these distributions should approximate  
the amount of gross estate reduced by funeral and  
Part 4—General Information  
Authorization  
Completing the authorization will authorize one attorney,  
accountant, or enrolled agent to represent the estate and  
receive confidential tax information, but will not authorize the  
representative to enter into closing agreements for the estate.  
If you would like to authorize your representative to enter into  
agreements or perform other designated acts on behalf of the  
estate, you must file Form 2848 with Form 706.  
Note. If you intend for the representative to represent the  
estate before the IRS, the representative must complete and  
sign this authorization.  
Complete and attach Form 2848 if you would like to  
authorize:  
Persons other than attorneys, accountants, or enrolled  
agents to represent the estate;  
administrative expenses, debts and mortgages, bequests to  
surviving spouse, charitable bequests, and any federal and  
state estate and GST taxes paid (or payable) relating to the  
benefits received by the beneficiaries listed on lines 4 and 5.  
All distributions of less than $5,000 to specific  
beneficiaries may be included with distributions to  
unascertainable beneficiaries on the line provided.  
More than one person to receive confidential information  
or represent the estate; or  
Someone to sign agreements, consents, waivers, or  
other documents for the estate.  
Filing a completed Form 2848 with this return may  
expedite processing of the Form 706.  
Line 6. Protective Claim for Refund  
If you wish only to authorize someone to inspect and/or  
receive confidential tax information (but not to represent you  
before the IRS), complete and file Form 8821.  
If you answered “Yes,complete Schedule PC for each claim.  
Two copies of each Schedule PC must be filed with the  
return.  
Line 3  
A protective claim for refund may be filed when there is an  
unresolved claim or expense that will not be deductible under  
section 2053 before the expiration of the period of limitation  
under section 6511(a). To preserve the estate's right to a  
refund once the claim or expense has been finally  
Enter the marital status of the decedent at the time of death  
by checking the appropriate box on line 3a. If the decedent  
was married at the time of death, complete line 4. If the  
decedent had one or more prior marriages, complete line 3b  
by providing the name and SSN of each former spouse, the  
date(s) the marriage ended, and specify whether the  
marriage ended by annulment, divorce decree, or death of  
spouse. If the prior marriage ended in death and the  
predeceased spouse died after December 31, 2010,  
complete Part 6—Portability of Deceased Spousal Unused  
Exclusion, Section D, if the estate of the predeceased  
spouse elected to allow the decedent to use any unused  
exclusion amount. For more information, see section 2010(c)  
(4) and related regulations.  
determined, the protective claim must be filed before the end  
of the limitations period. For more information on how to file a  
protective claim for refund with this Form 706, see the  
instructions for Schedule PC, later.  
Line 7. Section 2044 Property  
If you answered “Yes,these assets must be shown on  
Schedule F.  
Section 2044 property is property for which a previous  
section 2056(b)(7) election (QTIP election) has been made,  
or for which a similar gift tax election (section 2523) has been  
made. For more information, see the instructions for  
Schedule F, later.  
Line 4  
Complete line 4 whether or not there is a surviving spouse  
and whether or not the surviving spouse received any  
benefits from the estate. If there was no surviving spouse on  
the date of the decedent's death, enter “None” on line 4a and  
leave lines 4b and 4c blank. The value entered on line 4c  
need not be exact. See Amount under line 5, later.  
Line 9. Insurance Not Included in the Gross  
Estate  
If you answered “Yes” to either line 9a or 9b, for each policy  
you must complete and attach Schedule D, Form 712, and an  
explanation of why the policy or its proceeds are not  
includible in the gross estate.  
Note. Do not include any DSUE amount transferred to the  
surviving spouse in the total entered on line 4c.  
Line 5  
Line 11. Partnership Interests and Stock in  
Close Corporations  
Name. Enter the name of each individual, trust, or estate  
that received (or will receive) benefits of $5,000 or more from  
the estate directly as an heir, next-of-kin, devisee, or legatee;  
or indirectly (for example, as beneficiary of an annuity or  
insurance policy, shareholder of a corporation, or partner of a  
partnership that is an heir, etc.).  
If you answered “Yes” on line 11a, you must include full  
details for partnerships (including family limited  
partnerships), unincorporated businesses, and limited liability  
companies (LLCs) on Schedule F (Schedule E if the  
partnership interest is jointly owned). Also include full details  
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Instructions for Form 706 (Rev. 09-2023)  
       
for fractional interests in real estate on Schedule A and for  
stock of inactive or close corporations on Schedule B.  
Schedule H, if you answered “Yes” to question 14 of Part  
4—General Information.  
Schedule I, if you answered “Yes” to question 16 of Part  
4—General information.  
Value these interests using the rules of Regulations  
section 20.2031-2 (stocks) or 20.2031-3 (other business  
interests).  
Item 10. Under Regulations section 20.2010-2(a)(7)(ii), if  
the total value of the gross estate and adjusted taxable gifts  
is less than the basic exclusion amount (see section 6018(a))  
and Form 706 is being filed only to elect portability of the  
DSUE amount, the estate is not required to report the value  
of certain property eligible for the marital or charitable  
deduction. For this property being reported on Schedules A,  
B, C, D, E, F, G, H, and I, the executor must figure the best  
estimate of the value. Do not include the estimated value on  
the line corresponding to the schedule on which the property  
was reported. Instead, total the estimated value of the assets  
subject to the special rule and enter on item 10 the amount  
from the Table of Estimated Values, later, that corresponds to  
that total.  
A close corporation is a corporation whose shares are  
owned by a limited number of shareholders. Often, one family  
holds the entire stock issue. As a result, little, if any, trading of  
the stock takes place. There is, therefore, no established  
market for the stock, and those sales that do occur are at  
irregular intervals and seldom reflect all the elements of a  
representative transaction as defined by FMV.  
Line 13. Trusts  
If you answered “Yes” on either line 13a or line 13b, attach a  
copy of the trust instrument for each trust.  
Complete Schedule G if you answered “Yes” on line 13a  
and Schedule F if you answered “Yes” on line 13b.  
Note. The special rule does not apply if the valuation of the  
asset is needed to determine the estate's eligibility for the  
provisions of section 2032, 2032A, 2652(a)(3), or 6166, or  
any other provision of the Code or regulations.  
Line 15. Foreign Accounts  
Check “Yes” on line 15 if the decedent at the time of death  
had an interest in or signature or other authority over a  
financial account in a foreign country, such as a bank  
account, securities account, an offshore trust, or other  
financial account.  
Note. As applies to all other values reported on Form 706,  
estimates of the value of property subject to the special rule  
of Regulations section 20.2010-2(a)(7)(ii) must result from  
the executor’s exercise of due diligence and are subject to  
penalties of perjury.  
Part 5—Recapitulation  
Exclusion—Item 12  
Gross Estate—Items 1 Through 11  
Item 12. Conservation easement exclusion. Complete  
and attach Schedule U (along with any required attachments)  
to claim the exclusion on this line.  
Items 1 through 9. You must make an entry in each of items  
1 through 9.  
If the gross estate does not contain any assets of the type  
specified by a given item, enter zero for that item. Entering  
zero for any of items 1 through 9 is a statement by the  
executor, made under penalties of perjury, that the gross  
estate does not contain any includible assets covered by that  
item.  
Do not enter any amounts in the “Alternate value” column  
unless you elected alternate valuation on Part 3—Elections  
by the Executor, line 1.  
Deductions—Items 14 Through 23  
Items 14 through 22. Attach the appropriate schedules for  
the deductions claimed.  
Item 18. If item 17 is less than or equal to the value (at the  
time of the decedent's death) of the property subject to  
claims, enter the amount from item 17 on item 18.  
If the amount on item 17 is more than the value of the  
property subject to claims, enter the greater of:  
Note. If estimating the value of one or more assets pursuant  
to the special rule of Regulations section 20.2010-2(a)(7)(ii),  
do not enter values for those assets in items 1 through 9.  
Total the estimated values for those assets and follow the  
instructions for item 10.  
The value of the property subject to claims, or  
The amount actually paid at the time the return is filed.  
In no event should you enter more on item 18 than the  
amount on item 17. See section 2053 and the related  
regulations for more information.  
Which schedules to attach for items 1 through 9. You  
Item 23. Under Regulations section 20.2010-2(a)(7)(ii), if  
the total value of the gross estate and adjusted taxable gifts  
is less than the basic exclusion amount (see section 6018(a))  
and Form 706 is being filed only to elect portability of the  
DSUE amount, the estate is not required to report the value  
of certain property eligible for the marital or charitable  
deduction. For this property being reported on Schedule M or  
O, enter on item 23 the amount from item 10.  
must attach the following.  
Schedule F. Answer its questions even if you report no  
assets on it.  
Schedules A, B, and C, if the gross estate includes any  
(1) Real Estate, (2) Stocks and Bonds, or (3) Mortgages,  
Notes, and Cash, respectively.  
Schedule D, if the gross estate includes any life  
insurance or if you answered “Yes” to question 9a of Part  
4—General Information.  
Schedule E, if the gross estate contains any jointly  
owned property or if you answered “Yes” to question 10  
of Part 4—General Information.  
Part 6—Portability of Deceased  
Spousal Unused Exclusion (DSUE)  
Schedule G, if the decedent made any of the lifetime  
transfers to be listed on that schedule or if you answered  
Yes” to question 12 or 13a of Part 4—General  
Information.  
Section 2010(c)(4) authorizes estates of decedents dying  
after December 31, 2010, to elect to transfer any unused  
exclusion to the surviving spouse. The amount received by  
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Instructions for Form 706 (Rev. 09-2023)  
           
Table of Estimated Values  
If the total estimated value of the assets  
eligible for the special rule under Reg.  
section 20.2010-2(a)(7)(ii) is more than:  
But less than or equal to:  
Include this amount on lines 10 and 23:  
$0  
$250,000  
$250,000  
$500,000  
$250,000  
$500,000  
$500,000  
$750,000  
$750,000  
$750,000  
$1,000,000  
$1,250,000  
$1,500,000  
$1,750,000  
$2,000,000  
$2,250,000  
$2,500,000  
$2,750,000  
$3,000,000  
$3,250,000  
$3,500,000  
$3,750,000  
$4,000,000  
$4,250,000  
$4,500,000  
$4,750,000  
$5,000,000  
$5,250,000  
$5,500,000  
$5,750,000  
$6,000,000  
$6,250,000  
$6,500,000  
$6,750,000  
$7,000,000  
$7,250,000  
$7,500,000  
$7,750,000  
$8,000,000  
$8,250,000  
$8,500,000  
$8,750,000  
$9,000,000  
$9,250,000  
$9,500,000  
$9,750,000  
$10,000,000  
$10,250,000  
$10,500,000  
$10,750,000  
$11,000,000  
$1,000,000  
$1,250,000  
$1,500,000  
$1,750,000  
$2,000,000  
$2,250,000  
$2,500,000  
$2,750,000  
$3,000,000  
$3,250,000  
$3,500,000  
$3,750,000  
$4,000,000  
$4,250,000  
$4,500,000  
$4,750,000  
$5,000,000  
$5,250,000  
$5,500,000  
$5,750,000  
$6,000,000  
$6,250,000  
$6,500,000  
$6,750,000  
$7,000,000  
$7,250,000  
$7,500,000  
$7,750,000  
$8,000,000  
$8,250,000  
$8,500,000  
$8,750,000  
$9,000,000  
$9,250,000  
$9,500,000  
$9,750,000  
$10,000,000  
$10,250,000  
$10,500,000  
$10,750,000  
$11,000,000  
$1,000,000  
$1,250,000  
$1,500,000  
$1,750,000  
$2,000,000  
$2,250,000  
$2,500,000  
$2,750,000  
$3,000,000  
$3,250,000  
$3,500,000  
$3,750,000  
$4,000,000  
$4,250,000  
$4,500,000  
$4,750,000  
$5,000,000  
$5,250,000  
$5,500,000  
$5,750,000  
$6,000,000  
$6,250,000  
$6,500,000  
$6,750,000  
$7,000,000  
$7,250,000  
$7,500,000  
$7,750,000  
$8,000,000  
$8,250,000  
$8,500,000  
$8,750,000  
$9,000,000  
$9,250,000  
$9,500,000  
$9,750,000  
$10,000,000  
$10,250,000  
$10,500,000  
$10,750,000  
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Instructions for Form 706 (Rev. 09-2023)  
 
Table of Estimated Values (continued)  
If the total estimated value of the assets  
eligible for the special rule under Reg.  
section 20.2010-2(a)(7)(ii) is more than:  
But less than or equal to:  
Include this amount on lines 10 and 23:  
$11,000,000  
$11,180,000  
$11,400,000  
$11,580,000  
$11,700,000  
$12,060,000  
$11,180,000  
$11,400,000  
$11,580,000  
$11,700,000  
$12,060,000  
$12,920,000  
$11,180,000  
$11,400,000  
$11,580,000  
$11,700,000  
$12,060,000  
$12,920,000  
the surviving spouse is called the deceased spousal unused  
exclusion (DSUE) amount. If the executor of the decedent’s  
estate elects transfer, or portability, of the DSUE amount, the  
surviving spouse can apply the DSUE amount received from  
the estate of the surviving spouse’s last deceased spouse  
(defined later) against any tax liability arising from  
The timely filing of a complete Form 706 with DSUE will be  
deemed a portability election if there is a surviving spouse.  
The election is effective as of the decedent’s date of death,  
so the DSUE amount received by a surviving spouse may be  
applied to any transfer occurring after the decedent’s death.  
A portability election is irrevocable, unless an adjustment or  
amendment to the election is made on a subsequent return  
filed on or before the due date.  
subsequent lifetime gifts and transfers at death.  
Note. A nonresident surviving spouse who is not a citizen of  
the United States may not take into account the DSUE  
amount of a deceased spouse, except to the extent allowed  
by treaty with the nonresident surviving spouse’s country of  
citizenship.  
Note. Under Regulations section 20.2010-2(a)(5), the  
executor of an estate of a nonresident decedent who was not  
a citizen of the United States at the time of death cannot  
make a portability election.  
If an executor is appointed, qualified, and acting with the  
United States on behalf of the decedent’s estate, only that  
executor may make or opt out of a portability election. If there  
is no executor, see Regulations section 20.2010-2(a)(6)(ii).  
Last Deceased Spouse Limitation  
The last deceased spouse is the most recently deceased  
person who was married to the surviving spouse at the time  
of that person’s death. The identity of the last deceased  
spouse is determined as of the day a taxable gift is made, or  
in the case of a transfer at death, the date of the surviving  
spouse's death. The identity of the last deceased spouse is  
not impacted by whether the decedent's estate elected  
portability or whether the last deceased spouse had any  
DSUE amount available. Remarriage also does not affect the  
designation of the last deceased spouse and does not  
prevent the surviving spouse from applying the DSUE  
amount to taxable transfers.  
Opting Out  
If an estate files a Form 706 but does not wish to make the  
portability election, the executor can opt out of the portability  
election by checking the box indicated in Section A of this  
Part. If no return is required under section 6018(a), not filing  
Form 706 will avoid making the election.  
Figuring the DSUE Amount  
Regulations section 20.2010-2(b)(1) requires that a  
When a taxable gift is made, the DSUE amount received  
from the last deceased spouse is applied before the surviving  
spouse’s basic exclusion amount. A surviving spouse may  
use the DSUE amount of the last deceased spouse to offset  
the tax on any taxable transfer made after the deceased  
spouse's death. A surviving spouse who has more than one  
predeceased spouse is not precluded from using the DSUE  
amount of each spouse in succession. A surviving spouse  
may not use the sum of DSUE amounts from multiple  
predeceased spouses at one time nor may the DSUE amount  
of a predeceased spouse be applied after the death of a  
subsequent spouse.  
decedent's DSUE be figured on the estate tax return. The  
DSUE amount is the lesser of (a) the basic exclusion amount  
in effect on the date of death of the decedent whose DSUE is  
being figured, or (b) the decedent's applicable exclusion  
amount less the amount on line 5 of Part 2—Tax Computation  
on the Form 706 for the estate of the decedent. Amounts on  
which gift taxes were paid are excluded from adjusted taxable  
gifts for the purpose of this computation.  
When a surviving spouse applies the DSUE amount to a  
lifetime gift or bequest at death, the IRS may examine any  
return of a predeceased spouse whose executor elected  
portability to verify the allowable DSUE amount. The DSUE  
amount may be adjusted or eliminated as a result of the  
examination; however, the IRS may only make an  
assessment of additional tax on the return of the  
predeceased spouse within the applicable limitations period  
under section 6501.  
Making the Election  
A timely filed and complete Form 706 is required to elect  
portability of the DSUE amount to a surviving spouse. The  
filing requirement applies to all estates of decedents  
choosing to elect portability of the DSUE amount, regardless  
of the size of the estate. A timely filed return is one that is  
filed on or before the due date of the return, including  
extensions. See Rev. Proc. 2022-32 (superseding Rev. Proc.  
2017-34) for the simplified procedures for late elections.  
Special Rule Where Value of Certain Property  
Not Required To Be Reported on Form 706  
The regulations provide that executors of estates who are not  
otherwise required to file Form 706 under section 6018(a) do  
not have to report the value of certain property qualifying for  
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Instructions for Form 706 (Rev. 09-2023)  
   
the marital or charitable deduction. For such property, the  
executor may estimate the value in good faith and with the  
due diligence to be afforded all assets includible in the gross  
estate. The amount reported on Form 706 will correspond to  
a range of dollar values and will be included in the value of  
the gross estate shown on Part 2—Tax Computation, line 1.  
See the instructions for Part 5—Recapitulation, items 10 and  
23, earlier, for more details.  
On line 1, enter the decedent’s applicable exclusion  
amount from Part 2—Tax Computation, line 9d. The  
applicable exclusion amount is the sum of the basic exclusion  
amount for the year of death, any DSUE amount received  
from a predeceased spouse, if applicable, and any Restored  
Exclusion Amount.  
Line 2 is reserved.  
On line 3, enter the value of the cumulative lifetime gifts on  
which gift tax was paid or payable. This amount is figured on  
line 6 of the Line 7 Worksheet, Part B, as the total of Row (r)  
from the Line 7 Worksheet, Part A. Enter the amount as it  
appears on line 6 of the Line 7 Worksheet, Part B.  
Figure the unused exclusion amount on line 9. The DSUE  
amount available to the surviving spouse will be the lesser of  
this amount or the basic exclusion amount shown on Part  
2—Tax Computation, line 9a. Enter the DSUE amount as  
determined on line 10.  
Section D. DSUE Amount Received From Predeceased  
Spouse(s). Complete Section D if the decedent was a  
surviving spouse who received a DSUE amount from one or  
more predeceased spouses.  
Section D requests information on all DSUE amounts  
received from the decedent’s last deceased spouse and any  
previously deceased spouses. Each line in the chart should  
reflect a different predeceased spouse; enter the calendar  
year(s) in column F. In Part 1, provide information on the  
decedent’s last deceased spouse. In Part 2, provide  
information as requested if the decedent had any other  
predeceased spouse whose executor made the portability  
election. Any remaining DSUE amount which was not used  
prior to the death of a subsequent spouse is not considered  
in this calculation and cannot be applied against any taxable  
transfer. In column E, total only the amounts of DSUE  
received and used from spouses who died before the  
decedent’s last deceased spouse. Add this amount to the  
amount from Part 1, column D, if any, to determine the  
decedent’s total DSUE amount.  
Specific Instructions  
Portability Election. If you intend to elect portability of the  
DSUE amount, timely filing a complete Form 706 is all that is  
required. Complete Section B if any assets of the estate are  
being transferred to a qualified domestic trust and complete  
Section C of this Part to figure the DSUE amount that will be  
transferred to the surviving spouse.  
Section A. Opting Out of Portability. If you are filing Form  
706 and do not wish to elect portability, then check the box  
indicated. Do not complete Section B or C.  
Section B. Portability and Qualified Domestic Trusts  
(QDOTs). A QDOT allows the estate of a decedent to  
bequeath property to a surviving spouse who is not a citizen  
of the United States and still receive a marital deduction.  
When property passes to a QDOT, estate tax is imposed  
under section 2056A as distributions are made from the trust.  
When a QDOT is established and there is a DSUE amount,  
the executor of the decedent’s estate will determine a  
preliminary DSUE amount for the purpose of electing  
portability. This amount will decrease as section 2056A  
distributions are made. In estates with a QDOT, the DSUE  
amount generally may not be applied against tax arising from  
lifetime gifts because it will not be available to the surviving  
spouse until it is finally determined, usually upon the death of  
the surviving spouse or when the QDOT is terminated.  
Note. If a surviving spouse who is not a citizen of the United  
States becomes a citizen and the section 2056A tax no  
longer applies to the assets of the QDOT, as of the date the  
surviving spouse becomes a U.S. citizen, the DSUE amount  
is considered final and is available for application by the  
surviving spouse. See Regulations sections 20.2010-2(c)(4),  
20.2010-3(c)(3), and 25.2505-2(d)(3).  
Check the appropriate box in this section and see the  
instructions for Schedule M if more information is needed  
about QDOT.  
Schedule A—Real Estate  
If any assets to which the special rule of Regulations  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
CAUTION  
this schedule, do not enter any value in the last three  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
Section C. DSUE Amount Portable to Decedent's Surviv-  
ing Spouse. Complete Section C only if electing portability  
of the DSUE amount to the surviving spouse.  
-21-  
Instructions for Form 706 (Rev. 09-2023)  
   
Schedule A—Example 1  
In this example, alternate valuation is not adopted; the date of death is January 1, 2023.  
Item  
number  
Description  
Alternate  
valuation  
date  
Alternate  
value  
Value at  
date of  
death  
1
2
House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100 due at  
the end of each quarter, February 1, May 1, August 1, and November 1. Value based on appraisal,  
copy of which is attached  
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$550,000  
Rent due on item 1 for quarter ending November 1, 2022, but not collected at date of death  
Rent accrued on item 1 for November and December 2022  
8,100  
5,400  
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House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800 payable  
monthly. Value based on appraisal, copy of which is attached  
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375,000  
1,800  
Rent due on item 2 for December 2022, but not collected at death  
Schedule A—Example 2  
In this example, alternate valuation is adopted; the date of death is January 1, 2023.  
Item  
number  
Description  
Alternate  
valuation  
date  
Alternate  
value  
Value at  
date of  
death  
1
2
House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100 due at  
the end of each quarter, February 1, May 1, August 1, and November 1. Value based on appraisal,  
copy of which is attached. Not disposed of within 6 months of date of death  
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7/1/23  
$535,000  
$550,000  
Rent due on item 1 for quarter ending November 1, 2022, but not collected until February 1,  
2023  
Rent accrued on item 1 for November and December 2022, collected on February 1, 2023  
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2/1/23  
2/1/23  
8,100  
5,400  
8,100  
5,400  
House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800 payable  
monthly. Value based on appraisal, copy of which is attached. Property exchanged for farm on May  
1, 2023  
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5/1/23  
2/1/23  
369,000  
1,800  
375,000  
1,800  
Rent due on item 2 for December 2022, but not collected until February 1, 2023  
If the total gross estate contains any real estate, complete  
and not the equity in the value column. Deduct the unpaid  
part of the purchase price on Schedule K.  
Schedule A and file it with the return. On Schedule A, list real  
estate the decedent owned or had contracted to purchase.  
Number each parcel in the left-hand column.  
Report the value of real estate without reducing it for  
homestead or other exemption, or the value of dower,  
curtesy, or a statutory estate created instead of dower or  
curtesy.  
Describe the real estate in enough detail so that the IRS  
can easily locate it for inspection and valuation. For each  
parcel of real estate, report the area and, if the parcel is  
improved, describe the improvements. For city or town  
property, report the street and number, ward, subdivision,  
block and lot, etc. For rural property, report the township,  
range, landmarks, etc.  
Explain how the reported values were determined and  
attach copies of any appraisals.  
Schedule A-1—Section 2032A  
Valuation  
If any item of real estate is subject to a mortgage for which  
the decedent's estate is liable, that is, if the indebtedness  
may be charged against other property of the estate that is  
not subject to that mortgage, or if the decedent was  
personally liable for that mortgage, you must report the full  
value of the property in the value column. Enter the amount of  
the mortgage under “Description” on this schedule. The  
unpaid amount of the mortgage may be deducted on  
Schedule K.  
The election to value certain farm and closely held business  
property at its special-use value is made by checking “Yes”  
on Form 706, Part 3—Elections by the Executor, line 2.  
Schedule A-1 is used to report the additional information that  
must be submitted to support this election. In order to make a  
valid election, you must complete Schedule A-1 and attach  
all of the required statements and appraisals.  
For definitions and additional information concerning  
special-use valuation, see section 2032A and the related  
regulations.  
If the decedent’s estate is not liable for the amount of the  
mortgage, report only the value of the equity of redemption  
(or value of the property less the indebtedness) in the value  
column as part of the gross estate. Do not enter any amount  
less than zero. Do not deduct the amount of indebtedness on  
Schedule K.  
Part 1. Type of Election  
Estate and GST tax elections. If you elect special-use  
valuation for the estate tax, you must also elect special-use  
valuation for the GST tax and vice versa.  
Also list on Schedule A real property the decedent  
contracted to purchase. Report the full value of the property  
-22-  
Instructions for Form 706 (Rev. 09-2023)  
 
Completing the fair market value worksheets.  
Schedule R, Parts 2 and 3, lines 2 and 3, fixed taxes and  
other charges. If valuing the interests at FMV (instead of  
special-use value) causes any of these taxes and  
charges to increase, enter the increased amount (only)  
on these lines and attach an explanation of the increase.  
Otherwise, enter -0-.  
Protective election. To make the protective election  
described in the separate instructions for Part 3—Elections  
by the Executor, line 2, you must complete the following.  
Check the box in Part 1. Type of Election.  
Enter the decedent's name and SSN in the spaces  
provided at the top of Schedule A-1.  
Complete Part 2. Notice of Election, line 1, and column A  
for lines 3 and 4.  
Schedule R, Parts 2 and 3, line 6—GST exemption  
allocation. If you completed Schedule R, Part 1, line 10,  
enter on line 6 the amount shown for the skip person on  
the line 10 special-use allocation schedule you attached  
to Schedule R. If you did not complete Schedule R, Part  
1, line 10, enter -0- on line 6.  
For purposes of the protective election, list on line 3 all of  
the real property that passes to the qualified heirs even  
though some of the property will be shown on line 2 when the  
additional notice of election is subsequently filed.  
You don’t need to complete columns B through D of lines 3  
Total GST tax savings. For each skip person, subtract the  
tax amount on line 10, Part 2, of the special-use value  
worksheet from the tax amount on line 10, Part 2, of the fair  
market value worksheet. This difference is the skip person's  
total GST tax savings.  
and 4 or any other line entries on Schedule A-1.  
Completing Schedule A-1 as described above constitutes  
a Notice of Protective Election as described in Regulations  
section 20.2032A-8(b).  
Part 2. Notice of Election  
Part 3. Agreement to Special Valuation Under  
Section 2032A  
The agreement to special valuation is required under  
sections 2032A(a)(1)(B) and (d)(2) and must be signed by all  
parties who have any interest in the property being valued  
based on its qualified use as of the date of the decedent's  
death.  
Line 10. Because the special-use valuation election creates  
a potential tax liability for the recapture tax of section  
2032A(c), you must list each person who receives an interest  
in the specially valued property on Schedule A-1. If there are  
more than eight persons who receive interests, use an  
additional sheet that follows the format of line 10. In the  
columns “Fair market value” and “Special-use value,enter  
the total respective values of all the specially valued property  
interests received by each person.  
An interest in property is an interest that, as of the date of  
the decedent's death, can be asserted under applicable law  
so as to affect the disposition of the specially valued property  
by the estate. Any person who at the decedent's death has  
any such interest in the property, whether present, future,  
vested, or contingent, must enter into the agreement.  
Included are the following.  
GST Tax Savings  
To figure the additional GST tax due upon disposition (or  
cessation of qualified use) of the property, each “skip person”  
(as defined in the instructions for Schedule R) who receives  
an interest in the specially valued property must know the  
total GST tax savings all interests in specially valued property  
received. The GST tax savings is the difference between the  
total GST tax that was imposed on all interests in specially  
valued property received by the skip person valued at their  
special-use value and the total GST tax that would have been  
imposed on the same interests received by the skip person  
had they been valued at their FMV.  
Owners of remainder and executory interests;  
Holders of general or special powers of appointment;  
Beneficiaries of a gift over in default of exercise of any  
such power;  
Joint tenants and holders of similar undivided interests  
when the decedent held only a joint or undivided interest  
in the property or when only an undivided interest is  
specially valued; and  
Trustees of trusts and representatives of other entities  
holding title to or any interests in the property.  
Because the GST tax depends on the executor's  
allocation of the GST exemption and the grandchild  
exclusion, the skip person who receives the interests is  
unable to figure this GST tax savings. Therefore, for each  
skip person who receives an interest in specially valued  
property, you must attach a calculation of the total GST tax  
savings attributable to that person's interests in specially  
valued property.  
An heir who has the power under local law to challenge a will  
and thereby affect disposition of the property is not, however,  
considered to be a person with an interest in property under  
section 2032A solely by reason of that right. Likewise,  
creditors of an estate are not such persons solely by reason  
of their status as creditors.  
If persons required to enter into the agreement desire that  
an agent act for them or cannot legally bind themselves due  
to infancy or other incompetency, or due to death before the  
election under section 2032A is timely exercised, a  
representative authorized by local law to bind persons in  
agreements of this nature may sign the agreement on the  
person’s behalf.  
How to figure the GST tax savings. Before figuring each  
skip person's GST tax savings, complete Schedules R and  
R-1 for the entire estate (using the special-use values).  
For each skip person, complete two Schedules R (Parts 2  
and 3 only) as worksheets, one showing the interests in  
specially valued property received by the skip person at their  
special-use value and one showing the same interests at  
their FMV.  
If the skip person received interests in specially valued  
property that were shown on Schedule R-1, show these  
interests on the Schedule R, Parts 2 and 3 worksheets, as  
appropriate. Do not use Schedule R-1 as a worksheet.  
Completing the special-use value worksheets. On  
Schedule R, Parts 2 and 3, lines 2 through 4 and 6, enter -0-.  
The IRS will contact the agent designated in the  
agreement on all matters relating to continued qualification  
under section 2032A of the specially valued real property and  
on all matters relating to the special lien arising under section  
6324B. It is the duty of the agent as attorney-in-fact for the  
parties with interests in the specially valued property to  
furnish the IRS with any requested information and to notify  
-23-  
Instructions for Form 706 (Rev. 09-2023)  
 
the IRS of any disposition or cessation of qualified use of any  
part of the property.  
Does the notice of election include a statement that  
the decedent and/or a member of the decedent’s  
family has owned all of the specially valued property  
for at least 5 years of the 8 years immediately  
preceding the date of the decedent's death?  
Checklist for Section 2032A Election  
When making the special-use valuation election on  
Schedule A-1, please use this checklist to ensure  
!
CAUTION  
that you are providing everything necessary to make  
Does the notice of election include a statement as to  
whether there were any periods during the 8-year  
period preceding the decedent's date of death  
during which the decedent or a member of the  
decedent’s family did not (a) own the property to be  
specially valued, (b) use it in a qualified use, or (c)  
materially participate in the operation of the farm or  
other business? (See section 2032A(e)(6).)  
a valid election.  
To have a valid special-use valuation election under  
section 2032A, you must file, in addition to the federal estate  
tax return, (a) a notice of election (Schedule A-1, Part 2), and  
(b) a fully executed agreement (Schedule A-1, Part 3). You  
must include certain information in the notice of election. To  
ensure that the notice of election includes all of the  
information required for a valid election, use the following  
checklist. The checklist is for your use only. Do not file it with  
the return.  
Does the notice of election include, for each item of  
specially valued property, the name of every person  
who has an interest in that item of specially valued  
property and the following information about each  
such person: (a) the person's address, (b) the  
person's TIN, (c) the person's relationship to the  
decedent, and (d) the value of the property interest  
passing to that person based on both FMV and  
qualified use?  
Does the notice of election include the decedent's  
name and SSN as they appear on the estate tax  
return?  
Does the notice of election include the relevant  
qualified use of the property to be specially valued?  
Does the notice of election describe the items of  
real property shown on the estate tax return that are  
to be specially valued and identify the property by  
the Form 706 schedule and item number?  
Does the notice of election include affidavits  
describing the activities constituting material  
participation and the identities of the material  
participants?  
Does the notice of election include the FMV of the  
real property to be specially valued and also include  
its value based on the qualified use (determined  
without the adjustments provided in section  
2032A(b)(3)(B))?  
Does the notice of election include a legal  
description of each item of specially valued  
property? (Note. The legal description must be the  
complete legal description of the property. An  
abbreviated description is not sufficient.)  
Does the notice of election include the adjusted  
value (as defined in section 2032A(b)(3)(B)) of (a)  
all real property that both passes from the decedent  
and is used in a qualified use, without regard to  
whether it is to be specially valued; and (b) all real  
property to be specially valued?  
(In the case of an election made for qualified woodlands,  
the information included in the notice of election must  
include the reason for entitlement to the woodlands  
election.)  
Any election made under section 2032A will not be valid  
unless a properly executed agreement (Schedule A-1, Part 3)  
is filed with the estate tax return. To ensure that the  
agreement satisfies the requirements for a valid election, use  
the following checklist. The checklist is for your use only. Do  
not file it with the return.  
Does the notice of election include (a) the items of  
personal property shown on the estate tax return  
that pass from the decedent to a qualified heir, and  
that are used in qualified use; and (b) the total value  
of such personal property adjusted under section  
2032A(b)(3)(B)?  
Has the agreement been signed by each qualified  
heir having an interest in the property being  
specially valued?  
Does the notice of election include the adjusted  
value of the gross estate? (See section 2032A(b)(3)  
(A).)  
Has every qualified heir expressed consent to  
personal liability under section 2032A(c) in the  
event of an early disposition or early cessation of  
qualified use?  
Does the notice of election include the method used  
to determine the special-use value?  
Does the notice of election include copies of written  
appraisals of the FMV of the real property?  
-24-  
Instructions for Form 706 (Rev. 09-2023)  
Issue;  
Is the agreement that is actually signed by the  
qualified heirs in a form that is binding on all of the  
qualified heirs having an interest in the specially  
valued property?  
Par value where needed for identification;  
Price per share;  
Exact name of corporation;  
Principal exchange upon which sold, if listed on an  
exchange; and  
Does the agreement designate an agent to act for  
the parties to the agreement in all dealings with the  
IRS on matters arising under section 2032A?  
Nine-digit CUSIP number (defined later).  
Bonds. For bonds, indicate:  
Quantity and denomination;  
Name of obligor;  
Has the agreement been signed by the designated  
agent and does it give the address of the agent?  
Date of maturity;  
Interest rate;  
Interest due date;  
Principal exchange, if listed on an exchange; and  
Nine-digit CUSIP number.  
Schedule B—Stocks and Bonds  
If the stock or bond is unlisted, show the company's  
principal business office.  
If any assets to which the special rule of Regulations  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
If the gross estate includes any interest in a trust,  
partnership, or closely held entity, provide the EIN of the  
entity in the description column on Schedules B, E, F, G, M,  
and O. You must also provide the EIN of an estate (if any) in  
the description column on the above-noted schedules, where  
applicable.  
CUSIP number. The CUSIP (Committee on Uniform  
Security Identification Procedures) number is a nine-digit  
number that is assigned to all stocks and bonds traded on  
major exchanges and many unlisted securities. Usually, the  
CUSIP number is printed on the face of the stock certificate.  
If you do not have a stock certificate, the CUSIP may be  
found on the broker's or custodian's statement or by  
contacting the company's transfer agent.  
CAUTION  
this schedule, do not enter any value in the last three  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
Before completing Schedule B, see the examples  
illustrating the alternate valuation dates being  
adopted and not being adopted, later.  
TIP  
If the total gross estate contains any stocks or bonds, you  
must complete Schedule B and file it with the return.  
On Schedule B, list the stocks and bonds included in the  
decedent's gross estate. Number each item in the left-hand  
column.  
Valuation  
Note. Unless specifically exempted by an estate tax  
provision of the Code, bonds that are exempt from federal  
income tax are not exempt from estate tax. You should list  
these bonds on Schedule B.  
List the FMV of the stocks or bonds. The FMV of a stock or  
bond (whether listed or unlisted) is the mean between the  
highest and lowest selling prices quoted on the valuation  
date. If only the closing selling prices are available, then the  
FMV is the mean between the quoted closing selling price on  
the valuation date and on the trading day before the valuation  
date.  
Public housing bonds includible in the gross estate must  
be included at their full value.  
If you paid any estate, inheritance, legacy, or succession  
tax to a foreign country on any stocks or bonds included in  
this schedule, group those stocks and bonds together and  
label them “Subjected to Foreign Death Taxes.”  
If there were no sales on the valuation date, figure the  
FMV as follows.  
1. Find the mean between the highest and lowest selling  
prices on the nearest trading date before and the nearest  
trading date after the valuation date. Both trading dates  
must be reasonably close to the valuation date.  
List interest and dividends on each stock or bond on a  
separate line.  
Indicate as a separate item dividends that have not been  
collected at death and are payable to the decedent or the  
estate because the decedent was a stockholder of record on  
the date of death. However, if the stock is being traded on an  
exchange and is selling ex-dividend on the date of the  
decedent's death, do not include the amount of the dividend  
as a separate item. Instead, add it to the ex-dividend  
quotation in determining the FMV of the stock on the date of  
the decedent's death. Dividends declared on shares of stock  
before the death of the decedent but payable to stockholders  
of record on a date after the decedent's death are not  
includible in the gross estate for federal estate tax purposes  
and should not be listed here.  
2. Prorate the difference between the mean prices to the  
valuation date.  
3. Add or subtract (whichever applies) the prorated part of  
the difference to or from the mean price figured for the  
nearest trading date before the valuation date.  
If no actual sales were made reasonably close to the  
valuation date, make the same computation using the mean  
between the bona fide bid and asked prices instead of sales  
prices. If actual sales prices or bona fide bid and asked  
prices are available within a reasonable period of time before  
the valuation date but not after the valuation date, or vice  
versa, use the mean between the highest and lowest sales  
prices or bid and asked prices as the FMV.  
Description  
Stocks. For stocks, indicate:  
Number of shares;  
For example, assume that sales of stock nearest the  
valuation date (June 15) occurred 2 trading days before  
Whether common or preferred;  
-25-  
Instructions for Form 706 (Rev. 09-2023)  
 
Schedule B Examples  
Example showing use of Schedule B where the alternate valuation is not adopted; date of death, January 1, 2023.  
Item  
number  
Description, including face amount of bonds or number of shares and par value  
where needed for identification. Give CUSIP number. If trust, partnership, or  
closely held entity, give EIN.  
Unit value  
Alternate  
valuation  
date  
Alternate  
value  
Value at  
date of  
death  
CUSIP number or  
EIN, where  
applicable  
1
2
$60,000—Arkansas Railroad Co. first mortgage 4%, 20-year  
bonds, due 2024. Interest payable quarterly on Feb. 1, May 1,  
Aug. 1, and Nov. 1; N.Y. Exchange  
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XXXXXXXXX  
XXXXXXXXX  
100  
- - - - - - - $- - - - - - -  
$ 60,000  
600  
Interest coupons attached to bonds, item 1, due and payable on  
Nov. 1, 2022, but not cashed at date of death  
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- - - - - - -  
- - - - - - -  
- - - - - - -  
Interest accrued on item 1, from Nov. 1, 2022, to Jan. 1,  
2023  
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- - - - - - -  
110  
- - - - - - -  
- - - - - - -  
- - - - - - -  
- - - - - - -  
400  
500 shares Public Service Corp., common; N.Y. Exchange  
55,000  
Dividend on item 2 of $2 per share declared Dec. 10, 2022,  
payable on Jan. 9, 2023, to holders of record on Dec. 30,  
2022  
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- - - - - - -  
- - - - - - -  
- - - - - - -  
1,000  
Example showing use of Schedule B where the alternate valuation is adopted; date of death, January 1, 2023.  
Item  
number  
Description, including face amount of bonds or number of shares and par value  
where needed for identification. Give CUSIP number. If trust, partnership, or  
closely held entity, give EIN.  
Unit value  
Alternate  
valuation  
date  
Alternate  
value  
Value at  
date of  
death  
CUSIP number or  
EIN, where  
applicable  
1
$60,000—Arkansas Railroad Co. first mortgage 4%, 20-year  
bonds, due 2024. Interest payable quarterly on Feb. 1, May 1,  
Aug. 1, and Nov. 1; N.Y. Exchange  
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.
XXXXXXXXX  
100  
- - - - - -  
4/1/23  
5/1/23  
$- - - - - -  
29,700  
29,400  
$ 60,000  
- - - - - -  
- - - - - -  
$30,000 of item 1 distributed to legatees on Apr. 1, 2023  
$30,000 of item 1 sold by executor on May 1, 2023  
99  
98  
.
.
.
Interest coupons attached to bonds, item 1, due and payable on  
Nov. 1, 2022, but not cashed at date of death. Cashed by executor  
on Feb. 2, 2023  
.
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.
.
.
- - - - - -  
2/2/23  
600  
600  
Interest accrued on item 1, from Nov. 1, 2022, to Jan. 1, 2023.  
Cashed by executor on Feb. 2, 2023  
500 shares Public Service Corp., common; N.Y. Exchange  
Not disposed of within 6 months following death  
.
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.
- - - - - -  
110  
2/2/23  
- - - - - -  
7/1/23  
400  
- - - - - -  
45,000  
400  
55,000  
- - - - - -  
2
XXXXXXXXX  
.
.
.
.
.
.
90  
Dividend on item 2 of $2 per share declared Dec. 10, 2022, paid  
on Jan. 9, 2023, to holders of record on Dec. 30, 2022  
.
.
.
.
.
- - - - - -  
1/9/23  
1,000  
1,000  
(June 13) and 3 trading days after (June 18). On those days,  
the mean sale prices per share were $10 and $15,  
respectively. Therefore, the price of $12 is considered the  
FMV of a share of stock on the valuation date. If, however, on  
June 13 and 18, the mean sale prices per share were $15  
and $10, respectively, the FMV of a share of stock on the  
valuation date is $13.  
dividends paid for each of the 5 years immediately before the  
valuation date.  
Securities reported as of no value, of nominal value, or  
obsolete should be listed last. Include the address of the  
company and the state and date of incorporation. Attach  
copies of correspondence or statements used to determine  
the “no value.”  
If the security was listed on more than one stock  
exchange, use either the records of the exchange where the  
security is principally traded or the composite listing of  
combined exchanges, if available, in a publication of general  
circulation. In valuing listed stocks and bonds, you should  
carefully check accurate records to obtain values for the  
applicable valuation date.  
If only closing prices for bonds are available, see  
Regulations section 20.2031-2(b).  
Apply the rules in the section 2031 regulations to  
determine the value of inactive stock and stock in close  
corporations. Attach to Schedule B complete financial and  
other data used to determine value, including balance sheets  
(particularly the one nearest to the valuation date) and  
statements of the net earnings or operating results and  
If you get quotations from brokers, or evidence of the sale  
of securities from the officers of the issuing companies,  
-26-  
Instructions for Form 706 (Rev. 09-2023)  
attach to the schedule copies of the letters furnishing these  
quotations or evidence of sale.  
Interest rate.  
Cash in possession. For cash on hand, list such cash  
separately from bank deposits.  
Schedule C—Mortgages, Notes, and  
Cash  
Cash in financial organizations. For cash in banks,  
savings and loan associations, and other types of financial  
organizations, list:  
If any assets to which the special rule of Regulations  
Name and address of each financial organization;  
Amount in each account;  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
CAUTION  
this schedule, do not enter any value in the last three  
Serial or account number;  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
Nature of account—checking, savings, time deposit, etc.;  
and  
Unpaid interest accrued from date of last interest  
payment to the date of death.  
Complete Schedule C and file it with your return if the total  
gross estate contains any:  
Note. If you obtain statements from the financial  
Mortgages,  
Notes, or  
Cash.  
organizations, keep them for IRS inspection.  
Schedule D—Insurance on the  
Decedent's Life  
List on Schedule C:  
Mortgages and notes payable to the decedent at the  
time of death, and  
If any assets to which the special rule of Regulations  
Cash the decedent had at the date of death.  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
CAUTION  
this schedule, do not enter any value in the last three  
Note. Do not list mortgages and notes payable by the  
decedent on Schedule C. (If these are deductible, list them  
on Schedule K.)  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
Schedule C reporting order. List the items on Schedule C  
in the following order.  
If you are required to file Form 706 and there was any  
insurance on the decedent's life, whether or not included in  
the gross estate, you must complete Schedule D and file it  
with the return.  
1. Mortgages.  
2. Promissory notes.  
Insurance you must include on Schedule D. Under  
3. Contracts by decedent to sell land.  
4. Cash in possession.  
section 2042, you must include in the gross estate:  
Insurance on the decedent's life receivable by or for the  
benefit of the estate; and  
5. Cash in banks, savings and loan associations, and other  
types of financial organizations.  
Insurance on the decedent's life receivable by  
beneficiaries other than the estate, as described below.  
Description  
Mortgages. For mortgages, list:  
The term “insurance” refers to life insurance of every  
description, including death benefits paid by fraternal  
beneficiary societies operating under the lodge system, and  
death benefits paid under no-fault automobile insurance  
policies if the no-fault insurer was unconditionally bound to  
pay the benefit in the event of the insured's death.  
Face value,  
Unpaid balance,  
Date of mortgage,  
Name of maker,  
Property mortgaged,  
Date of maturity,  
Interest rate, and  
Interest date.  
Insurance in favor of the estate. Include on Schedule D  
the full amount of the proceeds of insurance on the life of the  
decedent receivable by the executor or otherwise payable to  
or for the benefit of the estate. Insurance in favor of the estate  
includes insurance used to pay the estate tax, and any other  
taxes, debts, or charges that are enforceable against the  
estate. The manner in which the policy is drawn is immaterial  
as long as there is an obligation, legally binding on the  
beneficiary, to use the proceeds to pay taxes, debts, or  
charges. You must include the full amount even though the  
premiums or other consideration may have been paid by a  
person other than the decedent.  
Mortgage description example. “Bond and mortgage of  
$50,000, unpaid balance: $17,000; dated: January 1, 1992;  
J. Doe to R. Roe; premises: 22 Clinton Street, Newark, NJ;  
due: January 1, 2023; interest payable at 10% a  
year—January 1 and July 1.”  
Promissory notes. For promissory notes, list in the same  
way as mortgages.  
Contracts by the decedent to sell land. For contracts by  
Insurance receivable by beneficiaries other than the es-  
tate. Include on Schedule D the proceeds of all insurance on  
the life of the decedent not receivable by, or for the benefit of,  
the decedent's estate if the decedent possessed at death  
any of the following incidents of ownership, exercisable either  
alone or in conjunction with any person or entity.  
the decedent to sell land, list:  
Name of purchaser,  
Contract date,  
Property description,  
Sale price,  
Initial payment,  
Incidents of ownership in a policy include the following.  
Amounts of installment payment,  
Unpaid balance of principal, and  
The right of the insured or estate to its economic benefits.  
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Instructions for Form 706 (Rev. 09-2023)  
   
The power to change the beneficiary.  
Do not list on this schedule property that the decedent  
held as a tenant in common, but report the value of the  
interest on Schedule A if real estate, or on the appropriate  
schedule if personal property. Similarly, community property  
held by the decedent and spouse should be reported on the  
appropriate Schedules A through I. The decedent's interest in  
a partnership should not be entered on this schedule unless  
the partnership interest itself is jointly owned. Solely owned  
partnership interests should be reported on Schedule F.  
The power to surrender or cancel the policy.  
The power to assign the policy or to revoke an  
assignment.  
The power to pledge the policy for a loan.  
The power to obtain from the insurer a loan against the  
surrender value of the policy.  
A reversionary interest if the value of the reversionary  
interest was more than 5% of the value of the policy  
immediately before the decedent died. (An interest in an  
insurance policy is considered a reversionary interest if,  
for example, the proceeds become payable to the  
insured's estate or payable as the insured directs if the  
beneficiary dies before the insured.)  
Part 1. Qualified joint interests held by decedent and  
spouse. Under section 2040(b)(2), a joint interest is a  
qualified joint interest if the decedent and the surviving  
spouse held the interest as:  
Tenants by the entirety, or  
Life insurance not includible in the gross estate under  
Joint tenants with right of survivorship if the decedent  
and the decedent's spouse are the only joint tenants.  
section 2042 may be includible under some other section of  
the Code. For example, a life insurance policy could be  
transferred by the decedent in such a way that it would be  
includible in the gross estate under section 2036, 2037, or  
2038. See the instructions for Schedule G for a description of  
these sections.  
Interests that meet either of the two requirements above  
should be entered in Part 1. Joint interests that do not meet  
either of the two requirements above should be entered in  
Part 2.  
Under “Description,describe the property as required in  
the instructions for Schedules A, B, C, and F for the type of  
property involved. For example, jointly held stocks and bonds  
should be described using the rules given in the instructions  
for Schedule B.  
Completing the Schedule  
You must list every insurance policy on the life of the  
decedent, whether or not it is included in the gross estate.  
Under “Description,list:  
Under “Alternate value” and “Value at date of death,enter  
The name of the insurance company, and  
The number of the policy.  
the full value of the property.  
Note. You cannot claim the special treatment under section  
2040(b) for property held jointly by a decedent and a  
surviving spouse who is not a U.S. citizen. Report these joint  
interests on Part 2 of Schedule E, not Part 1.  
For every life insurance policy listed on the schedule,  
request a statement on Form 712 from the company that  
issued the policy. Attach the Form 712 to Schedule D.  
Note. If the insurance company that issued the policy will not  
provide Form 712, you should attach evidence that verifies  
the amount includible on Schedule D, including but not  
limited to an attachment, rider, assignment, copy of insurance  
proceeds check, and other relevant material.  
Part 2. All other joint interests. All joint interests that were  
not entered in Part 1 must be entered in Part 2.  
For each item of property, enter the appropriate letter A, B,  
C, etc., from line 2a to indicate the name and address of the  
surviving co-tenant.  
If the policy proceeds are paid in one sum, enter the net  
proceeds received (from Form 712, line 24) in the value (and  
alternate value) columns of Schedule D. If the policy  
proceeds are not paid in one sum, enter the value of the  
proceeds as of the date of the decedent's death (from Form  
712, line 25).  
Under “Description,describe the property as required in  
the instructions for Schedules A, B, C, and F for the type of  
property involved.  
In the “Percentage includible” column, enter the  
percentage of the total value of the property included in the  
gross estate.  
If part or all of the policy proceeds are not included in the  
gross estate, explain why they were not included.  
Generally, you must include the full value of the jointly  
owned property in the gross estate. However, the full value  
should not be included if you can show that a part of the  
property originally belonged to the other tenant(s) and was  
never received or acquired by the other tenant(s) from the  
decedent for less than adequate and full consideration in  
money or money's worth. Full value of jointly owned property  
also does not have to be included in the gross estate if you  
can show that any part of the property was acquired with  
consideration originally belonging to the surviving joint  
tenant(s). In this case, you may exclude from the value of the  
property an amount proportionate to the consideration  
furnished by the other tenant(s). Relinquishing or promising  
to relinquish dower, curtesy, or statutory estate created  
instead of dower or curtesy, or other marital rights in the  
decedent's property or estate is not consideration in money  
or money's worth. See the Schedule A instructions for the  
value to show for real property that is subject to a mortgage.  
Schedule E—Jointly Owned Property  
If any assets to which the special rule of Regulations  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
CAUTION  
this schedule, do not enter any value in the last three  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
If you are required to file Form 706, complete Schedule E  
and file it with the return if the decedent owned any joint  
property at the time of death, whether or not the decedent's  
interest is includible in the gross estate.  
Enter on this schedule all property of whatever kind or  
character, whether real estate, personal property, or bank  
accounts, in which the decedent held at the time of death an  
interest either as a joint tenant with right to survivorship or as  
a tenant by the entirety.  
If the property was acquired by the decedent and another  
person or persons by gift, bequest, devise, or inheritance as  
-28-  
Instructions for Form 706 (Rev. 09-2023)  
 
joint tenants, and their interests are not otherwise specified  
by law, include only that part of the value of the property that  
is figured by dividing the full value of the property by the  
number of joint tenants.  
If you believe that less than the full value of the entire  
property is includible in the gross estate for tax purposes, you  
must establish the right to include the smaller value by  
attaching proof of the extent, origin, and nature of the  
decedent's interest and the interest(s) of the decedent's  
co-tenant(s).  
policy exceeds its replacement cost), the true economic  
value of the policy will be greater than the amount shown on  
Form 712, line 59. In these situations, report the full  
economic value of the policy on Schedule F. See Rev. Rul.  
78-137, 1978-1 C.B. 280, for details.  
Interests. If the decedent owned any interest in a  
partnership or unincorporated business, attach a statement  
of assets and liabilities for the valuation date and for the 5  
years before the valuation date. Also, attach statements of  
the net earnings for the same 5 years. Be sure to include the  
EIN of the entity. You must account for goodwill in the  
valuation. In general, furnish the same information and follow  
the methods used to value close corporations. See the  
instructions for Schedule B.  
In the “Includible alternate value” and “Includible value at  
date of death” columns, enter only the values that you believe  
are includible in the gross estate.  
All partnership interests should be reported on Schedule F  
unless the partnership interest is jointly owned. Jointly owned  
partnership interests should be reported on Schedule E.  
Schedule F—Other Miscellaneous  
Property  
If real estate is owned by a sole proprietorship, it should be  
reported on Schedule F and not on Schedule A. Describe the  
real estate with the same detail required for Schedule A.  
Valuation discounts. If you answered “Yes” to Part  
4—General Information, line 11b, for any interest in a  
partnership, an unincorporated business, an LLC, or stock in  
a closely held corporation, attach a statement that lists the  
item number from Schedule F and identifies the total effective  
discount taken (that is, XX.XX%) on such interest.  
If any assets to which the special rule of Regulations  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
CAUTION  
this schedule, do not enter any value in the last three  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
You must complete Schedule F and file it with the re-  
turn. On Schedule F, list all items that must be included in  
the gross estate that are not reported on any other schedule,  
including:  
Example of effective discount:  
Debts due the decedent (other than notes and  
mortgages included on Schedule C);  
Interests in business;  
a
b
c
Pro-rata value of LLC (before any discounts)  
Minus: 10% discounts for lack of control  
$100.00  
(10.00)  
Any interest in an Archer medical savings account (MSA)  
or health savings account (HSA), unless such interest  
passes to the surviving spouse;  
Marketable minority interest value (as if freely traded  
minority interest value)  
$90.00  
(13.50)  
$76.50  
Insurance on the life of another (obtain and attach Form  
712, for each policy) (see Note below);  
Section 2044 property (see Decedent Who Was a  
Surviving Spouse, later);  
d
e
Minus: 15% discount for lack of marketability  
Nonmarketable minority interest value  
Claims (including the value of the decedent's interest in a  
claim for refund of income taxes or the amount of the  
refund actually received);  
Calculation of effective discount:  
(a minus e) divided by a = effective discount  
Rights;  
($100.00 - $76.50) ÷ $100.00 = 23.50%  
Digital assets are any digital representations of value that  
are recorded on a cryptographically secured distributed  
ledger or any similar technology. For example, digital  
assets include non-fungible tokens (NFTs) and virtual  
currencies, such as cryptocurrencies and stablecoins. If  
a particular asset has the characteristics of a digital  
asset, it will be treated as a digital asset for federal  
transfer tax purposes;  
Note. The amount of discounts are based on the factors  
pertaining to a specific interest and those discounts shown in  
the example are for demonstration purposes only.  
If you answered “Yes” to Part 4—General Information,  
line 11b, for any transfer(s) described in (1) through (5) in the  
Schedule G instructions (and made by the decedent), attach  
a statement to Schedule G which lists the item number  
from that schedule and identifies the total effective discount  
taken (that is, XX.XX%) on such transfer(s).  
Line 1. If the decedent owned at the date of death works of  
art or items with collectible value (for example, jewelry, furs,  
silverware, books, statuary, vases, oriental rugs, coin or  
stamp collections), check the “Yes” box on line 1 and provide  
full details. If any item or collection of similar items is valued  
at more than $3,000, attach an appraisal by an expert under  
oath and the required statement regarding the appraiser's  
qualifications (see Regulations section 20.2031-6(b)).  
Royalties;  
Leaseholds;  
Judgments;  
Reversionary or remainder interests;  
Shares in trust funds (attach a copy of the trust  
instrument);  
Household goods and personal effects, including  
wearing apparel;  
Farm products and growing crops;  
Livestock;  
Farm machinery; and  
Automobiles.  
Note (for single premium or paid-up policies). In certain  
situations (for example, where the surrender value of the  
-29-  
Instructions for Form 706 (Rev. 09-2023)  
 
For example, if the decedent died on July 10, 2023,  
you should examine gift tax returns for 2023, 2022, 2021,  
and 2020. However, the gift taxes on the 2020 return that  
are attributable to gifts made on or before July 10, 2020,  
are not included in the gross estate.  
Explain how you figured the includible gift taxes if the  
entire gift taxes shown on any Form 709 filed for gifts  
made within 3 years of death are not included in the  
gross estate. Also attach copies of any relevant gift tax  
returns filed by the decedent's spouse, with "Exhibit to  
Estate Tax Return" entered across the top of the first  
page of each, for gifts made within 3 years of death.  
Decedent Who Was a Surviving Spouse  
If the decedent was a surviving spouse, the decedent may  
have received qualified terminable interest property (QTIP)  
from the predeceased spouse for which the marital deduction  
was elected either on the predeceased spouse's estate tax  
return or on a gift tax return, Form 709. The election is  
available for transfers made and decedents dying after  
December 31, 1981. List such property on Schedule F.  
If this election was made and the surviving spouse  
retained interest in the QTIP property at death, the full value  
of the QTIP property is includible in the estate, even though  
the qualifying income interest terminated at death. It is valued  
as of the date of the surviving spouse's death, or alternate  
valuation date, if applicable. Do not reduce the value by any  
annual exclusion that may have applied to the transfer  
creating the interest.  
The value of such property included in the surviving  
spouse's gross estate is treated as passing from the  
surviving spouse. It therefore qualifies for the charitable and  
marital deductions on the surviving spouse's estate tax return  
if it meets the other requirements for those deductions.  
2. Other transfers within 3 years of death (section  
2035(a)). These transfers include only the following.  
Any transfer by the decedent with respect to a life  
insurance policy within 3 years of death.  
Any transfer within 3 years of death of a retained  
section 2036 life estate, section 2037 reversionary  
interest, or section 2038 power to revoke, etc., if the  
property subject to the life estate, interest, or power  
would have been included in the gross estate had  
the decedent continued to possess the life estate,  
interest, or power until death.  
For additional details, see Regulations section 20.2044-1.  
These transfers are reported on Schedule G,  
regardless of whether a gift tax return was required to be  
filed for them when they were made. However, the  
amount includible and the information required to be  
shown for the transfers are determined:  
Schedule G—Transfers During  
Decedent's Life  
If any assets to which the special rule of Regulations  
For insurance on the life of the decedent using the  
instructions for Schedule D (attach Form 712);  
For insurance on the life of another using the  
instructions for Schedule F (attach Form 712); and  
For sections 2036, 2037, and 2038 transfers, using  
paragraphs (3), (4), and (5) of these instructions.  
section 20.2010-2(a)(7)(ii) applies are reported on  
!
CAUTION  
this schedule, do not enter any value in the last three  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
Complete Schedule G and file it with the return if the  
decedent made any of the transfers described in (1) through  
(5) later, or if you answered “Yes” to question 12 or 13a of  
Part 4—General Information.  
3. Transfers with retained life estate (section 2036).  
These are transfers by the decedent in which the  
decedent retained an interest in the transferred property.  
The transfer can be in trust or otherwise, but excludes  
bona fide sales for adequate and full consideration.  
Report the following types of transfers on this schedule.  
Interests or rights. Section 2036 applies to the  
IF. . .  
AND . . .  
THEN . . .  
following retained interests or rights.  
The right to income from the transferred property.  
The right to the possession or enjoyment of the  
property.  
the decedent made a  
transfer from a trust  
at the time of the  
for purposes of  
transfer, the transfer  
was from a portion of  
the trust that was  
sections 2035 and  
2038, treat the transfer  
as made directly by the  
decedent. Any such  
transfer within the  
The right, either alone or with any person, to  
designate the persons who shall receive the income  
from, possess, or enjoy, the property.  
owned by the grantor  
under section 676  
(other than by reason annual gift tax  
of section 672(e)) by  
reason of a power in  
the grantor  
Retained annuity, unitrust, and other income  
exclusion is not  
includible in the gross  
estate.  
interests in trusts. If a decedent transferred property  
into a trust and retained or reserved the right to use the  
property, or the right to an annuity, unitrust, or other  
interest in such trust for the property for the decedent's  
life, any period not ascertainable without reference to the  
decedent's death, or for a period that does not, in fact,  
end before the decedent's death, then the decedent's  
right to use the property or the retained annuity, unitrust,  
or other interest (whether payable from income and/or  
principal) is the retention of the possession or enjoyment  
of, or the right to the income from, the property for  
purposes of section 2036. See Regulations section  
20.2036-1(c)(2).  
1. Certain gift taxes (section 2035(b)). Enter on item A  
of Schedule G the total value of the gift taxes that were  
paid by the decedent or the estate on gifts made by the  
decedent or the decedent's spouse within 3 years of  
death.  
The date of the gift, not the date of payment of the gift  
tax, determines whether a gift tax paid is included in the  
gross estate under this rule. Therefore, you should  
carefully examine the Forms 709 filed by the decedent  
and the decedent's spouse to determine what part of the  
total gift taxes reported on them was attributable to gifts  
made within 3 years of death.  
Retained voting rights. Transfers with a retained life  
estate also include transfers of stock in a controlled  
corporation made after June 22, 1976, if the decedent  
-30-  
Instructions for Form 706 (Rev. 09-2023)  
     
retained or acquired voting rights in the stock. If the  
decedent retained direct or indirect voting rights in a  
controlled corporation, the decedent is considered to  
have retained enjoyment of the transferred property. A  
corporation is a controlled corporation if the decedent  
owned (actually or constructively) or had the right (either  
alone or with any other person) to vote at least 20% of  
the total combined voting power of all classes of stock.  
See section 2036(b)(2). If these voting rights ceased or  
were relinquished within 3 years of the decedent's death,  
the corporate interests are included in the gross estate  
as if the decedent had actually retained the voting rights  
until death.  
The amount includible in the gross estate is the value  
of the transferred property at the time of the decedent's  
death. If the decedent kept or reserved an interest or  
right to only a part of the transferred property, the amount  
includible in the gross estate is a corresponding part of  
the entire value of the property.  
A retained life estate does not have to be legally  
enforceable. What matters is that a substantial economic  
benefit was retained. For example, if a parent transferred  
the home title to one’s child, but with the informal  
understanding that the parent was to continue living  
there until the parent’s death, the value of the home  
would be includible in the parent’s estate even if the  
agreement would not have been legally enforceable.  
(and regardless of whether that person had a substantial  
adverse interest in the transferred property).  
The capacity in which the decedent could use a  
power has no bearing. If the decedent gave property in  
trust and was the trustee with the power to revoke the  
trust, the property would be included in the decedent’s  
gross estate. For transfers or additions to an irrevocable  
trust after October 28, 1979, the transferred property is  
includible if the decedent reserved the power to remove  
the trustee at will and appoint another trustee.  
If the decedent relinquished within 3 years of death  
any of the includible powers described above, figure the  
gross estate as if the decedent had actually retained the  
powers until death.  
Only the part of the transferred property that is subject  
to the decedent's power is included in the gross estate.  
For more detailed information on which transfers are  
includible in the gross estate, see Regulations section  
20.2038-1.  
Special Valuation Rules for Certain Lifetime  
Transfers  
Sections 2701 through 2704 provide rules for valuing certain  
transfers to family members.  
Section 2701 deals with the transfer of an interest in a  
corporation or partnership while retaining certain distribution  
rights, or a liquidation, put, call, or conversion right.  
4. Transfers taking effect at death (section 2037). A  
transfer that takes effect at the decedent's death is one  
under which possession or enjoyment can be obtained  
only by surviving the decedent. A transfer is not treated  
as one that takes effect at the decedent's death unless  
the decedent retained a reversionary interest (defined  
later) in the property that immediately before the  
decedent's death had a value of more than 5% of the  
value of the transferred property. If the transfer was made  
before October 8, 1949, the reversionary interest must  
have arisen by the express terms of the instrument of  
transfer.  
Section 2702 deals with the transfer of an interest in a trust  
while retaining any interest other than a qualified interest. In  
general, a qualified interest is a right to receive certain  
distributions from the trust at least annually, or a  
noncontingent remainder interest if all of the other interests in  
the trust are distribution rights specified in section 2702.  
Section 2703 provides rules for the valuation of property  
transferred to a family member but subject to an option,  
agreement, or other right to acquire or use the property at  
less than FMV. It also applies to transfers subject to  
restrictions on the right to sell or use the property.  
A reversionary interest is, generally, any right under  
which the transferred property will or may be returned to  
the decedent or the decedent's estate. It also includes  
the possibility that the transferred property may become  
subject to a power of disposition by the decedent. It does  
not matter if the right arises by the express terms of the  
instrument of transfer or by operation of law. For this  
purpose, reversionary interest does not include the  
possibility that the income alone from the property may  
return to the decedent or become subject to the  
decedent's power of disposition.  
Finally, section 2704 provides that in certain cases, the  
lapse of a voting or liquidation right in a family-owned  
corporation or partnership will result in a deemed transfer.  
These rules have potential consequences for the valuation  
of property in an estate. If the decedent (or any member of  
the decedent’s family) was involved in any such transactions,  
see sections 2701 through 2704 and the related regulations  
for additional details.  
How To Complete Schedule G  
5. Revocable transfers (section 2038). The gross estate  
includes the value of any transferred property which was  
subject to the decedent's power to alter, amend, revoke,  
or terminate the transfer at the time of the decedent's  
death. A decedent's power to change beneficiaries and  
to increase any beneficiary's enjoyment of the property  
are examples of this.  
All transfers (other than outright transfers not in trust and  
bona fide sales) made by the decedent at any time during life  
must be reported on Schedule G, regardless of whether you  
believe the transfers are subject to tax. If the decedent made  
any transfers not described in these instructions, the  
transfers should not be shown on Schedule G. Instead,  
attach a statement describing these transfers by listing:  
It does not matter whether the power was reserved at  
the time of the transfer, whether it arose by operation of  
law, or whether it was later created or conferred. The rule  
applies regardless of the source from which the power  
was acquired, and regardless of whether the power was  
exercisable by the decedent alone or with any person  
The date of the transfer,  
The amount or value of the transferred property, and  
The type of transfer.  
Complete the schedule for each transfer that is included in  
the gross estate under sections 2035(a), 2036, 2037, and  
2038, as described in the instructions for Schedule G.  
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Instructions for Form 706 (Rev. 09-2023)  
     
In the “Item number” column, number each transfer  
consecutively beginning with “1.In the “Description” column,  
list the name of the transferee and the date of the transfer,  
and give a complete description of the property. Transfers  
included in the gross estate should be valued on the date of  
the decedent's death or, if alternate valuation is elected,  
according to section 2032.  
decedent. It does not include a power created or held on  
property transferred by the decedent.  
A power of appointment includes all powers which are, in  
substance and effect, powers of appointment regardless of  
how they are identified and regardless of local property laws.  
For example, if a settlor transfers property in trust for the life  
of the settlor’s spouse, with a power in the spouse to  
appropriate or consume the principal of the trust, the spouse  
has a power of appointment.  
If only part of the property transferred meets the terms of  
section 2035(a), 2036, 2037, or 2038, then only a  
corresponding part of the value of the property should be  
included in the value of the gross estate. If the transferee  
makes additions or improvements to the property, the  
increased value of the property at the valuation date should  
not be included on Schedule G. However, if only a part of the  
value of the property is included, enter the value of the whole  
under the column headed “Description” and explain what part  
was included.  
Attachments. If a transfer, by trust or otherwise, was made  
by a written instrument, attach a copy of the instrument to  
Schedule G. If the copy of the instrument is of public record, it  
should be certified; if not of public record, the copy should be  
verified.  
Some powers do not in themselves constitute a power of  
appointment. For example, a power to amend only  
administrative provisions of a trust that cannot substantially  
affect the beneficial enjoyment of the trust property or income  
is not a power of appointment. A power to manage, invest, or  
control assets, or to allocate receipts and disbursements,  
when exercised only in a fiduciary capacity, is not a power of  
appointment.  
General power of appointment. A general power of  
appointment is a power that is exercisable in favor of the  
decedent, the decedent's estate, the decedent's creditors, or  
the creditors of the decedent's estate, except the following.  
1. A power to consume, invade, or appropriate property for  
the benefit of the decedent that is limited by an  
ascertainable standard relating to health, education,  
support, or maintenance of the decedent.  
Schedule H—Powers of Appointment  
If any assets to which the special rule of Regulations  
section 20.2010-2(a)(7)(ii) applies are reported on  
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2. A power exercisable by the decedent only in conjunction  
with:  
CAUTION  
this schedule, do not enter any value in the last three  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
a. The creator of the power; or  
b. A person who has a substantial interest in the  
property subject to the power, which is adverse to the  
exercise of the power in favor of the decedent.  
Complete Schedule H and file it with the return if you  
answered “Yes” to question 14 of Part 4—General  
Information.  
A part of a power is considered a general power of  
appointment if the power:  
On Schedule H, include the following in the gross estate.  
The value of property for which the decedent possessed  
a general power of appointment (defined later) on the  
date of the decedent’s death.  
1. May only be exercised by the decedent in conjunction  
with another person, and  
2. Is also exercisable in favor of the other person (in  
addition to being exercisable in favor of the decedent,  
the decedent's creditors, the decedent's estate, or the  
creditors of the decedent's estate).  
The value of property for which the decedent possessed  
a general power of appointment that the decedent  
exercised or released before death by disposing of it in  
such a way that if it were a transfer of property owned by  
the decedent, the property would be includible in the  
decedent's gross estate as a transfer with a retained life  
estate, a transfer taking effect at death, or a revocable  
transfer.  
When there is a partial power, figure the amount included  
in the gross estate by dividing the value of the property by the  
number of persons (including the decedent) in favor of whom  
the power is exercisable.  
Date power was created. Generally, a power of  
appointment created by will is considered created on the  
date of the testator's death.  
A power of appointment created by an inter vivos  
instrument is considered created on the date the instrument  
takes effect. If the holder of a power exercises it by creating a  
second power, the second power is considered as created at  
the time of the exercise of the first.  
With the above exceptions, property subject to a power of  
appointment is not includible in the gross estate if the  
decedent released the power completely and the decedent  
held no interest in or control over the property.  
If the failure to exercise a general power of appointment  
results in a lapse of the power, the lapse is treated as a  
release only to the extent that the value of the property that  
could have been appointed by the exercise of the lapsed  
power is more than the greater of $5,000 or 5% of the total  
value, at the time of the lapse, of the assets out of which, or  
the proceeds of which, the exercise of the lapsed power  
could have been satisfied.  
Attachments  
If the decedent ever possessed a power of appointment,  
attach a certified or verified copy of the instrument granting  
the power and a certified or verified copy of any instrument by  
which the power was exercised or released. You must file  
these copies even if you contend that the power was not a  
general power of appointment, and that the property is not  
otherwise includible in the gross estate.  
Powers of Appointment  
A power of appointment determines who will own or enjoy the  
property subject to the power and when they will own or enjoy  
it. The power must be created by someone other than the  
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Instructions for Form 706 (Rev. 09-2023)  
   
that part of the value of the annuity receivable by the  
surviving beneficiary that the decedent's contribution to the  
purchase price of the annuity or agreement bears to the total  
purchase price.  
Schedule I—Annuities  
If any assets to which the special rule of Regulations  
section 20.2010-2(a)(7)(ii) applies are reported on  
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CAUTION  
this schedule, do not enter any value in the last three  
For example, if the value of the survivor's annuity was  
$20,000 and the decedent had contributed 75% of the  
purchase price of the contract, the amount includible is  
$15,000 (75% (0.75) × $20,000).  
columns. See the instructions for Part 5—Recapitulation, item  
10, for information on how to estimate and report the value of  
these assets.  
Complete Schedule l and file it with the return if you  
answered “Yes” to question 16 of Part 4—General  
Information.  
Except as provided under Annuities Under Approved  
Plans, later, contributions made by the decedent's employer  
to the purchase price of the contract or agreement are  
considered made by the decedent if they were made by the  
employer because of the decedent's employment. For more  
information, see section 2039(b).  
Enter on Schedule I every annuity that meets all of the  
conditions under General, later, and every annuity described  
in paragraphs (a) through (h) of Annuities Under Approved  
Plans, later, even if the annuities are wholly or partially  
excluded from the gross estate.  
Definitions  
For a discussion regarding the QTIP treatment of certain  
joint and survivor annuities, see the Schedule M, line 3,  
instructions.  
Annuity. An annuity consists of one or more payments  
extending over any period of time. The payments may be  
equal or unequal, conditional or unconditional, periodic or  
sporadic.  
General  
Examples. The following are examples of contracts (but  
not necessarily the only forms of contracts) for annuities that  
must be included in the gross estate.  
These rules apply to all types of annuities, including pension  
plans, individual retirement arrangements (IRAs), purchased  
commercial annuities, and private annuities.  
1. A contract under which the decedent immediately before  
death was receiving or was entitled to receive, for the  
duration of life, an annuity with payments to continue  
after death to a designated beneficiary, if surviving the  
decedent.  
In general, you must include in the gross estate all or part  
of the value of any annuity that meets the following  
requirements.  
It is receivable by a beneficiary following the death of the  
decedent and by reason of surviving the decedent.  
The annuity is under a contract or agreement entered  
into after March 3, 1931.  
2. A contract under which the decedent immediately before  
death was receiving or was entitled to receive, together  
with another person, an annuity payable to the decedent  
and the other person for their joint lives, with payments to  
continue to the survivor following the death of either.  
The annuity was payable to the decedent (or the  
decedent possessed the right to receive the annuity)  
either alone or in conjunction with another, for the  
decedent's life or for any period not ascertainable without  
reference to the decedent's death or for any period that  
did not in fact end before the decedent's death.  
The contract or agreement is not a policy of insurance on  
the life of the decedent.  
3. A contract or agreement entered into by the decedent  
and employer under which the decedent immediately  
before death and following retirement was receiving, or  
was entitled to receive, an annuity payable to the  
decedent for life. After the decedent's death, if survived  
by a designated beneficiary, the annuity was payable to  
the beneficiary with payments either fixed by contract or  
subject to an option or election exercised or exercisable  
by the decedent. However, see Annuities Under  
Approved Plans, later.  
Note. A private annuity is an annuity issued by a party not  
engaged in the business of writing annuity contracts, typically  
a junior generation family member or a family trust.  
An annuity contract that provides periodic payments to a  
person for life and ceases at the person's death is not  
includible in the gross estate. Social security benefits are not  
includible in the gross estate even if the surviving spouse  
receives benefits.  
4. A contract or agreement entered into by the decedent  
and the decedent's employer under which at the  
decedent's death, before retirement, or before the  
expiration of a stated period of time, an annuity was  
payable to a designated beneficiary, if surviving the  
decedent. However, see Annuities Under Approved  
Plans, later.  
An annuity or other payment that is not includible in the  
decedent's or the survivor's gross estate as an annuity may  
still be includible under some other applicable provision of  
the law. For example, see Powers of Appointment and the  
instructions for Schedule G—Transfers During Decedent's  
Life, earlier. See also Regulations section 20.2039-1(e).  
5. A contract or agreement under which the decedent  
immediately before death was receiving, or was entitled  
to receive, an annuity for a stated period of time, with the  
annuity to continue to a designated beneficiary, surviving  
the decedent, upon the decedent's death and before the  
expiration of that period of time.  
If the decedent retired before January 1, 1985, see  
Annuities Under Approved Plans, later, for rules that allow the  
exclusion of part or all of certain annuities.  
6. An annuity contract or other arrangement providing for a  
series of substantially equal periodic payments to be  
made to a beneficiary for life or over a period of at least  
36 months after the date of the decedent's death under  
an individual retirement account, annuity, or bond as  
Part Includible  
If the decedent contributed only part of the purchase price of  
the contract or agreement, include in the gross estate only  
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Instructions for Form 706 (Rev. 09-2023)  
 
described in section 2039(e) (before its repeal by P.L.  
98-369).  
e. A bond purchase plan described in section 405 (before  
its repeal by P.L. 98-369, effective for obligations issued after  
December 31, 1983).  
Exclusion rules for pension, etc., plans. If an annuity  
under an approved plan described in (a) through (e) above is  
receivable by a beneficiary other than the executor and the  
decedent made no contributions under the plan toward the  
cost, no part of the value of the annuity, subject to the  
$100,000 limitation (if applicable), is includible in the gross  
estate.  
If the decedent made a contribution under a plan  
described in (a) through (e) above toward the cost, include in  
the gross estate on this schedule that proportion of the value  
of the annuity which the amount of the decedent's  
contribution under the plan bears to the total amount of all  
contributions under the plan. The remaining value of the  
annuity is excludable from the gross estate subject to the  
$100,000 limitation (if applicable). For the rules to determine  
whether the decedent made contributions to the plan, see  
Regulations section 20.2039-1(c).  
Payable to the decedent. An annuity or other payment was  
payable to the decedent if, at the time of death, the decedent  
was in fact receiving an annuity or other payment, with or  
without an enforceable right to have the payments continued.  
Right to receive an annuity. The decedent had the right to  
receive an annuity or other payment if, immediately before  
death, the decedent had an enforceable right to receive  
payments at some time in the future, whether or not at the  
time of death the decedent had a present right to receive  
payments.  
Annuities Under Approved Plans  
The following rules relate to whether part or all of an  
otherwise includible annuity may be excluded. These rules  
have been repealed and apply only if the decedent either:  
On December 31, 1984, was both a participant in the  
plan and in pay status (for example, had received at least  
one benefit payment on or before December 31, 1984)  
and had irrevocably elected the form of the benefit before  
July 18, 1984; or  
IRAs and retirement bonds. The following plans are  
approved plans for the exclusion rules.  
f. An individual retirement account described in section  
Had separated from service before January 1, 1985, and  
did not change the form of benefit before death.  
408(a).  
g. An individual retirement annuity described in section  
408(b).  
The amount excluded cannot exceed $100,000 unless  
either of the following conditions is met.  
h. A retirement bond described in section 409(a) (before  
On December 31, 1982, the decedent was both a  
participant in the plan and in pay status (for example, had  
received at least one benefit payment on or before  
December 31, 1982) and the decedent irrevocably  
elected the form of the benefit before January 1, 1983.  
The decedent separated from service before January 1,  
1983, and did not change the form of benefit before  
death.  
its repeal by P.L. 98-369).  
Exclusion rules for IRAs and retirement bonds. These  
plans are approved plans only if they provide for a series of  
substantially equal periodic payments made to a beneficiary  
for life, or over a period of at least 36 months after the date of  
the decedent's death.  
Subject to the $100,000 limitation (if applicable), if an  
annuity under a “plan” described in (f) through (h) above is  
receivable by a beneficiary other than the executor, the entire  
value of the annuity is excludable from the gross estate even  
if the decedent made a contribution under the plan.  
However, if any payment to or for an account or annuity  
described in paragraph (f), (g), or (h) earlier was not  
allowable as an income tax deduction under section 219 (and  
was not a rollover contribution, as described in section  
2039(e) before its repeal by P.L. 98-369), include in the gross  
estate on this schedule that proportion of the value of the  
annuity which the amount not allowable as a deduction under  
section 219 and not a rollover contribution bears to the total  
amount paid to or for such account or annuity. For more  
information, see Regulations section 20.2039-5.  
Approved Plans  
Approved plans may be separated into two categories.  
Pension, profit-sharing, stock bonus, and other similar  
plans.  
IRAs and retirement bonds.  
Different exclusion rules apply to the two categories of  
plans.  
Pension, etc., plans. The following plans are approved  
plans for the exclusion rules.  
a. An employees' trust (or a contract purchased by an  
employees' trust) forming part of a pension, stock bonus, or  
profit-sharing plan that met all the requirements of section  
401(a), either at the time of the decedent's separation from  
employment (whether by death or otherwise) or at the time of  
the termination of the plan (if earlier).  
b. A retirement annuity contract purchased by the  
employer (but not by an employees' trust) under a plan that,  
at the time of the decedent's separation from employment (by  
death or otherwise), or at the time of the termination of the  
plan (if earlier), was a plan described in section 403(a).  
c. A retirement annuity contract purchased for an  
employee by an employer that is an organization referred to  
in section 170(b)(1)(A)(ii) or (vi), or that is a religious  
organization (other than a trust), and that is exempt from tax  
under section 501(a).  
Rules applicable to all approved plans. The following  
rules apply to all approved plans described in paragraphs (a)  
through (h), earlier.  
If any part of an annuity under a “plan” described in (a)  
through (h), earlier, is receivable by the executor, it is  
generally includible in the gross estate to the extent that it is  
receivable by the executor in that capacity. In general, the  
annuity is receivable by the executor if it is to be paid to the  
executor or if there is an agreement (expressed or implied)  
that it will be applied by the beneficiary for the benefit of the  
estate (such as in discharge of the estate's liability for death  
taxes or debts of the decedent, etc.) or that its distribution will  
be governed to any extent by the terms of the decedent's will  
or the laws of descent and distribution.  
d. Chapter 73 of title 10 of the United States Code.  
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Instructions for Form 706 (Rev. 09-2023)  
IF . . .  
THEN . . .  
If data available to you does not indicate whether the plan  
satisfies the requirements of section 401(a), 403(a), 408(a),  
408(b), or 409(a), you may obtain that information from the  
IRS office where the employer's principal place of business is  
located.  
an annuity under an individual  
retirement account or annuity  
became payable to any beneficiary account or annuity that was not  
because that beneficiary survived  
the decedent and is payable to the  
beneficiary for life or for at least 36  
months following the decedent's  
death  
state the ratio of the amount paid  
for the individual retirement  
allowable as an income tax  
deduction under section 219 (other  
than a rollover contribution) to the  
total amount paid for the account or  
annuity.  
Line A. Lump-Sum Distribution Election  
Note. The following rules have been repealed and apply only  
if the decedent:  
On December 31, 1984, was both a participant in the  
plan and in pay status (for example, had received at least  
one benefit payment on or before December 31, 1984)  
and had irrevocably elected the form of the benefit before  
July 18, 1984; or  
the annuity is payable out of a trust  
or other fund  
the description should be  
sufficiently complete to fully identify  
it.  
the annuity is payable for a term of  
years