706 forma Instrukcijos
Instrukcijos forma 706, JAV turtas (ir generation-Skipping Transfer) mokesčių grąžinimas
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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
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
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.
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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.
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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,
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Identifying exhibits. Copies of tax returns filed with Form
706 must be identified as exhibits to the Form 706.
Annuities,
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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),
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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),
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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,
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Dower or curtesy (or statutory estate) of the surviving
spouse, and
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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
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.
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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;
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Enter “Supplemental Information” across the top of
page 1 of the form;
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Include a statement of what has changed, along with the
supporting information; and
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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 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
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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
please wait at least 9 months after filing Form 706 to request
an ETCL.
9957 established a user fee of $67 for persons requesting the
issuance of an ETCL. To make an ETCL request after
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
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
hours a day, 7 days a week to:
Download forms, including talking tax forms, instructions,
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and publications;
Order IRS products online;
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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
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Instructions for Form 706 (Rev. 09-2023)
Sign up to receive local and national tax news by email.
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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.
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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.
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Form 712, Life Insurance Statement.
Form 2848, Power of Attorney and Declaration of
Representative.
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Also consider the following.
Form 706 has 29 numbered pages.
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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.
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Form 4808, Computation of Credit for Gift Tax.
Form 8821, Tax Information Authorization.
Form 8822, Change of Address.
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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.
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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.
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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.
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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
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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
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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.
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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.
-11-
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.
•
•
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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.
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
Protective election, later.
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,
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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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
-17-
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
-18-
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
-20-
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.
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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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.
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.
.
.
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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
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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
.
.
.
.
.
.
.
.
.
.
.
.
.
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
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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
.
.
.
.
.
.
.
.
.
.
.
- - - - - - -
- - - - - - -
- - - - - - -
Interest accrued on item 1, from Nov. 1, 2022, to Jan. 1,
2023
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
- - - - - - -
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
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
- - - - - - -
- - - - - - -
- - - - - - -
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
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
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
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
- - - - - -
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
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
- - - - - -
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.
•
-27-
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
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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
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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
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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
!
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
!
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
include the duration of the term and
the date on which it began.
Had separated from service before January 1, 1985, and
did not change the form of benefit before death.
•
Generally, the entire amount of any lump-sum distribution
the annuity is payable for the life of
a person other than the decedent
include the date of birth of that
person.
is included in the decedent's gross estate. However, under
this special rule, all or part of a lump-sum distribution from a
qualified (approved) plan will be excluded if the lump-sum
distribution is included in the recipient's income for income
tax purposes.
the annuity is wholly or partially
excluded from the gross estate
enter the amount excluded under
“Description” and explain how you
figured the exclusion.
If the decedent was born before 1936, the recipient may
be eligible to elect special “10-year averaging” rules (under
repealed section 402(e)) and capital gain treatment (under
repealed section 402(a)(2)) in figuring the income tax on the