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Forma 706-GS(T) Návody

Pokyny pre formulár 706-GS(T), generácie-Skipping Transfer daňové priznanie pre Terminácie

Rev. November 2021

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Department of the Treasury  
Internal Revenue Service  
Instructions for Form  
706-GS(T)  
(Rev. November 2021)  
Generation-Skipping Transfer Tax Return for Terminations  
Section references are to the Internal Revenue  
Code unless otherwise noted.  
termination occurs. If the due date falls  
Examples of such arrangements are  
on a Saturday, Sunday, or legal holiday, insurance and annuity contracts,  
file on the next business day.  
arrangements involving life estates and  
remainders, and estates for years.  
Future Developments  
If you are not able to file the return by  
the due date, you may request an  
extension of time to file by filing Form  
7004, Application for Automatic  
Extension of Time To File Certain  
Business Income Tax, Information, and  
Other Returns. The extension is  
automatic, so you do not have to sign  
the form or provide a reason for your  
request. You must file Form 7004 on or  
before the regular due date of Form  
706-GS(T). See Form 7004 for more  
information.  
In general, a transfer of property in  
which the identity of the transferee is  
conditioned on the occurrence of an  
event is a transfer in trust. This rule  
does not apply to a testamentary trust,  
however, if the event is to occur within 6  
months of the transferor's date of death.  
For the latest information about  
developments related to Form  
706-GS(T) and its instructions, such as  
legislation enacted after they were  
published, go to IRS.gov/Form706GST.  
What’s New  
Nonexplicit trusts do not include  
GST exemption increased. The  
generation skipping tax (GST)  
decedents' estates.  
In the case of a nonexplicit trust, the  
person in actual or constructive  
possession of the property involved is  
considered the trustee and is liable for  
filing Form 706-GS(T).  
If you are filing this return for a  
nonexplicit trust, see the instructions for  
line 1b.  
exemption amount increased for 2021.  
Reminder  
Where To File  
For federal tax purposes, marriages of  
couples of the same sex are treated the  
same as marriages of couples of the  
opposite sex. The term “spouse”  
includes an individual married to a  
person of the same sex. However,  
individuals who have entered into a  
registered domestic partnership, civil  
union, or other similar relationship that  
isn’t considered a marriage under state  
law aren’t considered married for  
federal tax purposes. If you believe the  
new law may affect your estate or gift  
tax liability or filing requirement, please  
continue to monitor IRS.gov for  
File Form 706-GS(T) at the following  
address.  
Department of the Treasury  
Internal Revenue Service Center  
Kansas City, MO 64999  
Separate trusts. You must treat as  
separate trusts:  
Portions of a trust that are attributable  
to transfers from different transferors,  
and  
If using a private delivery service, send  
Form 706-GS(T) to:  
Substantially separate and  
independent shares of different  
beneficiaries in a trust.  
Internal Revenue Service  
333 W. Pershing Road  
Kansas City, MO 64108  
If you are the trustee for separate  
trusts as described above, you must file  
a single Form 706-GS(T) but separate  
Schedules A for each separate trust, as  
that term is used here.  
Amending Form 706-GS(T)  
additional guidance.  
The address for filing an amended Form  
706-GS(T) is:  
General Instructions  
Terminations Subject to  
GST Tax  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
Purpose of Form  
Form 706-GS(T) is used by a trustee to  
figure and report the tax due from  
certain trust terminations that are  
subject to the generation-skipping  
transfer (GST) tax.  
A termination may occur by reason of  
death, lapse of time, release of a power,  
or any other means.  
7940 Kentucky Drive  
Florence, KY 41042-2915  
In general, all taxable terminations  
are subject to the GST tax. A taxable  
termination is the conclusion of an  
interest in property held in trust unless:  
If using a private delivery service, send  
amended Form 706-GS(T) to:  
Who Must File  
Internal Revenue Service Center  
Attn: E&G, Stop 824G  
In general, the trustee of any trust that  
has a taxable termination (defined  
below) must file Form 706-GS(T) for the  
tax year in which the termination  
occurred.  
Immediately after the termination, a  
non-skip person has an interest in the  
property, or  
7940 Kentucky Drive  
Florence, KY 41042-2915  
At no time after the termination may a  
distribution be made from the trust to a  
skip person.  
Trusts  
When To File  
Nonexplicit trusts. An arrangement  
that has substantially the same effect as  
a trust will be treated as a trust even  
though it is not an explicit trust.  
Exceptions  
Generally, the trustee must file Form  
706-GS(T) by April 15 of the year  
following the calendar year in which the  
Irrevocable trusts. Except as  
described under Additions to  
Aug 30, 2021  
Cat. No. 10829R  
irrevocable trusts below, the GST tax  
does not apply to any termination of an  
interest in a trust that was irrevocable on  
September 25, 1985. Any trust in  
tax may not apply. See Regulations  
section 26.2601-1(b)(3) for a definition  
of the term “mental disability” and  
additional details.  
Transition Rule for Revocable  
Trusts  
The GST tax will not apply to any  
termination of an interest in a revocable  
trust, provided:  
existence on September 25, 1985, will  
Exceptions to Additions Rule  
be considered irrevocable unless:  
The trust was executed before  
Do not treat as an addition to a trust any  
addition that is made pursuant to an  
instrument or arrangement that is  
1. On September 25, 1985, the  
settlor held a power with respect to such  
trust that would have caused the value  
of the trust to be included in the settlor's  
gross estate for federal estate tax  
purposes by reason of section 2038  
(regarding revocable transfers) if the  
settlor had died on September 25, 1985;  
or  
October 22, 1986;  
The trust as it existed on October 21,  
1986, was not amended after October  
21, 1986, in any way that created or  
increased the amount of a  
covered by the transition rules  
discussed above under Transition Rule  
for Revocable Trusts and Transition  
Rule in Case of Mental Disability. This  
also applies to inter vivos transfers if the  
same property would have been added  
to the trust by such an instrument. For  
examples illustrating this rule, see  
Regulations section 26.2601-1(b)(5)(ii).  
generation-skipping transfer;  
Except as provided in Exceptions to  
Additions Rule, later, no additions were  
made to the trust; and  
2. Regarding a policy of life  
The settlor died before January 1,  
insurance that is treated as a trust under  
section 2652(b), the insured possessed  
an incident of ownership on September  
25, 1985, that would have caused the  
insurance proceeds to be included in  
the insured's gross estate for federal  
estate tax purposes if the insured had  
died on September 25, 1985.  
1987.  
A revocable trust is any trust that on  
Definitions  
October 22, 1986, was not an  
irrevocable trust, as defined previously,  
and would not have been an irrevocable  
trust had it been created before  
September 25, 1985.  
Skip Persons  
For termination purposes, skip person  
means a trust beneficiary who is either:  
1. A natural person assigned to a  
generation that is two or more  
generations below the settlor's  
generation, or  
The instructions under Trusts  
containing qualified terminable interest  
property, previously, apply also to  
revocable trusts covered by these  
transition rules.  
Amendments to revocable trusts. An  
amendment to a revocable trust in  
existence on October 21, 1986, will not  
be considered to result in the creation  
of, or an increase in the amount of, a  
generation-skipping transfer where:  
For more information, see  
Regulations section 26.2601-1(b)(i) and  
(ii).  
2. A trust that meets either of the  
Trusts containing qualified termina-  
ble interest property. Irrevocable  
trusts in existence on September 25,  
1985, that hold qualified terminable  
interest property (QTIP) (as defined in  
section 2056(b)(7)) as a result of an  
election under section 2056(b)(7) or  
2523(f), are treated for purposes of the  
GST tax as if the QTIP election had not  
been made. Thus, transfers from such a  
trust will not be subject to the GST tax.  
following conditions:  
a. All interests in the trust are held  
by skip persons; or  
b. No person holds an interest in the  
trust, and at no time after the transfer to  
the trust may a distribution be made to a  
non-skip person.  
The amendment is administrative or  
clarifying in nature, and it only  
incidentally increases the amount  
transferred to a skip person (defined  
below), or  
Interest  
A person holds an interest in the trust if,  
at the time the determination is made,  
the person:  
Additions to irrevocable trusts. If an  
addition has been made after  
It is designed to perfect a marital or  
September 25, 1985, to an irrevocable  
trust, the termination of any interest in  
the trust may be subject in part to the  
GST tax. Additions include constructive  
additions described in Regulations  
section 26.2601-1(b)(1)(v).  
1. Has a current right to receive  
charitable deduction for an existing  
transfer, and it only incidentally  
increases the amount transferred to a  
skip person (defined later).  
income or corpus from the trust;  
2. Is a permissible current recipient  
of income or corpus from the trust (other  
than charitable entities); or  
3. Is a charitable or other entity  
described in section 2055(a) and the  
trust is a charitable remainder annuity  
trust, a charitable remainder unitrust, or  
a pooled income fund.  
See Regulations section 26.2601-1(b)  
(2)(vii) for examples demonstrating  
these rules.  
Medical and educational exclusion.  
If all of the property to which the  
termination applied has been distributed  
and used for medical or educational  
expenses of the transferee such that if  
the transfer had been made inter vivos  
by an individual, it would not have been  
subject to gift tax by reason of the  
medical and educational exclusion, then  
the termination is not a  
Additions to revocable trusts. If an  
addition (including a constructive  
addition) to a revocable trust is made  
after October 21, 1986, and before the  
death of the settlor, all subsequent  
terminations of interests in the trust will  
be subject to the GST tax if the other  
requirements of taxability are met. For  
settlors dying before January 1, 1987,  
any addition made to a revocable trust  
after the death of the settlor will be  
treated as made to an irrevocable trust.  
Any interest that is created primarily  
to postpone or avoid the GST tax is  
disregarded.  
Non-Skip Person  
A non-skip person is any person who is  
generation-skipping transfer, and you  
do not have to file this form to report the  
termination.  
not a skip person.  
Generation Assignment  
A generation is determined along family  
Transition Rule in Case of  
Mental Disability  
lines as follows.  
1. Where the beneficiary is a lineal  
descendant of a grandparent of the  
If the settlor was under a mental  
disability on October 22, 1986, the GST  
-2-  
transferor (for example, the donor's  
cousin, niece, nephew, etc.), the  
number of generations between the  
transferor and the descendant is  
determined by subtracting the number  
of generations between the grandparent  
and the transferor from the number of  
generations between the grandparent  
and the descendant.  
after July 18, 2005. See Regulations  
section 26.2651-1(a)(2)(iii).  
Generation Assignment Where  
Intervening Parent Is Deceased  
Multiple Skips  
If you made a gift or bequest to your  
grandchild and at the time you made the  
gift or bequest, the grandchild's parent  
(who is your or your spouse's or your  
former spouse's child) is deceased,  
then for purposes of generation  
assignment, your grandchild will be  
considered to be your child rather than  
your grandchild. Your grandchild's  
children will be treated as your  
If after a generation-skipping transfer,  
the property transferred is held in trust,  
then for the purpose of determining the  
taxability of subsequent transfers from  
the trust involving that property, the  
transferor of the property is assigned to  
the first generation above the highest  
generation of any person who has an  
interest in the trust immediately after the  
initial transfer.  
2. Where the beneficiary is the lineal  
descendant of a grandparent of a  
spouse (or former spouse) of the  
transferor, the number of generations  
between the transferor and the  
grandchildren rather than your  
great-grandchildren.  
descendant is determined by  
Penalties and Interest  
This rule governs generation  
assignment of lineal descendants below  
the level of grandchild. For example, if  
your grandchild is deceased, your  
great-grandchildren who are lineal  
descendants of the deceased  
grandchild are considered your  
grandchildren for purposes of the GST  
tax.  
subtracting the number of generations  
between the grandparent and the  
spouse (or former spouse) from the  
number of generations between the  
grandparent and the descendant.  
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 penalties  
for willful attempts to evade payment of  
tax.  
3. For this purpose, a relationship  
by adoption is considered a blood  
relationship. A relationship by half-blood  
is considered a relationship by whole  
blood.  
4. The spouse or former spouse of a  
transferor or lineal descendant is  
considered to belong to the same  
generation as the transferor or lineal  
descendant, as the case may be.  
Section 6662 provides penalties for  
underpayments of GST taxes due to  
negligence, intentional disregard of  
This rule also applies to other lineal  
descendants. For example, if property is rules and regulations, or a substantial or  
transferred to an individual who is a  
gross valuation understatement. A  
descendant of a parent of the transferor, substantial valuation understatement  
and that individual's parent (who is a  
lineal descendant of the parent of the  
transferor) is deceased at the time the  
transfer is subject to gift or estate tax,  
then for purposes of generation  
assignment, the individual is treated as  
if he or she is a member of the  
occurs when the reported value of  
property on Form 706-GS(T) is 65% or  
less of the actual value of the property.  
A gross valuation understatement  
occurs when the reported value of the  
property listed on Form 706-GS(T) is  
40% or less of the actual value of the  
property. No penalty will be assessed if  
the underpayment of GST tax,  
A person who is not assigned to a  
generation according to the rules above  
is assigned to a generation based on his  
or her birth date as follows.  
1. A person who was born not more  
than 121/2 years after the transferor is in  
the transferor's generation.  
generation that is one generation below  
the lower of:  
The transferor's generation; or  
attributable to substantial or gross  
valuation understatement, does not  
exceed $5,000.  
The generation assignment of the  
2. A person born more than 121/2  
years, but not more than 371/2 years,  
after the transferor is in the first  
youngest living ancestor of the  
individual, who is also a descendant of  
the parent of the transferor.  
Interest will be charged on taxes not  
paid by their due date, even if an  
extension of time to file is granted.  
Interest is also charged on any additions  
to tax imposed by section 6651 from the  
due date of the return (including any  
extensions) until the addition to tax is  
paid.  
generation younger than the transferor.  
3. Similar rules apply for a new  
The same rules apply to the  
generation assignment of any  
descendant of the individual.  
generation every 25 years.  
If more than one of the rules for  
assigning generations applies to a  
beneficiary, the beneficiary is generally  
assigned to the youngest of the  
generations that apply.  
This rule does not apply to a transfer  
to an individual who is not a lineal  
descendant of the transferor if the  
transferor has any living lineal  
descendants.  
Return preparer. The Small Business  
and Work Opportunity Act of 2007  
extended return preparer penalties to all  
return preparers. Return preparers who  
prepare any return or claim for refund  
that reflects an 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  
derived (or to be derived) for the  
If an entity such as a partnership,  
corporation, trust, or estate has an  
interest in property, each individual who  
has a beneficial interest in the entity (for  
example, partners, shareholders, and  
beneficiaries) is treated as having an  
interest in the property. The individual is  
then assigned to a generation using the  
rules described above.  
If any transfer of property to a trust  
would have been a direct skip except for  
this generation assignment rule, then  
the rule also applies to transfers from  
the trust attributable to such property.  
Ninety-day rule. For purposes of  
determining if an individual's parent is  
deceased at the time of a testamentary  
transfer, an individual's parent who dies  
no later than 90 days after a transfer  
occurring by reason of the death of the  
transferor is treated as having  
preparation of each such return. Return  
preparers who prepare a return or claim  
for refund that reflects an  
Government entities and certain  
charitable organizations are assigned to  
the transferor's generation.  
understatement of tax liability due to  
willful or reckless conduct are subject to  
Terminations in their favor will never be  
generation-skipping transfers.  
predeceased the transferor. The 90-day a penalty of $5,000 or 75% of the  
rule applies to transfers occurring on or  
income derived (or income to be  
-3-  
derived), whichever is greater, for the  
preparation of each such return. See  
sections 6694(a) and 6694(b), the  
related regulations, and Ann. 2009-15,  
2009-11 I.R.B. 687 (available at  
more information.  
You can also apply for an EIN at  
Also, if you are reporting separate  
trusts, defined above, on this Form  
706-GS(T), explain why you are treating  
parts of the trust as separate trusts.  
Part II—Trust Information  
Line 4  
Whenever property is transferred into a  
pre-existing trust, the inclusion ratio  
must be refigured. See Multiple  
transfers, later, for the rule on how to  
refigure the inclusion ratio.  
Line 3  
You may elect alternate valuation under  
section 2032 for all terminations in the  
same trust that occurred at the same  
time as and as a result of the death of  
an individual. If you elect alternate  
valuation, you must use it to value all  
property included in those terminations.  
Signature  
Form 706-GS(T) must be signed by the  
trustee or by an authorized  
representative.  
Line 7  
If you fill in your own return, leave the  
If a qualified terminable interest property  
deduction was taken by the settlor as  
You may not elect alternate valuation  
unless the election will decrease both  
the total value of the property interests  
that were subject to the termination and  
the total net GST tax due after the  
allowable credit.  
Check the box on line 3 of all the  
applicable Schedules A if you elect  
alternate valuation. Once made, the  
election cannot be revoked. You may  
make the election on a late filed Form  
706-GS(T), provided it is not filed later  
than 1 year after the due date (including  
extensions).  
Paid Preparer Use Only space blank. If  
someone prepares your return and does donor spouse or by the executor of a  
not charge you, that person should not  
sign the return.  
deceased settlor's estate for the transfer  
of any property into this trust, the donor  
spouse or the executor, as the case  
may be, may have made an election at  
that time to treat such transfer for the  
purpose of the GST tax as if it was not  
qualified terminable interest property. In  
this case, you must refer to the gift tax  
return (Form 709, United States Gift  
(and Generation-Skipping Transfer) Tax  
Return) of the donor spouse or the  
deceased settlor's estate tax return  
(Form 706, United States Estate (and  
Generation-Skipping Transfer) Tax  
Return) for the information needed to  
figure the inclusion ratio.  
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 taxpayer.  
If you elect alternate valuation, value  
the property interest that has been  
terminated as follows.  
Note. A paid preparer may sign original  
or amended returns by rubber stamp,  
mechanical device, or computer  
software program.  
1. Any property distributed or  
otherwise disposed of or separated from  
the trust within 6 months after the  
termination is valued on the date of  
distribution or other disposition. Value  
the property on the date it ceases to  
form a part of the trust; that is, on the  
date the title passes as a result of its  
distribution or other disposition.  
2. Any property not distributed or  
otherwise disposed of within 6 months  
following the termination is valued on  
the date 6 months after the termination.  
3. Any property or interest that is  
affected by mere lapse of time is valued  
as of the time of termination. However,  
you may change this date of termination  
value to the value as of the date of  
distribution or other disposition to  
account for any change that is not due  
to mere lapse of time.  
Schedule A (Lines 1–4)  
Specific Instructions  
Note. If you need more than one  
Schedule A, make copies before  
Complete Form 706-GS(T) in the  
following order: Parts I and II,  
Schedule A (through line 4),  
Schedule B, Schedule A (lines 5  
through 10), Part III.  
completing it. Also, make a copy of  
Schedule B for each Schedule A you  
will file. If you need additional space to  
provide all the required information for  
any given schedule, attach a separate  
sheet of the same size to that schedule.  
Part I—General  
Information  
Line 1b. Trust's Employer  
Identification Number  
Combine on a single Schedule A all  
terminations from a single trust that  
have the same inclusion ratio (as  
discussed later). However, you must  
complete a separate Schedule A for  
each terminating interest that has a  
different inclusion ratio. Number each  
Schedule A consecutively in the space  
provided at the top.  
All trusts filing Form 706-GS(T) must  
have an employer identification number  
(EIN). A nonexplicit trust, defined  
above, must have an EIN that is  
separate from any other entity's EIN and  
that will be used only by the entity in its  
capacity as the nonexplicit trust.  
Line 2  
For the purposes of line 2, termination  
means the conclusion (for example, by  
death, lapse of time, or release of  
power, etc.) of an interest in property  
held in trust unless:  
If the alternate valuation date falls  
after the initial due date of the return,  
you must request an extension to file on  
Form 7004. The extension is automatic,  
so you do not have to sign the form or  
provide a reason for your request. See  
Form 7004 for more information.  
A trust or nonexplicit trust that does  
not have an EIN should apply for one on  
Form SS-4, Application for Employer  
Identification Number. You can get  
Immediately after the termination, a  
Form SS-4, and other IRS tax forms and  
publications, by visiting IRS.gov/Forms.  
non-skip person has an interest in such  
property; or  
Line 4  
At no time after the termination is it  
Send Form SS-4 to the address  
listed under Where To File. If you do not  
receive the EIN by the due date for the  
706-GS(T), write “Applied for” on  
line 1b.  
possible for a distribution (including  
distributions on termination) to be made  
from the trust to a skip person.  
Terminations of interests in trusts to  
which additions have been made.  
As described earlier, when an addition  
is made to an irrevocable trust after  
-4-  
September 25, 1985, only the portion of  
the trust resulting from the addition is  
subject to the GST tax. For terminations,  
this portion is the product of the  
and lot, etc. For rural property, report  
the township, range, landmarks, etc.  
Schedule B(1)—General Trust  
Debts, Expenses, and Taxes  
Report here only those expenses  
related to the entire trust. Examples of  
such expenses are trustee's fees,  
administrative expenses, financial  
advisor's fees, and accounting fees.  
Column a. Item no. Assign an item  
number to each separate expense.  
These will not necessarily correspond  
with the item numbers on Schedule A.  
Column b. Description. List the  
names and addresses of persons to  
whom the expenses are payable and  
describe the nature of the expenses.  
Column c. Amount. Enter here the  
entire amount of the expense for the tax  
year for which the return is being filed.  
Line 2. Figure the percentage of  
expense to allocate to the property  
involved in the termination as follows.  
1. Divide the value of the interest  
that has been terminated by the total  
value of the trust at the time of the  
termination; and  
Stocks and bonds. For stocks,  
give:  
allocation fraction and the value of the  
property subject to the termination  
(including accumulated income and  
appreciation on that property).  
Number of shares;  
Whether common or preferred;  
Issue;  
Par value where needed for  
The allocation fraction is a fraction,  
the numerator of which is the value of  
the addition as of the date it was made  
(regardless of whether it was subject to  
gift or estate tax). The denominator of  
the fraction is the fair market value of  
the entire trust immediately after the  
addition, less any amount of expenses,  
indebtedness, or taxes that would be  
allowable as a deduction under section  
2053.  
When there is more than one  
addition, the allocation fraction must be  
revised after each addition. The  
numerator of the revised fraction is the  
sum of:  
valuation;  
Price per share;  
Exact name of corporation;  
Principal exchange upon which sold,  
if listed on an exchange; and  
CUSIP number.  
For bonds, give:  
Quantity and denomination;  
Name of obligor;  
Date of maturity;  
Principal exchange, if listed on an  
exchange;  
Interest rate;  
Interest due date; and  
CUSIP number.  
If the stock or bond is unlisted, show  
The value of the portion of the trust  
the company's principal business office.  
subject to the GST tax immediately  
before the last addition, and  
The CUSIP (Committee on Uniform  
Security Identification Procedure)  
number is a nine-digit number assigned  
to all stocks and bonds traded on major  
exchanges and many unlisted  
The amount of the latest addition.  
The denominator of the revised  
2. Multiply the result by a fraction,  
the numerator of which is the number of  
days in the year through the date of the  
termination, and the denominator of  
which is the total number of days in the  
year (or, if the entire trust was  
fraction is the total value of the entire  
trust immediately after the latest  
addition.  
securities. Usually, the CUSIP number  
is printed on the face of the stock  
certificate. If the CUSIP number is not  
printed on the certificate, it may be  
obtained through the company's  
transfer agent.  
If the addition results from a  
generation-skipping transfer, reduce  
both the numerator and denominator by  
the amount of any GST tax imposed on  
the transfer and recovered from the  
trust.  
Round off the allocation fraction to  
five decimal places (for example,  
“.00123”).  
Column a. Item no. Identify by  
separate item number all property in  
which an interest has terminated during  
the tax year. You may combine under  
the same item number all property that  
has the same termination date,  
valuation date, and unit value, such as  
stocks or bonds. Otherwise, assign a  
separate item number to each article of  
property.  
terminated during the year, the total  
number of days the trust was in  
existence during the year).  
If there is more than one termination  
during the year, you must reduce the  
total expense used in the allocation by  
the expense allocated to the prior  
terminations. For example, assume that  
the total administrative expense for the  
year was $1,000 and $300 was  
Other personal property. Any  
interest in personal property involved in  
a termination must be described in  
enough detail that the IRS can value it.  
Column d. Valuation date. Unless  
you elected alternate valuation by  
checking the box on line 3 of  
allocated to the first termination. The  
expense allocated to the second  
termination would be a percentage of  
$700, not of the entire $1,000.  
Schedule A, the valuation date should  
be the same as the termination date.  
Column e. Value. Reduce the value of  
any property being reported on  
Schedule A by the amount of any  
consideration provided by the skip  
person.  
Schedule B(2)—Specific  
Termination-Related Debts,  
Expenses, and Taxes  
Report here only those expenses  
related solely to the interest that has  
terminated. Examples of these  
expenses are property tax on real  
estate, the cost of selling property, or  
attorney's fees for defending the title to  
property.  
Column a. Item no. Assign an item  
number to each separate expense. This  
will not necessarily correspond with the  
item numbers on Schedule A.  
Explain how the values reported in  
column e were figured and attach  
copies of any appraisals.  
Column b. Description of property.  
Describe each article of property  
assigned an item number as follows.  
Real estate. 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 number, ward, subdivision, block  
Schedules B(1) and B(2)  
To figure the taxable amount for a  
taxable termination, you may deduct  
expenses similar to those deductible  
under section 2053 from the value of the  
property subject to the termination.  
Column b. Description. List the  
names and addresses of persons to  
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whom the expenses are payable and  
describe the nature of the expense. List  
the item number(s) from Schedule A to  
which the expense relates.  
Column c. Amount. If the expense  
relates to more property than that  
was deemed made under section  
2632(b)(1).  
Year of Transfer  
GST  
Exemption  
$1,010,000  
$1,030,000  
$1,060,000  
$1,100,000  
$1,120,000  
$1,500,000  
$2,000,000  
$3,500,000  
$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  
If the allocation of the exemption to  
an inter vivos transfer is not made on a  
timely filed gift tax return and is not  
deemed made under section 2632(b)  
(1), the value for purposes of the  
applicable fraction is the value of the  
property transferred at the time the  
allocation under section 2632(a) is filed  
with the IRS.  
1999 . . . . . . . . . . . . .  
2000 . . . . . . . . . . . . .  
2001 . . . . . . . . . . . . .  
2002 . . . . . . . . . . . . .  
2003 . . . . . . . . . . . . .  
2004 and 2005 . . . . . . .  
2006, 2007, and 2008 . .  
2009 . . . . . . . . . . . . .  
2010 and 2011 . . . . . . .  
2012 . . . . . . . . . . . . .  
2013 . . . . . . . . . . . . .  
2014 . . . . . . . . . . . . .  
2015 . . . . . . . . . . . . .  
2016 . . . . . . . . . . . . .  
2017 . . . . . . . . . . . . .  
2018 . . . . . . . . . . . . .  
2019 . . . . . . . . . . . . .  
2020 . . . . . . . . . . . . .  
2021 . . . . . . . . . . . . .  
involved in the termination but less than  
the entire trust, enter in column c only  
the amount attributable to the property  
involved in the termination. Determine  
this amount by multiplying the total  
expense times a fraction. The  
The value of a testamentary transfer  
numerator of the fraction is the value of  
the property involved in the termination  
and to which the expense relates. The  
denominator is the total value of the  
property to which the expense relates.  
is generally the estate tax value.  
For qualified terminable interest  
property (QTIP) that is included in the  
estate of the surviving spouse of the  
settlor because of section 2044, if the  
surviving spouse is considered the  
transferor under section 2652(a) for  
GST purposes, the value is the estate  
tax value in the estate of the surviving  
spouse.  
Schedule A (Lines 5–10)  
Line 7. Inclusion Ratio  
The trustee must figure the inclusion  
ratio for every termination. All  
A special QTIP election allows  
property for which a QTIP election was  
made for estate or gift tax purposes to  
be treated for GST tax purposes as if  
the QTIP election had not been made. If  
the special QTIP election has been  
made, the predeceased settlor spouse  
is the transferor and the value is that  
spouse's estate or gift tax value under  
the rules described above. The settlor  
spouse or the executor of the  
terminations, or any parts of a single  
termination, that have different inclusion  
ratios must be shown on separate  
Schedules A. Identify the separate  
trusts by Schedule A number when  
showing your inclusion ratio calculation.  
A valid Deceased Spousal  
Unused Exclusion Amount  
!
CAUTION  
("DSUE" or portability) election  
by an executor of a deceased spouse's  
estate does not apply to or impact GST  
tax exemption.  
The inclusion ratio is the excess of 1  
over the applicable fraction determined  
for the trust in which the termination  
occurred.  
Applicable fraction. The applicable  
fraction is a fraction, the numerator of  
which is the amount of the GST  
exemption. The denominator of the  
fraction is:  
For existing trusts, transferors may  
allocate the additional GST exemption  
amount attributable to indexing  
adjustments if they otherwise qualify  
under the existing rules for late  
allocations. For more information, see  
section 2632 and Multiple transfers,  
later.  
predeceased settlor spouse's estate  
must have made the special QTIP  
election.  
Transfers subject to an estate tax in-  
clusion period. If a transferor made an  
inter vivos transfer, and the property  
transferred would have been includible  
in the transferor's estate if he or she had  
died immediately after the transfer  
(other than by reason of the transferor  
dying within 3 years of making the gift),  
for purposes of determining the  
1. The value of the property  
Once made, allocations are  
transferred to the trust, minus  
irrevocable.  
2. The sum of:  
Allocation of the GST exemption is  
made by the settlor on Form 709 or on  
Form 706 by the executor of the settlor's  
estate. Therefore, you should obtain  
information regarding the allocation of  
the exemption to this trust from the  
settlor or the executor of the settlor's  
estate, as applicable.  
If the settlor's entire GST exemption  
is not allocated by the due date  
(including extensions) of the settlor's  
estate tax return, the exemption is  
automatically allocated to the settlor's  
generation-skipping transfers under the  
rules of section 2632.  
a. Any federal estate tax or state  
death tax actually recovered from the  
trust attributable to the property, and  
b. Any charitable deduction allowed  
under section 2055 or 2522 with respect  
to the property.  
inclusion ratio, an allocation of GST  
exemption will only become effective at  
the close of the estate tax inclusion  
period (ETIP).  
Round the applicable fraction to at  
least the nearest one-thousandth (for  
example, “.001”).  
The value of the property for the  
purpose of figuring the inclusion ratio is  
the estate tax value if the property is  
includible in the transferor's gross  
estate. Otherwise, the property is valued  
at the close of the ETIP, provided that  
the GST exemption is allocated on a  
timely filed gift tax return for the  
Numerator. GST exemption. Every  
individual settlor is allowed a lifetime  
GST exemption against property that  
the individual has transferred. For  
generation-skipping transfers made  
through 1998, the amount of the  
exemption was $1 million. The GST  
exemption amounts thereafter are as  
follows:  
Denominator. Valuation of trust as-  
sets. In general, for an inter vivos  
transfer, you should use the gift tax  
value in the denominator of the  
calendar year in which the ETIP closes.  
The ETIP closes at the earliest of:  
The time the transferred property  
would no longer be includible in the  
settlor's estate,  
applicable fraction as long as the  
allocation of the GST exemption was  
made on a timely filed gift tax return or  
The date of a generation-skipping  
transfer of the property, or  
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The date of death of the settlor.  
If the allocation is not made on a  
The adjusted GST exemption is the  
sum of:  
1. The exemption allocated to the  
trust, and  
2. Interest on the exemption  
determined at the interest rate used to  
figure the estate or gift deduction for the  
charitable lead annuity and for the  
actual period of the charitable lead  
annuity.  
After December 31, 2005,  
but before January 1,  
46%  
45%  
0%  
timely filed gift tax return, the property is  
valued at the time of the late allocation.  
2007 . . . . . . . . . . . . . .  
After December 31, 2006,  
but before January 1,  
2010 . . . . . . . . . . . . . .  
Multiple transfers. When a transfer is  
made to a pre-existing trust, the  
applicable fraction must be refigured.  
The numerator of the new fraction is the  
sum of:  
After December 31, 2009,  
but before January 1,  
2011 . . . . . . . . . . . . . .  
1. The exemption allocated to the  
current transfer, and  
In the case of a late allocation, the  
amount of interest accrued prior to the  
date of allocation is zero.  
After December 31, 2010,  
but before January 1,  
2013 . . . . . . . . . . . . . .  
35%  
40%  
2. The nontax portion of the trust  
immediately before the current transfer  
(the product of the applicable fraction  
and the value of all the property in the  
trust immediately before the current  
transfer).  
Line 8  
After December 31,  
2012 . . . . . . . . . . . . . .  
Enter, from the table below, the  
applicable tax rate at the time the  
generation-skipping transfer occurred.  
Part III—Tax Computation  
Line 9b  
If you have more than six Schedules A  
attached to this form, enter the total  
GST tax from all Schedules A in excess  
of six.  
The denominator of the new fraction  
is the sum of:  
Table of Maximum Tax Rates  
1. The value of the current transfer  
(minus any federal estate tax or state  
death tax actually paid by the trust  
attributable to such property and any  
charitable deduction allowed for such  
property), and  
2. The value (determined under the  
rules described above) of all property in  
the trust immediately before the current  
transfer.  
The  
If the generation-skipping maximum  
transfer occurred  
tax rate is  
After December 31, 2002,  
but before January 1,  
2004 . . . . . . . . . . . . . .  
49%  
Line 12  
Make checks payable to the “United  
States Treasury.” Please write the trust's  
EIN, the year of the transfer, and “Form  
706-GS(T)” on the check to ensure  
posting to the proper account. Enclose,  
but do not attach, the payment with  
Form 706-GS(T).  
After December 31, 2003,  
but before January 1,  
48%  
47%  
2005 . . . . . . . . . . . . . .  
To figure the inclusion ratio, use only  
the value of the total additions made to  
the trust after October 22, 1986.  
After December 31, 2004,  
but before January 1,  
2006 . . . . . . . . . . . . . .  
Charitable lead annuity trusts. For  
termination of an interest in a charitable  
lead annuity trust, the numerator of the  
applicable fraction is the adjusted GST  
exemption as defined below. The  
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 two  
or more checks, with each check made  
out for an amount less than $100  
million. The $100 million or more  
denominator is the value of the trust  
immediately after the termination of the  
charitable lead annuity interest.  
amount limit does not apply to other  
methods of payment (such as electronic  
payments), so please consider paying  
by means other than check.  
Paperwork Reduction Act Notice. We ask for the information on this form to carry out the Internal Revenue laws of the  
United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to  
allow us to figure and collect the right amount of tax.  
You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless  
the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long  
as their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return  
information are confidential, as required by section 6103.  
The time needed to complete and file this form will vary depending on individual circumstances. The average estimated time  
is:  
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Form  
Recordkeeping  
Learning about the law  
or the form  
Preparing the form  
Copying, assembling,  
and sending the form to  
the IRS  
706-GS(T)  
Schedule A  
Schedule B  
39 min.  
13 min.  
13 min.  
32 min.  
13 min.  
9 min.  
32 min.  
32 min.  
19 min.  
20 min.  
20 min.  
20 min.  
We welcome your comments about these instructions and your suggestions for future editions. You can send us comments  
through IRS.gov/FormComments. Or, you can write to the Internal Revenue Service, Tax Forms and Publications, 1111  
Constitution Ave. NW, IR-6526, Washington, DC 20224. Although we can't respond individually to each comment received, we  
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send tax questions, tax returns, or payments to the above address. Instead, see Where To File, earlier.  
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