Form 706 (Draft) - United States Estate (And Generation-Skipping Transfer) Tax Return - 2016 Page 22
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55special-use value) causes any of these
other incompetency, or due to death
Does the notice of election
taxes and charges to increase, enter the
before the election under section 2032A
include the FMV of the real
increased amount (only) on these lines
is timely exercised, a representative
property to be specially valued
and attach an explanation of the
authorized by local law to bind the
and also include its value based
increase. Otherwise, enter -0-.
person in an agreement of this nature
on the qualified use (determined
may sign the agreement on his or her
Schedule R, Parts 2 and 3,
without the adjustments provided
behalf.
line 6—GST exemption allocation. If you
in section 2032A(b)(3)(B))?
completed Schedule R, Part 1, line 10,
The IRS will contact the agent
DRAFT AS OF
enter on line 6 the amount shown for the
designated in the agreement on all
Does the notice of election
skip person on the line 10 special-use
matters relating to continued
allocation schedule you attached to
include the adjusted value (as
qualification under section 2032A of the
Schedule R. If you did not complete
defined in section 2032A(b)(3)
specially valued real property and on all
Schedule R, Part 1, line 10, enter -0- on
(B)) of (a) all real property that
matters relating to the special lien
line 6.
both passes from the decedent
arising under section 6324B. It is the
June 16, 2016
Total GST tax savings. For each skip
and is used in a qualified use,
duty of the agent as attorney-in-fact for
person, subtract the tax amount on
without regard to whether it is to
the parties with interests in the specially
line 10, Part 2 of the special-use value
be specially valued, and (b) all
valued property to furnish the IRS with
worksheet from the tax amount on
any requested information and to notify
real property to be specially
line 10, Part 2 of the fair market value
the IRS of any disposition or cessation
valued?
worksheet. This difference is the skip
of qualified use of any part of the
person's total GST tax savings.
property.
Does the notice of election
Part 3. Agreement to Special
Checklist for Section 2032A
include (a) the items of personal
Valuation Under Section 2032A
property shown on the estate tax
Election
return that pass from the
The agreement to special valuation is
When making the special-use
required under sections 2032A(a)(1)(B)
decedent to a qualified heir and
valuation election on
!
and (d)(2) and must be signed by all
that are used in qualified use and
Schedule A-1, please use this
parties who have any interest in the
(b) the total value of such
CAUTION
checklist to ensure that you are
property being valued based on its
personal property adjusted under
providing everything necessary to make
qualified use as of the date of the
section 2032A(b)(3)(B)?
a valid election.
decedent's death.
To have a valid special-use valuation
An interest in property is an interest
Does the notice of election
election under section 2032A, you must
that, as of the date of the decedent's
include the adjusted value of the
file, in addition to the federal estate tax
death, can be asserted under applicable
gross estate? (See section
return, (a) a notice of election
law so as to affect the disposition of the
2032A(b)(3)(A).)
(Schedule A-1, Part 2), and (b) a fully
specially valued property by the estate.
executed agreement (Schedule A-1,
Any person who at the decedent's death
Part 3). You must include certain
Does the notice of election
has any such interest in the property,
information in the notice of election. To
include the method used to
whether present, future, vested, or
ensure that the notice of election
determine the special-use value?
contingent, must enter into the
includes all of the information required
agreement. Included are owners of
for a valid election, use the following
remainder and executory interests; the
Does the notice of election
checklist. The checklist is for your use
holders of general or special powers of
include copies of written
only. Do not file it with the return.
appointment; beneficiaries of a gift over
appraisals of the FMV of the real
in default of exercise of any such power;
property?
joint tenants and holders of similar
Does the notice of election
undivided interests when the decedent
Does the notice of election
include the decedent's name and
held only a joint or undivided interest in
include a statement that the
social security number as they
the property or when only an undivided
decedent and/or a member of his
interest is specially valued; and trustees
appear on the estate tax return?
of trusts and representatives of other
or her family has owned all of the
entities holding title to or any interests in
specially valued property for at
Does the notice of election
the property. An heir who has the power
least 5 years of the 8 years
include the relevant qualified use
under local law to challenge a will and
immediately preceding the date
of the property to be specially
thereby affect disposition of the property
of the decedent's death?
valued?
is not, however, considered to be a
person with an interest in property under
Does the notice of election
section 2032A solely by reason of that
describe the items of real
right. Likewise, creditors of an estate
are not such persons solely by reason of
property shown on the estate tax
their status as creditors.
return that are to be specially
valued and identify the property
If any person required to enter into
by the Form 706 schedule and
the agreement either desires that an
item number?
agent act for him or her or cannot legally
bind himself or herself due to infancy or
Part Instructions
-21-
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