Form 706 (Draft) - United States Estate (And Generation-Skipping Transfer) Tax Return - 2016 Page 28
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55terminable interest property (QTIP) from
Any transfer within 3 years of death of
IF. . .
AND . . .
THEN . . .
the predeceased spouse for which the
a retained section 2036 life estate,
marital deduction was elected either on
section 2037 reversionary interest, or
the decedent
at the time of
for purposes
the predeceased spouse's estate tax
section 2038 power to revoke, etc., if
made a
the transfer,
of sections
return or on a gift tax return, Form 709.
transfer from a
the transfer
2035 and
the property subject to the life estate,
trust,
was from a
2038, treat the
The election is available for transfers
interest, or power would have been
portion of the
transfer as
made and decedents dying after
included in the gross estate had the
trust that was
made directly
December 31, 1981. List such property
decedent continued to possess the life
owned by the
by the
DRAFT AS OF
on Schedule F.
estate, interest, or power until death.
grantor under
decedent.
These transfers are reported on
section 676
If this election was made and the
(other than by
Schedule G, regardless of whether a gift
surviving spouse retained his or her
reason of
tax return was required to be filed for
interest in the QTIP property at death,
section
them when they were made. However,
the full value of the QTIP property is
672(e)) by
the amount includible and the
includible in his or her estate, even
reason of a
June 16, 2016
information required to be shown for the
though the qualifying income interest
power in the
transfers are determined:
terminated at death. It is valued as of
grantor,
For insurance on the life of the
the date of the surviving spouse's death,
Any such
decedent using the instructions to
or alternate valuation date, if applicable.
transfer within
Schedule D (attach Forms 712);
the annual gift
Do not reduce the value by any annual
tax exclusion
For insurance on the life of another
exclusion that may have applied to the
is not
using the instructions to Schedule F
transfer creating the interest.
includible in
(attach Forms 712); and
the gross
The value of such property included
For sections 2036, 2037, and 2038
estate.
in the surviving spouse's gross estate is
transfers, using paragraphs (3), (4), and
treated as passing from the surviving
(5) of these instructions.
spouse. It therefore qualifies for the
3. Transfers with retained life estate
charitable and marital deductions on the
1. Certain gift taxes (section
(section 2036). These are transfers by
surviving spouse's estate tax return if it
2035(b)). Enter at item A of Schedule G
the decedent in which the decedent
meets the other requirements for those
the total value of the gift taxes that were
retained an interest in the transferred
deductions.
paid by the decedent or the estate on
property. The transfer can be in trust or
gifts made by the decedent or the
For additional details, see
otherwise, but excludes bona fide sales
decedent's spouse within 3 years of
Regulations section 20.2044-1.
for adequate and full consideration.
death.
Interests or rights. Section 2036
Schedule G—Transfers
The date of the gift, not the date of
applies to the following retained
payment of the gift tax, determines
During Decedent's Life
interests or rights:
whether a gift tax paid is included in the
The right to income from the
gross estate under this rule. Therefore,
If any assets to which the
transferred property;
you should carefully examine the Forms
special rule of Regulations
!
The right to the possession or
709 filed by the decedent and the
section 20.2010-2(a)(7)(ii)
enjoyment of the property; and
CAUTION
decedent's spouse to determine what
applies are reported on this schedule,
The right, either alone or with any
part of the total gift taxes reported on
do not enter any value in the last three
person, to designate the persons who
them was attributable to gifts made
columns. See instructions for line 10 of
shall receive the income from, possess,
within 3 years of death.
Part 5–Recapitulation for information on
or enjoy, the property.
For example, if the decedent died on
how to estimate and report the value of
Retained annuity, unitrust, and
July 10, 2016, you should examine gift
these assets.
other income interests in trusts. If a
tax returns for 2016, 2015, 2014, and
Complete Schedule G and file it with
decedent transferred property into a
2013. However, the gift taxes on the
the return if the decedent made any of
trust and retained or reserved the right
2013 return that are attributable to gifts
the transfers described in (1) through (5)
to use the property, or the right to an
made on or before July 10, 2013, are
later, or if you answered “Yes,” to
annuity, unitrust, or other interest in
not included in the gross estate.
question 12 or 13a of Part 4—General
such trust for the property for
Explain how you figured the
Information.
decedent's life, any period not
includible gift taxes if the entire gift taxes
ascertainable without reference to the
Report the following types of
shown on any Form 709 filed for gifts
decedent's death, or for a period that
transfers on this schedule:
made within 3 years of death are not
does not, in fact, end before the
included in the gross estate. Also attach
decedent's death, then the decedent's
copies of any relevant gift tax returns
right to use the property or the retained
filed by the decedent's spouse for gifts
annuity, unitrust, or other interest
made within 3 years of death.
(whether payable from income and/or
2. Other transfers within 3 years
principal) is the retention of the
of death (section 2035(a)). These
possession or enjoyment of, or the right
transfers include only the following:
to the income from, the property for
Any transfer by the decedent with
purposes of section 2036. See
respect to a life insurance policy within 3
Regulations section 20.2036-1(c)(2).
years of death; or
Retained voting rights. Transfers
with a retained life estate also include
Part Instructions
-27-
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