Form 706 (Draft) - United States Estate (And Generation-Skipping Transfer) Tax Return - 2016 Page 31
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55described in paragraphs (a) through (h)
fixed by contract or subject to an option
Part Includible
of Annuities Under Approved Plans,
or election exercised or exercisable by
If the decedent contributed only part of
even if the annuities are wholly or
the decedent. However, see Annuities
the purchase price of the contract or
partially excluded from the gross estate.
Under Approved Plans, later.
agreement, include in the gross estate
4. A contract or agreement entered
For a discussion regarding the QTIP
only that part of the value of the annuity
into by the decedent and the decedent's
treatment of certain joint and survivor
receivable by the surviving beneficiary
employer under which at the decedent's
annuities, see the Schedule M, line 3
that the decedent's contribution to the
death, before retirement, or before the
instructions.
purchase price of the annuity or
DRAFT AS OF
expiration of a stated period of time, an
agreement bears to the total purchase
General
annuity was payable to a designated
price.
These rules apply to all types of
beneficiary, if surviving the decedent.
annuities, including pension plans,
However, see Annuities Under
For example, if the value of the
individual retirement arrangements,
Approved Plans, later.
survivor's annuity was $20,000 and the
purchased commercial annuities, and
decedent had contributed three-fourths
5. A contract or agreement under
June 16, 2016
private annuities.
of the purchase price of the contract, the
which the decedent immediately before
amount includible is $15,000 (
×
death was receiving, or was entitled to
In general, you must include in the
3
4
$20,000).
receive, an annuity for a stated period of
gross estate all or part of the value of
time, with the annuity to continue to a
any annuity that meets the following
Except as provided under Annuities
designated beneficiary, surviving the
requirements:
Under Approved Plans, contributions
decedent, upon the decedent's death
It is receivable by a beneficiary
made by the decedent's employer to the
and before the expiration of that period
following the death of the decedent and
purchase price of the contract or
of time.
by reason of surviving the decedent;
agreement are considered made by the
The annuity is under a contract or
6. An annuity contract or other
decedent if they were made by the
agreement entered into after March 3,
arrangement providing for a series of
employer because of the decedent's
1931;
substantially equal periodic payments to
employment. For more information, see
The annuity was payable to the
be made to a beneficiary for life or over
section 2039(b).
decedent (or the decedent possessed
a period of at least 36 months after the
the right to receive the annuity) either
date of the decedent's death under an
Definitions
alone or in conjunction with another, for
individual retirement account, annuity,
the decedent's life or for any period not
or bond as described in section 2039(e)
Annuity. An annuity consists of one or
ascertainable without reference to the
(before its repeal by P.L. 98-369).
more payments extending over any
decedent's death or for any period that
period of time. The payments may be
Payable to the decedent. An annuity
did not in fact end before the decedent's
equal or unequal, conditional or
or other payment was payable to the
death; and
unconditional, periodic or sporadic.
decedent if, at the time of death, the
The contract or agreement is not a
decedent was in fact receiving an
policy of insurance on the life of the
Examples. The following are
annuity or other payment, with or
decedent.
examples of contracts (but not
without an enforceable right to have the
necessarily the only forms of contracts)
Note. A private annuity is an annuity
payments continued.
for annuities that must be included in the
issued by a party not engaged in the
gross estate:
Right to receive an annuity. The
business of writing annuity contracts,
decedent had the right to receive an
1. A contract under which the
typically a junior generation family
annuity or other payment if, immediately
decedent immediately before death was
member or a family trust.
before death, the decedent had an
receiving or was entitled to receive, for
An annuity contract that provides
enforceable right to receive payments at
the duration of life, an annuity with
periodic payments to a person for life
some time in the future, whether or not
payments to continue after death to a
and ceases at the person's death is not
at the time of death the decedent had a
designated beneficiary, if surviving the
includible in the gross estate. Social
present right to receive payments.
decedent.
security benefits are not includible in the
2. A contract under which the
Annuities Under Approved
gross estate even if the surviving
decedent immediately before death was
Plans
spouse receives benefits.
receiving or was entitled to receive,
The following rules relate to whether
An annuity or other payment that is
together with another person, an annuity
part or all of an otherwise includible
not includible in the decedent's or the
payable to the decedent and the other
annuity may be excluded. These rules
survivor's gross estate as an annuity
person for their joint lives, with
have been repealed and apply only if
may still be includible under some other
payments to continue to the survivor
the decedent either:
applicable provision of the law. For
following the death of either.
On December 31, 1984, was both a
example, see Powers of Appointment
3. A contract or agreement entered
participant in the plan and in pay status
and the instructions for
into by the decedent and employer
(for example, had received at least one
Schedule G—Transfers During
under which the decedent immediately
benefit payment on or before December
Decedent's Life, earlier. See also
before death and following retirement
31, 1984) and had irrevocably elected
Regulations section 20.2039-1(e).
was receiving, or was entitled to
the form of the benefit before July 18,
If the decedent retired before
receive, an annuity payable to the
1984, or
January 1, 1985, see Annuities Under
decedent for life. After the decedent's
Had separated from service before
Approved Plans, later, for rules that
death, if survived by a designated
January 1, 1985, and did not change the
allow the exclusion of part or all of
beneficiary, the annuity was payable to
form of benefit before death.
certain annuities.
the beneficiary with payments either
-30-
Part Instructions
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