Form 706 (Draft) - United States Estate (And Generation-Skipping Transfer) Tax Return - 2016 Page 32
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55The amount excluded cannot exceed
contributions under the plan toward the
approved plans described in
$100,000 unless either of the following
cost, no part of the value of the annuity,
paragraphs (a) through (h) earlier.
conditions is met:
subject to the $100,000 limitation (if
If any part of an annuity under a
applicable), is includible in the gross
On December 31, 1982, the
“plan” described in (a) through (h)
estate.
decedent was both a participant in the
earlier is receivable by the executor, it is
plan and in pay status (for example, had
If the decedent made a contribution
generally includible in the gross estate
received at least one benefit payment
under a plan described in (a) through (e)
to the extent that it is receivable by the
on or before December 31, 1982) and
above toward the cost, include in the
executor in that capacity. In general, the
DRAFT AS OF
the decedent irrevocably elected the
gross estate on this schedule that
annuity is receivable by the executor if it
form of the benefit before January 1,
proportion of the value of the annuity
is to be paid to the executor or if there is
1983, or
which the amount of the decedent's
an agreement (expressed or implied)
The decedent separated from service
contribution under the plan bears to the
that it will be applied by the beneficiary
before January 1, 1983, and did not
total amount of all contributions under
for the benefit of the estate (such as in
change the form of benefit before death.
the plan. The remaining value of the
discharge of the estate's liability for
June 16, 2016
annuity is excludable from the gross
death taxes or debts of the decedent,
estate subject to the $100,000 limitation
etc.) or that its distribution will be
Approved Plans
(if applicable). For the rules to
governed to any extent by the terms of
Approved plans may be separated into
determine whether the decedent made
the decedent's will or the laws of
two categories:
contributions to the plan, see
descent and distribution.
Pension, profit-sharing, stock bonus,
Regulations section 20.2039-1(c).
If data available to you does not
and other similar plans and
indicate whether the plan satisfies the
IRAs and retirement bonds. The
Individual retirement arrangements
requirements of section 401(a), 403(a),
following plans are approved plans for
(IRAs), and retirement bonds.
408(a), 408(b), or 409(a), you may
the exclusion rules:
obtain that information from the IRS
Different exclusion rules apply to the
f. An individual retirement account
office where the employer's principal
two categories of plans.
described in section 408(a),
place of business is located.
Pension, etc., plans. The following
g. An individual retirement annuity
Line A. Lump Sum Distribution
plans are approved plans for the
described in section 408(b), or
exclusion rules:
Election
h. A retirement bond described in
a. An employees' trust (or a contract
section 409(a) (before its repeal by P.L.
Note. The following rules have been
purchased by an employees' trust)
98-369).
repealed and apply only if the decedent:
forming part of a pension, stock bonus,
Exclusion rules for IRAs and
On December 31, 1984, was both a
or profit-sharing plan that met all the
retirement bonds. These plans are
participant in the plan and in pay status
requirements of section 401(a), either at
approved plans only if they provide for a
(for example, had received at least one
the time of the decedent's separation
series of substantially equal periodic
benefit payment on or before December
from employment (whether by death or
payments made to a beneficiary for life,
31, 1984) and had irrevocably elected
otherwise) or at the time of the
or over a period of at least 36 months
the form of the benefit before July 18,
termination of the plan (if earlier);
after the date of the decedent's death.
1984, or
b. A retirement annuity contract
Had separated from service before
Subject to the $100,000 limitation (if
purchased by the employer (but not by
January 1, 1985, and did not change the
applicable), if an annuity under a “plan”
an employees' trust) under a plan that,
form of benefit before death.
described in (f) through (h) above is
at the time of the decedent's separation
receivable by a beneficiary other than
Generally, the entire amount of any
from employment (by death or
the executor, the entire value of the
lump sum distribution is included in the
otherwise), or at the time of the
annuity is excludable from the gross
decedent's gross estate. However,
termination of the plan (if earlier), was a
estate even if the decedent made a
under this special rule, all or part of a
plan described in section 403(a);
contribution under the plan.
lump sum distribution from a qualified
c. A retirement annuity contract
(approved) plan will be excluded if the
However, if any payment to or for an
purchased for an employee by an
lump sum distribution is included in the
account or annuity described in
employer that is an organization
recipient's income for income tax
paragraph (f), (g), or (h) earlier was not
referred to in section 170(b)(1)(A)(ii) or
purposes.
allowable as an income tax deduction
(vi), or that is a religious organization
under section 219 (and was not a
If the decedent was born before
(other than a trust), and that is exempt
rollover contribution as described in
1936, the recipient may be eligible to
from tax under section 501(a);
section 2039(e) before its repeal by P.L.
elect special “10-year averaging” rules
d. Chapter 73 of Title 10 of the United
98-369), include in the gross estate on
(under repealed section 402(e)) and
States Code; or
this schedule that proportion of the
capital gain treatment (under repealed
e. A bond purchase plan described in
value of the annuity which the amount
section 402(a)(2)) in figuring the income
section 405 (before its repeal by P.L.
not allowable as a deduction under
tax on the distribution. For more
98-369, effective for obligations issued
section 219 and not a rollover
information, see Pub. 575, Pension and
after December 31, 1983).
contribution bears to the total amount
Annuity Income. If this option is
paid to or for such account or annuity.
available, the estate tax exclusion
Exclusion rules for pension, etc.,
For more information, see Regulations
cannot be claimed unless the recipient
plans. If an annuity under an approved
section 20.2039-5.
elects to forego the “10-year averaging”
plan described in (a) through (e) above
and capital gain treatment in figuring the
is receivable by a beneficiary other than
Rules applicable to all approved
income tax on the distribution. The
the executor and the decedent made no
plans. The following rules apply to all
recipient elects to forego this treatment
Part Instructions
-31-
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