Form 706 (Draft) - United States Estate (And Generation-Skipping Transfer) Tax Return - 2016 Page 38
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55requires that all trustees be individuals
copy of the written disclaimer required
Election to Deduct Qualified Termi-
who are citizens of the United States or
by section 2518(b).
nable Interest Property Under Sec-
domestic corporations.
tion 2056(b)(7). If a trust (or other
Line 3
property) meets the requirements of
You make the QDOT election simply
Section 2056(b)(7)(C)(ii) creates an
qualified terminable interest property
by listing the qualified domestic trust or
automatic QTIP election for certain joint
under section 2056(b)(7), and
the entire value of the trust property on
and survivor annuities that are includible
Schedule M and deducting its value.
1. The trust or other property is
in the estate under section 2039. To
You are presumed to have made the
listed on Schedule M, and
qualify, only the surviving spouse can
DRAFT AS OF
QDOT election if you list the trust or
2. The value of the trust (or other
have the right to receive payments
trust property and insert its value on
property) is entered in whole or in part
before the death of the surviving
Schedule M. Once made, the election
as a deduction on Schedule M,
spouse.
is irrevocable.
then unless the executor specifically
The executor can elect out of QTIP
If an election is made to deduct
identifies the trust (all or a fractional
treatment, however, by checking the
qualified domestic trust property under
June 16, 2016
portion or percentage) or other property
“Yes,” box on line 3. Once made, the
section 2056A(d), provide the following
to be excluded from the election, the
election is irrevocable. If there is more
information for each qualified domestic
executor shall be deemed to have made
than one such joint and survivor annuity,
trust on an attachment to this schedule:
an election to have such trust (or other
you are not required to make the
1. The name and address of every
property) treated as qualified terminable
election for all of them.
trustee;
interest property under section 2056(b)
If you make the election out of QTIP
2. A description of each transfer
(7).
treatment by checking “Yes,” on line 3,
passing from the decedent that is the
If less than the entire value of the
you cannot deduct the amount of the
source of the property to be placed in
trust (or other property) that the
annuity on Schedule M. If you do not
trust; and
executor has included in the gross
elect out, you must list the joint and
3. The employer identification
estate is entered as a deduction on
survivor annuities on Schedule M.
number (EIN) for the trust.
Schedule M, the executor shall be
Listing Property Interests on
considered to have made an election
The election must be made for an
Schedule M
only as to a fraction of the trust (or other
entire QDOT trust. In listing a trust for
property). The numerator of this fraction
which you are making a QDOT election,
List each property interest included in
is equal to the amount of the trust (or
unless you specifically identify the
the gross estate that passes from the
other property) deducted on
trust as not subject to the election,
decedent to the surviving spouse and
Schedule M. The denominator is equal
the election will be considered made
for which a marital deduction is claimed.
to the total value of the trust (or other
for the entire trust.
This includes otherwise nondeductible
property).
terminable interest property for which
The determination of whether a trust
you are making a QTIP election.
Qualified Domestic Trust
qualifies as a QDOT will be made as of
Number each item in sequence and
the date the decedent's Form 706 is
Election (QDOT)
describe each item in detail. Describe
filed. If, however, judicial proceedings
The marital deduction is allowed for
the instrument (including any clause or
are brought before the Form 706's due
transfers to a surviving spouse who is
paragraph number) or provision of law
date (including extensions) to have the
not a U.S. citizen only if the property
under which each item passed to the
trust revised to meet the QDOT
passes to the surviving spouse in a
surviving spouse. Indicate the schedule
requirements, then the determination
qualified domestic trust (QDOT) or if
and item number of each asset.
will not be made until the court-ordered
such property is transferred or
changes to the trust are made.
In listing otherwise nondeductible
irrevocably assigned to a QDOT before
property for which you are making a
the decedent's estate tax return is filed.
Election to Deduct Qualified Domes-
QTIP election, unless you specifically
tic Trust Property Under Section
A QDOT is any trust:
identify a fractional portion of the trust or
2056A. If a trust meets the requirement
other property as not subject to the
of a qualified domestic trust under
1. That requires at least one trustee
election, the election will be considered
section 2056A(a), the return is filed no
to be either a citizen of the United
made for the entire interest.
later than 1 year after the time
States or a domestic corporation;
prescribed by law (including
2. That requires that no distribution
Enter the value of each interest
extensions), and the entire value of the
of corpus from the trust can be made
before taking into account the federal
trust or trust property is listed and
unless such a trustee has the right to
estate tax or any other death tax. The
entered as a deduction on Schedule M,
withhold from the distribution the tax
valuation dates used in determining the
then unless the executor specifically
imposed on the QDOT;
value of the gross estate apply also on
identifies the trust to be excluded from
Schedule M.
3. That meets the requirements of
the election, the executor shall be
any applicable regulations; and
deemed to have made an election to
If Schedule M includes a bequest of
4. For which the executor has made
have the entire trust treated as qualified
the residue or a part of the residue of
an election on the estate tax return of
domestic trust property.
the decedent's estate, attach a copy of
the decedent.
the computation showing how the value
Line 1
of the residue was determined. Include
Note. For trusts created by an
If property passes to the surviving
a statement showing:
instrument executed before November
spouse as the result of a qualified
The value of all property that is
5, 1990, paragraphs 1 and 2 above will
disclaimer, check “Yes,” and attach a
included in the decedent's gross estate
be treated as met if the trust instrument
(Schedules A through I) but is not a part
Part Instructions
-37-
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