Instructions For Form 706-Gs(D)
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1
2
3Instructions for
Department of the Treasury
Internal Revenue Service
Form 706-GS(D)
(Rev. November 2011)
Generation-Skipping Transfer Tax Return for Distributions
January 1 but not later than April 15
Section 6662 provides a penalty
Section references are to the Internal
Revenue Code unless otherwise noted.
of the year following the calendar
for underpayment of GST taxes which
year when the distributions were
exceeds $5,000, if the underpayment
What’s New
made.
is due to a valuation understatement.
•
File Form 706-GS(D) for 2011
A substantial valuation under-
However, for distributions made in
distributions by April 17, 2012. The
statement occurs when the reported
2011, the due date for Form
due date is April 17, instead of April
value of property listed on Form
706-GS(D) will be April 17, 2012,
15, because April 15 is a Sunday and
706-GS(D) is 65% or less of the
because April 15 is a Sunday and
April 16 is the Emancipation Day
actual value of the property. A gross
April 16 is the Emancipation Day
holiday in the District of Columbia.
valuation understatement occurs
holiday in the District of Columbia.
•
The IRS has created a page on
when the reported value of property
See section 7503.
IRS.gov for information about Form
listed on Form 706-GS(D) is 40% or
If you are not able to file the return
less of the actual value of the
706-GS(D) and its instructions, at
by the due date, you may request an
property.
Information
automatic 6-month extension of time
about any future developments (such
Interest will be charged on taxes
to file by filing Form 7004, Application
as legislation enacted after we
not paid by their due date, even if an
for Automatic Extension of Time To
release it) will be posted on that
extension of time to file is granted.
File Certain Business Income Tax,
page.
Interest is also charged on any
Information, and Other Returns. The
additions to tax imposed by section
extension is automatic, so you do not
6651 from the due date of the return
General Instructions
have to sign the form or provide a
(including any extensions) until the
reason for your request. You must file
addition to tax is paid.
Form 7004 on or before the regular
Purpose of Form
Return preparer. The Small
due date of Form 706-GS(D). See
Business and Work Opportunity Tax
Form 7004 for more information.
Form 706-GS(D) is used by a skip
Act of 2007 extended return preparer
person distributee to calculate and
Where To File
penalties to all tax return preparers.
report the tax due on distributions
Under section 6694 and its
from a trust that are subject to the
File Form 706-GS(D) at the following
regulations, tax return preparers, who
generation-skipping transfer (GST)
address:
prepare any return or claim for refund
tax.
which shows an understatement of
Department of the Treasury
Internal Revenue Service
tax liability due to willful or reckless
Who Must File
conduct, can be penalized $5,000 or
Cincinnati, OH 45999
In general, anyone who receives a
50% of the income earned (or income
taxable distribution from a trust must
Penalties and Interest
to be earned), whichever is greater,
file Form 706-GS(D). Trustees are
for each return.
Section 6651 provides penalties for
required to report taxable distributions
both late filing and late payment
Signature
to skip person distributees on Form
unless there is reasonable cause for
706-GS(D-1), Notification of
Either the distributee or an authorized
the delay. The law also provides
Distribution From a Generation-
representative must sign Form
penalties for willful attempts to evade
Skipping Trust.
706-GS(D).
payment of tax.
If you receive a Form 706-GS(D-1)
If you fill in your own return, leave
A return is late when it is filed after
and the inclusion ratio found on Part
the Paid Preparer Use Only space
the due date, including extensions.
II, line 3, column d, is zero for all
blank. If someone prepares your
The late filing penalty will not be
distributions, you do not need to file
return and does not charge you, that
imposed if the taxpayer can show that
Form 706-GS(D). If you are required
person should not sign the return.
the failure to file a timely return is due
to file Form 706-GS(D), you do not
to reasonable cause.
Generally, anyone who is paid to
have to include any distributions that
prepare the return must sign the
Reasonable Cause Determinations.
have an inclusion ratio of zero.
return in the space provided and fill in
If you receive a notice about penalties
the Paid Preparer Use Only area.
and interest after you file Form
When To File
See section 7701(a)(36)(B) for
706-GS(D), send us an explanation
exceptions.
The generation-skipping transfer tax
and we will determine if you meet
on distributions is figured and
reasonable cause criteria. Do not
In addition to signing and
reported on a calendar year basis,
attach an explanation when you file
completing the required information,
regardless of your income tax
Form 706-GS(D). Explanations
the paid preparer must give a copy of
accounting period. You, generally,
attached to the return at the time of
the completed return to the
must file Form 706-GS(D) on or after
filing will not be considered.
distributee.
Nov 14, 2011
Cat. No. 10828G
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