Instructions For Form 706-Gs(D-1) (Page 2 of 6) in pdf

Instructions for

Department of the Treasury

Internal Revenue Service

Form 706-GS(D-1)

(Rev. March 2011)

Use with the October 2008 revision of Form 706-GS(D-1)

Notification of Distribution From a Generation-Skipping Trust

Department of the Treasury

amount of tax paid by the trust is also a

Section references are to the Internal

Internal Revenue Service

taxable distribution.

Revenue Code unless otherwise noted.

Cincinnati, OH 45999

A distribution is not considered a

General Instructions

taxable distribution if, had it been made

Trusts

while an individual was alive, it would

Nonexplicit trusts. An arrangement

have been a nontaxable gift because of

Purpose of Form

section 2503(e) (relating to transfers

that has substantially the same effect

as a trust will be treated as a trust even

made for certain educational or medical

A trustee uses Form 706-GS(D-1) to

though it is not an explicit trust.

expenses).

report certain distributions from a trust

Examples of such arrangements are

that are subject to the generation-

Also, a distribution (or any portion

insurance and annuity contracts,

skipping transfer (GST) tax and to

thereof) is not a taxable distribution to

arrangements involving life estates and

provide the skip person distributee with

the extent that:

remainders, and estates for years.

•

information needed to figure the tax

The property distributed was

due on the distribution.

previously subject to GST tax and

In general, a transfer of property in

•

The distributee in the prior

which the identity of the transferee is

Who Must File

distribution is assigned to a generation

conditioned on the occurrence of an

the same as or lower than the

event is a transfer in trust. However,

In general, the trustee of any trust that

distributee in the current distribution.

this rule does not apply to a

makes a taxable distribution must file a

testamentary trust if the event is to

Form 706-GS(D-1) for each skip

This rule does not apply if the

occur within 6 months of the

person. See Distributions Subject to

transfers have the effect of avoiding

transferor’s date of death.

GST Tax, below, for a discussion of

GST tax for any transfer.

what constitutes a taxable distribution.

Nonexplicit trusts do not include

Exceptions

The trustee must file a return for each

decedents’ estates.

skip person even if the inclusion ratio

Irrevocable trusts. The GST tax does

In the case of a nonexplicit trust, the

applicable to the distribution is zero.

not apply to any distribution from a trust

person in actual or constructive

See Column d. Inclusion Ratio.

that was irrevocable on September 25,

possession of the property involved is

1985. Any trust in existence on

considered the trustee and is liable for

When To File

September 25, 1985, will be considered

filing Form 706-GS(D-1).

irrevocable unless:

Generally, the trustee must file Copy A

If you are filing this return for a

•

On September 25, 1985, the value of

of Form 706-GS(D-1) with the IRS and

nonexplicit trust, see Line 2a. Trust’s

the trust could have been included in

send Copy B to the distributee by April

Employer Identification Number.

the settlor’s gross estate for federal

15th of the year following the calendar

Separate trusts. You must treat the

estate tax purposes by reason of

year when the distribution was made. If

following as separate trusts:

section 2038 if the settlor had died on

the due date falls on a Saturday,

•

Portions of a trust that are

September 25, 1985, or

Sunday, or legal holiday, file on the

attributable to transfers from different

•

Regarding a policy of life insurance

next business day.

transferors and

that is treated as a trust under section

•

Substantially separate and

However, for distributions made in

2652(b), the insured was an owner on

independent shares of different

2010, the due dates are modified as

September 25, 1985, and this would

beneficiaries in a trust.

follows:

have caused the insurance proceeds to

•

For distributions made between

be included in the insured’s gross

You must report such separate trusts

January 1, 2010, and December 16,

estate for federal estate tax purposes if

under different item numbers in column

2010, the due date for the Form

the insured had died on September 25,

a of line 3, even if they have the same

706-GS (D) will be September 19,

1985.

inclusion ratios.

2011. See Pub. L. 111-312, sec.

For more information, see

Distributions Subject to

301(d)(2).

Regulations section 26.2601-1(b).

•

For 2010 distributions made

GST Tax

Trusts containing qualified

December 17, 2010, or later, the due

terminable interest property. If an

date for the Form 706-GS (D) will be

In general, all taxable distributions are

irrevocable trust in existence on

April 18, 2011, due to the Emancipation

subject to the GST tax. A taxable

September 25, 1985, holds qualified

Day holiday in the District of Columbia.

distribution is any distribution from a

terminable interest property (QTIP) (as

See section 7503.

trust to a skip person (other than a

defined in section 2056(b)(7)) as a

taxable termination or a direct skip).

result of an election under section

Where To File

If any GST tax imposed on a

2056(b)(7) or 2523(f), the trust may

The trustee must send Copy A of Form

distribution is paid out of the trust from

elect to be treated for purposes of the

706-GS(D-1) to the following address:

which the distribution was made, the

GST tax as if the QTIP election had not

Cat. No. 10926L

Instructions For Form 706-Gs(D-1) Page 2

Related Articles

Related forms

Related Categories