Instructions For Form 706-Qdt (Page 2 of 6) in pdf

The QDOT may alternate between

Where To File

Supplemental

any of these arrangements provided

File Form 706-QDT at the following

Documents

that one of the arrangements is

address.

operative at any given time. The QDOT

You must attach a copy of the trust

may give the trustee the discretion to

Department of the Treasury

instrument to the first Form 706-QDT

use any one of the security

Internal Revenue Service Center

filed for the trust. You do not need to

arrangements, or may limit the trustee

Cincinnati, OH 45999

attach a copy of the trust to any

to using only one or two of the

subsequent filings of Form 706-QDT.

arrangements.

Paying the Tax

If you are filing the return due to the

Assets of $2 Million or Less

death of the surviving spouse, attach a

Generally, the QDOT estate tax is due

copy of the death certificate.

by April 15 of the year following the

If the estate tax value of the assets

passing to the QDOT is $2 million or

calendar year in which taxable

Penalties

less (determined without regard to any

distributions were made. However, if

the surviving spouse died during the

indebtedness), the trust instrument

Section 6651 provides penalties for

year or if the trust ceased to qualify as

must require that the trust meet at least

both late filing and for late payment

one of the following conditions at all

a QDOT during the year, the tax on

unless there is reasonable cause for

those events and on any taxable

times during the term of the QDOT.

the delay. The law also provides

•

distributions occurring during that

No more than 35% of the FMV of

penalties for willful attempts to evade

trust assets, determined annually on

calendar year is due within 9 months

payment of tax.

the last day of the taxable year of the

following the date of death or the failure

Section 6662 provides penalties for

to qualify.

trust, will consist of real property

underpayment of estate taxes which

located outside the United States.

•

If the QDOT qualifies, you may elect

exceed $5,000 that are attributable to

The trust will meet the requirements

under section 6166 to pay the tax in

valuation understatements. See

described above for QDOTs with assets

installments. You may make either a

sections 6662(g) and (h) for more

in excess of $2 million.

protective or final election by checking

details.

For this purpose, if more than one

“Yes” on line 3 of Part II — Elections by

QDOT is established for the benefit of

Return preparer. The Small Business

the Trustee/Designated Filer, and

the surviving spouse, the value of all of

and Work Opportunity Tax Act of 2007

attaching the required statements. See

(Act) extends the application of return

the QDOTs is aggregated in

the instructions under Line 3.

preparer penalties to preparers of

determining whether the $2 million

Installment payments on page 4 for

threshold is exceeded.

estate tax returns. Under section 6694,

additional information.

as amended by the Act, estate tax

Personal Residence

Make the check payable to “United

return preparers, who prepare any

States Treasury.” Write the surviving

return or claim for refund which reflects

For the purpose of (1) figuring the $2

spouse’s social security number (SSN)

an understatement of tax liability due to

million threshold, and (2) determining

(or individual taxpayer identification

willful or reckless conduct, are subject

the amount of any bond or letter of

number (ITIN), if applicable) and “Form

to a penalty of $5,000 or 50% of the

credit, the executor of the decedent’s

706-QDT” on the check to assist us in

income derived (or income to be

estate may elect to exclude up to

posting it to the proper account.

derived), whichever is greater, for the

$600,000 in the value of real property

preparation of each such return. See

that meets the following requirements.

•

section 6694; the regulations

Signature(s)

It is used by or held for the use of the

thereunder; and Ann. 2009-15, 2009-11

surviving spouse as a personal

If the trustee is filing the return and

I.R.B. 687 for more information.

residence.

there is more than one trustee listed, all

•

It is owned directly by the QDOT.

listed trustees must verify the return. All

•

Security for Payment of

It passed or was treated as passing

trustees are responsible for the return

to the QDOT under the rules for the

the Tax

as filed and are liable for penalties

marital deduction when the surviving

provided for erroneous or false returns.

spouse is not a U.S. citizen (section

Assets in Excess of $2

2056(d)(2)(B)).

The trustee/designated filer who files

Million

the return must, in every case, sign the

The $600,000 may include the value

declaration on page 1 under penalties

of any related furnishings.

If the estate tax value of the assets

of perjury. The trustee/designated filer

passing to the QDOT exceeds $2

Either election may have been made

may use Form 2848, Power of Attorney

million (determined without regard to

by the executor on the estate tax return

and Declaration of Representative, to

any indebtedness), the trust instrument

for the decedent’s estate. The election

authorize another person to act for him

must require that the trust meet at least

to exclude the personal residence

or her before the IRS.

one of the following conditions at all

amount from the amount of the bond or

times during the term of the QDOT.

letter of credit may also be made

Generally, anyone who is paid to

•

At least one U.S. trustee must be a

prospectively by the U.S. trustee by

prepare the return must sign the return

bank as defined in section 581.

attaching a statement to Form 706-QDT

in the space provided and fill in the

•

The U.S. trustee must furnish a bond

claiming the exclusion. This election,

Paid Preparer’s Use Only area. See

in favor of the IRS in an amount equal

whether made by the executor or by a

section 7701(a)(36)(B) for exceptions.

to 65% of the fair market value (FMV)

trustee, may be canceled by attaching

In addition to signing and completing

of the trust assets.

such a statement to Form 706-QDT.

•

the required information, the paid

The U.S. trustee must furnish an

Filing a Bond or Letter of

preparer must give a copy of the

irrevocable letter of credit issued by a

completed return to the trustee/

bank in an amount equal to 65% of the

Credit

designated filer.

FMV of the trust assets.

If the bond or letter of credit

Note. A paid preparer may sign

The trust instrument may also meet

arrangement is selected, the executor

original or amended returns by rubber

this requirement by specific reference

must have filed the bond or letter of

stamp, mechanical device, or computer

to the applicable paragraph of

credit with the Form 706 or 706-NA on

software program.

Regulations section 20.2056A-2(d).

which the QDOT election is made.

-2-

Instructions For Form 706-Qdt Page 2

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