Looking for a Form 706 Templates? Download it for free!

accumulated discount taken (that is,

made and decedents dying after

709 filed by the decedent and the

XX.XX%) on such interest.

December 31, 1981. List such property

decedent’s spouse to determine what

on Schedule F.

part of the total gift taxes reported on

If you answered “Yes” to line 10b for

them was attributable to gifts made

If this election was made and the

an interest in a limited liability company

within 3 years of death.

surviving spouse retained his or her

owned by the decedent at the time of

For example, if the decedent died on

interest in the QTIP property at death,

death, attach a statement that lists the

July 10, 2010, you should examine gift

the full value of the QTIP property is

item number from Schedule F and

tax returns for 2010, 2009, 2008, and

includible in his or her estate, even

identifies the effective discount taken

2007. However, the gift taxes on the

though the qualifying income interest

on such interest.

2007 return that are attributable to gifts

terminated at death. It is valued as of

made on or before July 10, 2007, are

the date of the surviving spouse’s

Example of effective discount:

not included in the gross estate.

death, or alternate valuation date, if

a Pro-rata value of limited liability

applicable. Do not reduce the value by

Attach an explanation of how you

company (before any

any annual exclusion that may have

computed the includible gift taxes if you

discounts)

$100.00

applied to the transfer creating the

do not include in the gross estate the

interest.

entire gift taxes shown on any Form

b Minus: 10% discounts for lack

709 filed for gifts made within 3 years of

The value of such property included

of control

(10.00)

death. Also attach copies of any

in the surviving spouse’s gross estate is

c Marketable minority interest

pertinent gift tax returns filed by the

treated as passing from the surviving

value (as if freely traded

decedent’s spouse for gifts made within

spouse. It therefore qualifies for the

minority interest value)

$90.00

3 years of death.

charitable and marital deductions on

2. Other transfers within 3 years

d Minus: 15% discount for lack of

the surviving spouse’s estate tax return

of death (section 2035(a)). These

marketability

(13.50)

if it meets the other requirements for

transfers include only the following:

those deductions.

e Non-marketable minority

•

Any transfer by the decedent with

For additional details, see

interest value

$76.50

respect to a life insurance policy within

Regulations section 20.2044-1.

3 years of death; or

Calculation of effective discount:

•

Schedule G—Transfers

Any transfer within 3 years of

death of a retained section 2036 life

(a minus e) divided by a = effective

During Decedent’s Life

estate, section 2037 reversionary

discount

interest, or section 2038 power to

Complete Schedule G and file it with

($100.00 - $76.50) ÷ $100.00 = 23.50%

revoke, etc., if the property subject to

the return if the decedent made any of

the life estate, interest, or power would

the transfers described in (1) through

Note. The amount of discounts are

have been included in the gross estate

(5) below, or if you answered “Yes” to

based on the factors pertaining to a

had the decedent continued to possess

question 11 or 12a of Part 4 — General

specific interest and those discounts

the life estate, interest, or power until

Information.

shown in the example are for

death.

Report the following types of

demonstration purposes only.

These transfers are reported on

transfers on this schedule:

Schedule G, regardless of whether a

If you answered “Yes” to line 10b for

gift tax return was required to be filed

any transfer(s) described in (1) through

IF. . .

AND . . .

THEN . . .

for them when they were made.

(5) in the Schedule G instructions (and

However, the amount includible and the

the decedent

at the time of

for purposes of

made by the decedent), attach a

information required to be shown for

made a transfer the transfer, the sections 2035

statement to Schedule G which lists

from a trust,

transfer was

and 2038, treat

the transfers are determined:

the item number from that schedule

from a portion

the transfer as

•

For insurance on the life of the

and identifies the total accumulated

of the trust that made directly

decedent using the instructions to

discount taken (that is, XX.XX%) on

was owned by

by the

Schedule D (attach Forms 712);

the grantor

decedent.

such transfer(s).

•

under section

For insurance on the life of

Line 1. If the decedent owned at the

676 (other than

another using the instructions to

date of death works of art or items with

by reason of

Schedule F (attach Forms 712); and

collectible value (for example, jewelry,

section 672(e))

•

For sections 2036, 2037, and

by reason of a

furs, silverware, books, statuary, vases,

2038 transfers, using paragraphs (3),

power in the

oriental rugs, coin or stamp collections),

grantor,

(4), and (5) of these instructions.

check the “Yes” box on line 1 and

Any such

3. Transfers with retained life

provide full details. If any item or

transfer within

estate (section 2036). These are

collection of similar items is valued at

the annual gift

transfers by the decedent in which the

tax exclusion is

more than $3,000, attach an appraisal

decedent retained an interest in the

not includible in

by an expert under oath and the

the gross

transferred property. The transfer can

required statement regarding the

estate.

be in trust or otherwise, but excludes

appraiser’s qualifications (see

bona fide sales for adequate and full

Regulations section 20.2031-6(b)).

consideration.

1. Certain gift taxes (section

Decedent Who Was a

2035(b)). Enter at item A of Schedule G

Interests or rights. Section 2036

the total value of the gift taxes that

applies to the following retained

Surviving Spouse

were paid by the decedent or the estate

interests or rights:

•

on gifts made by the decedent or the

The right to income from the

If the decedent was a surviving spouse,

decedent’s spouse within 3 years of

transferred property;

he or she may have received qualified

•

death.

The right to the possession or

terminable interest property (QTIP)

enjoyment of the property; and

from the predeceased spouse for which

The date of the gift, not the date of

•

the marital deduction was elected either

payment of the gift tax, determines

The right, either alone or with any

on the predeceased spouse’s estate

whether a gift tax paid is included in the

person, to designate the persons who

tax return or on a gift tax return, Form

gross estate under this rule. Therefore,

shall receive the income from, or

709. The election was available for gifts

you should carefully examine the Forms

possess or enjoy, the property.

-20-

Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2011 Page 20

Related Articles

Related forms

Related Categories