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beneficiary as the result of a qualified

Under the statute, the credit is

Situated in that country,

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disclaimer, check the “Yes” box on line

authorized for all death taxes (national

Subjected to these taxes, and

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2 and attach a copy of the written

and local) imposed in the foreign

Included in the gross estate.

disclaimer required by section 2518(b).

country. Whether local taxes are the

The amount entered at item 1 should

basis for a credit under a treaty

not include any tax paid to the foreign

Attachments

depends upon the provisions of the

country for property not situated in that

particular treaty.

country and should not include any tax

If the charitable transfer was made by

paid to the foreign country for property

will, attach a certified copy of the order

If a credit for death taxes paid in

not included in the gross estate. If only

admitting the will to probate, in addition

more than one foreign country is

a part of the property subjected to

to the copy of the will. If the charitable

allowable, a separate computation of

foreign taxes is both situated in the

transfer was made by any other written

the credit must be made for each

foreign country and included in the

instrument, attach a copy. If the

foreign country. The copies of Schedule

gross estate, it will be necessary to

instrument is of record, the copy should

P on which the additional computations

determine the portion of the taxes

be certified; if not, the copy should be

are made should be attached to the

attributable to that part of the property.

verified.

copy of Schedule P provided in the

Also, attach the computation of the

return.

Value

amount entered at item 1.

The total credit allowable for any

The valuation dates used in

Item 2. Enter the value of the gross

property, whether subjected to tax by

determining the value of the gross

estate, less the total of the deductions

one or more than one foreign country,

estate apply also on Schedule O.

on items 20 and 21 of Part

is limited to the amount of the federal

5 — Recapitulation.

estate tax attributable to the property.

Schedule P—Credit for

The anticipated amount of the credit

Item 3. Enter the value of the property

may be computed on the return, but the

Foreign Death Taxes

situated in the foreign country that is

credit cannot finally be allowed until the

subjected to the foreign taxes and

foreign tax has been paid and a Form

included in the gross estate, less those

General

706-CE evidencing payment is filed.

portions of the deductions taken on

If you claim a credit on line 13 of Part

Section 2014(g) provides that for

Schedules M and O that are

2 — Tax Computation, you must

credits for foreign death taxes, each

attributable to the property.

complete Schedule P and file it with the

U.S. possession is deemed a foreign

Item 4. Subtract any credit claimed on

return. You must attach Form(s)

country.

line 15 for federal gift taxes on

706-CE to support any credit you claim.

Convert death taxes paid to the

pre-1977 gifts (section 2012) from line

foreign country into U.S. dollars by

If the foreign government refuses to

12 of Part 2 — Tax Computation, and

using the rate of exchange in effect at

certify Form 706-CE, you must file it

enter the balance at item 4 of

directly with the IRS as instructed on

the time each payment of foreign tax is

Schedule P.

made.

the Form 706-CE. See Form 706-CE

for instructions on how to complete the

If a credit is claimed for any foreign

Credit Under Treaties

form and for a description of the items

death tax that is later recovered, see

If you are reporting any items on this

that must be attached to the form when

Regulations section 20.2016-1 for the

return based on the provisions of a

the foreign government refuses to

notice required within 30 days.

death tax treaty, you may have to

certify it.

Limitation Period

attach a statement to this return

The credit for foreign death taxes is

disclosing the return position that is

The credit for foreign death taxes is

allowable only if the decedent was a

treaty based. See Regulations section

limited to those taxes that were actually

citizen or resident of the United States.

301.6114-1 for details.

paid and for which a credit was claimed

However, see section 2053(d) and the

within the later of the 4 years after the

In general. If the provisions of a treaty

related regulations for exceptions and

filing of the estate tax return, or before

apply to the estate of a U.S. citizen or

limitations if the executor has elected,

the date of expiration of any extension

resident, a credit is authorized for

in certain cases, to deduct these taxes

of time for payment of the federal

payment of the foreign death tax or

from the value of the gross estate. For

estate tax, or 60 days after a final

taxes specified in the treaty. Treaties

a resident, not a citizen, who was a

decision of the Tax Court on a timely

with death tax conventions are in effect

citizen or subject of a foreign country

filed petition for a redetermination of a

with the following countries: Australia,

for which the President has issued a

deficiency.

Austria, Canada, Denmark, Finland,

proclamation under section 2014(h), the

France, Germany, Greece, Ireland,

credit is allowable only if the country of

Credit Under the Statute

Italy, Japan, Netherlands, Norway,

which the decedent was a national

For the credit allowed by the statute,

South Africa, Switzerland, and the

allows a similar credit to decedents who

the question of whether particular

United Kingdom.

were U.S. citizens residing in that

property is situated in the foreign

country.

A credit claimed under a treaty is in

country imposing the tax is determined

The credit is authorized either by

general computed on Schedule P in the

by the same principles that would apply

statute or by treaty. If a credit is

same manner as the credit is computed

in determining whether similar property

authorized by a treaty, whichever of the

under the statute with the following

of a nonresident not a U.S. citizen is

following is the most beneficial to the

principal exceptions:

situated within the United States for

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estate is allowed:

The situs rules contained in the treaty

purposes of the federal estate tax. See

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The credit computed under the

apply in determining whether property

the instructions for Form 706-NA.

treaty;

was situated in the foreign country;

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Computation of Credit Under

The credit computed under the

The credit may be allowed only for

statute; or

payment of the death tax or taxes

the Statute

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The credit computed under the

specified in the treaty (but see the

Item 1. Enter the amount of the estate,

treaty, plus the credit computed under

instructions above for credit under the

the statute for death taxes paid to each

inheritance, legacy, and succession

statute for death taxes paid to each

political subdivision or possession of

taxes paid to the foreign country and its

political subdivision or possession of

the treaty country that are not directly

possessions or political subdivisions,

the treaty country that are not directly

or indirectly creditable under the treaty.

attributable to property that is:

or indirectly creditable under the treaty);

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Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2011 Page 31

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