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If specifically provided, the credit is

before computing the credit on

that elapsed between dates of death. It

proportionately shared for the tax

Schedule Q from Form 706.

is determined using the following table:

applicable to property situated outside

Section 2056(d)(3) contains specific

Period of

both countries, or that was deemed in

rules for allowing a credit for certain

Time

Not

Percent

some instances situated within both

transfers to a spouse who was not a

Exceeding

Allowable

countries; and

U.S. citizen where the property passed

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The amount entered at item 4 of

- - - - -

2 years

100

outright to the spouse, or to a qualified

Schedule P is the amount shown on

2 years

4 years

domestic trust.

line 12 of Part 2 — Tax Computation,

4 years

6 years

less the total of the credits claimed for

Property

6 years

8 years

federal gift taxes on pre-1977 gifts

8 years

10 years

The term “property” includes any

(section 2012) and for tax on prior

10 years

- - - - -

none

interest (legal or equitable) of which the

transfers (line 14 of Part 2 — Tax

transferee received the beneficial

Computation). (If a credit is claimed for

How To Compute the Credit

ownership. The transferee is

tax on prior transfers, it will be

considered the beneficial owner of

necessary to complete Schedule Q

A worksheet for Schedule Q is provided

property over which the transferee

before completing Schedule P.) For

to allow you to compute the limits

received a general power of

examples of computation of credits

before completing Schedule Q.

appointment. Property does not include

under the treaties, see the applicable

Transfer the appropriate amounts from

interests to which the transferee

regulations.

the worksheet to Schedule Q as

received only a bare legal title, such as

indicated on the schedule. You do not

Computation of credit in cases

that of a trustee. Neither does it include

need to file the worksheet with your

where property is situated outside

an interest in property over which the

Form 706, but you should keep it for

both countries or deemed situated

transferee received a power of

your records.

within both countries. See the

appointment that is not a general power

Cases involving transfers from two

appropriate treaty for details.

of appointment. In addition to interests

or more transferors. Part I of the

in which the transferee received the

worksheet and Schedule Q enable you

Schedule Q—Credit for

complete ownership, the credit may be

to compute the credit for as many as

allowed for annuities, life estates, terms

Tax on Prior Transfers

three transferors. The number of

for years, remainder interests (whether

transferors is irrelevant to Part II of the

contingent or vested), and any other

worksheet. If you are computing the

General

interest that is less than the complete

credit for more than three transferors,

ownership of the property, to the extent

You must complete Schedule Q and file

use more than one worksheet and

that the transferee became the

it with the return if you claim a credit on

Schedule Q, Part I, and combine the

beneficial owner of the interest.

Part 2 — Tax Computation, line 14.

totals for the appropriate lines.

Maximum Amount of the

The term “transferee” means the

Section 2032A additional tax. If the

transferor’s estate elected special-use

decedent for whose estate this return is

Credit

filed. If the transferee received property

valuation and the additional estate tax

The maximum amount of the credit is

from a transferor who died within 10

of section 2032A(c) was imposed at

the smaller of:

years before, or 2 years after, the

any time up to 2 years after the death

1. The amount of the estate tax of

transferee, a credit is allowable on this

of the decedent for whom you are filing

the transferor’s estate attributable to the

this return, check the box on Schedule

return for all or part of the federal estate

transferred property or

tax paid by the transferor’s estate for

Q. On lines 1 and 9 of the worksheet,

2. The amount by which:

the transfer. There is no requirement

include the property subject to the

a. An estate tax on the transferee’s

additional estate tax at its FMV rather

that the property be identified in the

estate determined without the credit for

estate of the transferee or that it exist

than its special-use value. On line 10 of

tax on prior transfers exceeds

on the date of the transferee’s death. It

the worksheet, include the additional

b. An estate tax on the transferee’s

estate tax paid as a federal estate tax

is sufficient for the allowance of the

estate determined by excluding from

credit that the transfer of the property

paid.

the gross estate the net value of the

was subjected to federal estate tax in

How To Complete the

transfer.

the estate of the transferor and that the

Schedule Q Worksheet

specified period of time has not

If credit for a particular foreign death

elapsed. A credit may be allowed for

tax may be taken under either the

Most of the information to complete

property received as the result of the

statute or a death duty convention, and

Part I of the worksheet should be

exercise or nonexercise of a power of

on this return the credit actually is taken

obtained from the transferor’s Form

appointment when the property is

under the convention, then no credit for

706.

included in the gross estate of the

that foreign death tax may be taken into

Line 5. Enter on line 5 the applicable

donee of the power.

consideration in computing estate tax

marital deduction claimed for the

(a) or estate tax (b), above.

If the transferee was the transferor’s

transferor’s estate (from the transferor’s

surviving spouse, no credit is allowed

Form 706).

Percent Allowable

for property received from the transferor

Lines 10 through 18. Enter on these

to the extent that a marital deduction

Where transferee predeceased the

lines the appropriate taxes paid by the

was allowed to the transferor’s estate

transferor. If not more than 2 years

transferor’s estate.

for the property. There is no credit for

elapsed between the dates of death,

If the transferor’s estate elected to

tax on prior transfers for federal gift

the credit allowed is 100% of the

pay the federal estate tax in

taxes paid in connection with the

maximum amount. If more than 2 years

installments, enter on line 10 only the

transfer of the property to the

elapsed between the dates of death, no

total of the installments that have

transferee.

credit is allowed.

actually been paid at the time you file

If you are claiming a credit for tax on

Where transferor predeceased the

this Form 706. See Revenue Ruling

transferee. The percent of the

prior transfers on Form 706-NA, you

83-15, 1983-1 C.B. 224, for more

should first complete and attach Part

maximum amount that is allowed as a

details. Do not include as estate tax

5 — Recapitulation from Form 706

credit depends on the number of years

any tax attributable to section 4980A,

-32-

Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2011 Page 32

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