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You may enter a transfer on Part 3

a separate computation in addition to

decedent, of the decedent’s spouse,

only if the will or trust instrument

completing Schedule U.

and of the parents of the decedent; and

directs, by specific reference, that the

the spouse of any lineal descendant. A

Use a copy of Schedule U as a

GST tax is not to be paid from the

legally adopted child of an individual is

worksheet for this separate

transferred property interests.

considered a child of the individual by

computation. Complete lines 4 through

blood.

Part 2, Line 3. Enter zero on this line

14 of the worksheet Schedule U.

unless the will or trust instrument

However, the value you use on lines 4,

Indirect Ownership of Land

specifies that the GST taxes will be

5, 7, and 10 of the worksheet is the

The qualified conservation easement

paid by property other than that

value for these items as of the date of

exclusion applies if the land is owned

constituting the transfer (as described

the contribution of the easement, not

indirectly through a partnership,

above). Enter on line 3 the total of the

the estate tax value. If the date of

corporation, or trust, if the decedent

GST taxes shown on Part 3 and

contribution and the estate tax values

owned (directly or indirectly) at least

Schedule(s) R-1 that are payable out of

are the same, you do not need to do a

30% of the entity. For the rules on

the property interests shown on Part 2,

separate computation.

determining ownership of an entity, see

line 1.

After completing the worksheet,

Ownership rules, below.

Part 2, Line 6. Do not enter more than

enter the amount from line 14 of the

Ownership rules. An interest in

the amount on line 5. Additional

worksheet on line 14 of Schedule U.

property owned, directly or indirectly, by

allocations may be made using Part 1.

Finish completing Schedule U by

or for a corporation, partnership, or trust

entering amounts on lines 4, 7, and 15

Part 3, Line 3. See the instructions to

is considered proportionately owned by

through 20, following the instructions

Part 2, line 3 above. Enter only the total

or for the entity’s shareholders,

below for those lines. At the top of

of the GST taxes shown on

partners, or beneficiaries. A person is

Schedule U, enter ‘‘worksheet

Schedule(s) R-1 that are payable out of

the beneficiary of a trust only if he or

attached.’’ Attach the worksheet to the

the property interests shown on Part 3,

she has a present interest in the trust.

return.

line 1.

For additional information, see the

Part 3, Line 6. See the instructions to

Under section 2031(c), you may

ownership rules in section 2057(e)(3).

Part 2, line 6 above.

elect to exclude a portion of the value

Qualified Conservation

of land that is subject to a qualified

How To Complete Schedule

Easement

conservation easement. You make the

R-1

election by filing Schedule U with all of

A qualified conservation easement is

the required information and excluding

one that would qualify as a qualified

Filing due date. Enter the due date of

the applicable value of the land that is

conservation contribution under section

Form 706. You must send the copies of

subject to the easement on Part

170(h). It must be a contribution:

Schedule R-1 to the fiduciary before

5 — Recapitulation, page 3, at item 11.

•

Of a qualified real property interest,

this date.

To elect the exclusion, you must

•

To a qualified organization, and

Line 4. Do not enter more than the

include on Schedule A, B, E, F, G, or H,

•

Exclusively for conservation

amount on line 3. If you wish to allocate

as appropriate, the decedent’s interest

purposes.

an additional GST exemption, you must

in the land that is subject to the

Qualified real property interest. A

use Schedule R, Part 1. Making an

exclusion. You must make the election

qualified real property interest is any of

entry on line 4 constitutes a Notice of

on a timely filed Form 706, including

the following:

Allocation of the decedent’s GST

extensions.

•

The entire interest of the donor, other

exemption to the trust.

The exclusion is the lesser of:

than a qualified mineral interest;

Line 6. If the property interests

•

The applicable percentage of the

•

A remainder interest; or

entered on line 1 will not bear the GST

value of land (after certain reductions)

•

A restriction granted in perpetuity on

tax, multiply line 6 by 0% (-0-).

subject to a qualified conservation

the use that may be made of the real

Signature. The executor(s) must sign

easement or

property. The restriction must include a

•

Schedule R-1 in the same manner as

$500,000.

prohibition on more than a de minimis

Form 706. See Signature and

Once made, the election is

use for commercial recreational activity.

Verification, above.

irrevocable.

Qualified organization. A qualified

Filing Schedule R-1. Attach to Form

organization includes:

General Requirements

706 one copy of each Schedule R-1

•

Corporations and any community

that you prepare. Send two copies of

chest, fund, or foundation, organized

Qualified Land

each Schedule R-1 to the fiduciary.

and operated exclusively for religious,

Land may qualify for the exclusion if all

Note. If the estate elected modified

charitable, scientific, testing for public

of the following requirements are met:

carryover basis treatment on Form

safety, literary, or educational

•

The decedent or a member of the

8939, DO NOT attach this schedule to

purposes, or to foster national or

decedent’s family must have owned the

the return to allocate GST exemption.

international amateur sports

land for the 3-year period ending on the

Instead, use Form 8939’s Schedule

competition, or for the prevention of

date of the decedent’s death.

R-1.

cruelty to children or animals, without

•

No later than the date the election is

net earnings benefitting any individual

made, a qualified conservation

Schedule U—Qualified

shareholder and without activity with

easement on the land has been made

the purpose of influencing legislation or

Conservation Easement

by the decedent, a member of the

political campaigning, which

decedent’s family, the executor of the

Exclusion

a. Receives more than one-third of

decedent’s estate, or the trustee of a

its support from gifts, contributions,

trust that holds the land.

membership fees, or receipts from

•

If at the time of the contribution

The land is located in the United

sales, admissions fees, or performance

of the conservation easement,

States or one of its possessions.

of services, or

the value of the easement, the

CAUTION

Member of Family

value of the land subject to the

b. Is controlled by such an

easement, or the value of any retained

Members of the decedent’s family

organization.

•

development right was different than

include the decedent’s spouse;

Any entity that qualifies under section

the estate tax value, you must complete

ancestors; lineal descendants of the

170(b)(1)(A)(v) or (vi).

-38-

Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2011 Page 38

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