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interest, and date to which the interest

expense was incurred by indicating the

A foreign government or its political

was paid before the decedent’s death.

schedule and item number where the

subdivision when the use of such property

property is included in the gross estate. If

is limited exclusively to charitable

Instructions for Schedule

you do not know the exact amount of the

purposes.

expense, you may deduct an estimate,

L. Net Losses During

For this purpose, certain Indian tribal

provided that the amount may be verified

governments are treated as states and

Administration and

with reasonable certainty and will be paid

transfers to them qualify as deductible

before the period of limitations for

Expenses Incurred in

charitable contributions. See Rev. Proc.

assessment (referred to above) expires.

2002-64, 2002-42 I.R.B. 717, as modified

Keep all vouchers and receipts for

Administering Property

and supplemented by subsequent

inspection by the Internal Revenue

Revenue Procedures, for a list of

Not Subject to Claims

Service.

qualifying Indian tribal governments.

You must complete Schedule L and file it

You may also claim a charitable

Instructions for Schedule

with the return if you claim deductions on

contribution deduction for a qualifying

either item 18 or item 19 of Part 5,

M. Bequests, etc., to

conservation easement granted after the

Recapitulation.

decedent’s death under the provisions of

Surviving Spouse (Marital

Net Losses During

section 2031(c)(9).

Administration

Deduction)

The charitable deduction is allowed for

You may deduct only those losses from

See the Form 706 itself for these

amounts that are transferred to charitable

thefts, fires, storms, shipwrecks, or other

instructions.

organizations as a result of either a

casualties that occurred during the

qualified disclaimer (see Line 2 —

settlement of the estate. You may deduct

Instructions for Schedule

Qualified Disclaimer, on page 19) or the

only the amount not reimbursed by

complete termination of a power to

O. Charitable, Public, and

insurance or otherwise.

consume, invade, or appropriate property

Describe in detail the loss sustained

for the benefit of an individual. It does not

Similar Gifts and Bequests

and the cause. If you received insurance

matter whether termination occurs

or other compensation for the loss, state

because of the death of the individual or

General

the amount collected. Identify the property

in any other way. The termination must

You must complete Schedule O and file it

for which you are claiming the loss by

occur within the period of time (including

with the return if you claim a deduction on

indicating the particular schedule and

extensions) for filing the decedent’s

item 21 of the Recapitulation.

item number where the property is

estate tax return and before the power

included in the gross estate.

has been exercised.

You can claim the charitable deduction

If you elect alternate valuation, do not

allowed under section 2055 for the value

The deduction is limited to the amount

deduct the amount by which you reduced

of property in the decedent’s gross estate

actually available for charitable uses.

the value of an item to include it in the

that was transferred by the decedent

Therefore, if under the terms of a will or

gross estate.

during life or by will to or for the use of

the provisions of local law, or for any

any of the following:

Do not deduct losses claimed as a

other reason, the federal estate tax, the

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The United States, a state, a political

deduction on a federal income tax return

federal GST tax, or any other estate,

subdivision of a state, or the District of

or depreciation in the value of securities

GST, succession, legacy, or inheritance

Columbia, for exclusively public purposes;

or other property.

tax is payable in whole or in part out of

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Any corporation or association

any bequest, legacy, or devise that would

Expenses Incurred in

organized and operated exclusively for

otherwise be allowed as a charitable

Administering Property Not

religious, charitable, scientific, literary, or

deduction, the amount you may deduct is

Subject to Claims

educational purposes, including the

the amount of the bequest, legacy, or

encouragement of art, or to foster national

devise reduced by the total amount of the

You may deduct expenses incurred in

or international amateur sports

taxes.

administering property that is included in

competition (but only if none of its

the gross estate but that is not subject to

If you elected to make installment

activities involve providing athletic

claims. You may only deduct these

payments of the estate tax, and the

facilities or equipment, unless the

expenses if they were paid before the

interest is payable out of property

organization is a qualified amateur sports

section 6501 period of limitations for

transferred to charity, you must reduce

organization) and the prevention of

assessment expired.

the charitable deduction by an estimate of

cruelty to children and animals, as long as

The expenses deductible on this

the maximum amount of interest that will

no part of the net earnings benefits any

schedule are usually expenses incurred in

be paid on the deferred tax.

private individual and no substantial

the administration of a trust established

activity is undertaken to carry on

For split-interest trusts (or pooled

by the decedent before death. They may

propaganda, or otherwise attempt to

income funds) enter in the “Amount”

also be incurred in the collection of other

influence legislation or participate in any

column the amount treated as passing to

assets or the transfer or clearance of title

political campaign on behalf of any

the charity. Do not enter the entire

to other property included in the

candidate for public office;

amount that passes to the trust (fund).

decedent’s gross estate for estate tax

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A trustee or a fraternal society, order or

purposes, but not included in the

If you are deducting the value of the

association operating under the lodge

decedent’s probate estate.

residue or a part of the residue passing to

system, if the transferred property is to be

charity under the decedent’s will, attach a

The expenses deductible on this

used exclusively for religious, charitable,

copy of the computation showing how you

schedule are limited to those that are the

scientific, literary, or educational

determined the value, including any

result of settling the decedent’s interest in

purposes, or for the prevention of cruelty

reduction for the taxes described above.

the property or of vesting good title to the

to children or animals, and no substantial

property in the beneficiaries. Expenses

activity is undertaken to carry on

Also include:

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incurred on behalf of the transferees

propaganda or otherwise attempt to

A statement that shows the values of

(except those described above) are not

influence legislation, or participate in any

all specific and general legacies or

deductible. Examples of deductible and

political campaign on behalf of any

devises for both charitable and

nondeductible expenses are provided in

candidate for public office;

noncharitable uses. For each legacy or

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Regulations section 20.2053-8.

Any veterans organization incorporated

devise, indicate the paragraph or section

List the names and addresses of the

by an Act of Congress or any of its

of the decedent’s will or codicil that

persons to whom each expense was

departments, local chapters, or posts, for

applies. (If legacies are made to each

payable and the nature of the expense.

which none of the net earnings benefits

member of a class (for example, $1,000

Identify the property for which the

any private individual; or

to each of the decedent’s employees),

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Instructions for Schedules

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2005 Page 18

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