Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2005 Page 26
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30easement was different at the time the
$100,000 and $10,000 was received in
indebtedness on the land at the date of
easement was contributed than at the
consideration for the easement. If the
the decedent’s death. Acquisition
date of death, see the Caution at the
easement was worth $150,000 at the date
indebtedness includes the unpaid amount
beginning of the Schedule U instructions.
of death, you must reduce the value of
of:
•
the easement by $15,000 ($10,000/
Any indebtedness incurred by the
Explain how this value was determined
$100,000 × $150,000) and report the
donor in acquiring the property;
and attach copies of any appraisals.
•
value of the easement on line 10 as
Any indebtedness incurred before the
Normally, the appropriate way to value a
$135,000.
acquisition if the indebtedness would not
conservation easement is to determine
have been incurred but for the acquisition;
the FMV of the land both before and after
Line 15
•
Any indebtedness incurred after the
the granting of the easement, with the
If a charitable contribution deduction for
acquisition if the indebtedness would not
difference being the value of the
this land has been taken on Schedule O,
have been incurred but for the acquisition
easement.
enter the amount of the deduction here. If
and the incurrence of the indebtedness
You must reduce the reported value of
the easement was granted after the
was reasonably foreseeable at the time of
the easement by the amount of any
decedent’s death, a contribution
the acquisition; and
consideration received for the easement.
•
deduction may be taken on Schedule O, if
The extension, renewal, or refinancing
If the date of death value of the easement
it otherwise qualifies, as long as no
of acquisition indebtedness.
is different from the value at the time the
income tax deduction was or will be
consideration was received, you must
claimed for the contribution by any person
Continuation Schedule
reduce the value of the easement by the
or entity.
See instructions for Continuation
same proportion that the consideration
Line 16
Schedule on Form 706 itself.
received bears to the value of the
You must reduce the value of the land by
easement at the time it was granted. For
the amount of any acquisition
example, assume the value of the
easement at the time it was granted was
-26-
Instructions for Schedules
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