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Line 15—Total Credits

Unless you elect at the time you file

Interest. Interest accrued to the date

the return to adopt alternate valuation as

of the decedent’s death on bonds, notes,

Generally, line 15 is used to report the

authorized by section 2032, you must

and other interest-bearing obligations is

total of credit for foreign death taxes (line

value all property included in the gross

property of the gross estate on the date of

13) and credit for tax on prior transfers

estate on the date of the decedent’s

death and is included in the alternate

(line 14).

death. Alternate valuation cannot be

valuation.

However, you may also use line 15 to

applied to only a part of the property.

Rent. Rent accrued to the date of the

report credit taken for federal gift taxes

decedent’s death on leased real or

You may elect special use valuation

imposed by Chapter 12 of the Code, and

personal property is property of the gross

(line 2) in addition to alternate valuation.

the corresponding provisions of prior

estate on the date of death and is

You may not elect alternate valuation

laws, on certain transfers the decedent

included in the alternate valuation.

unless the election will decrease both the

made before January 1, 1977, that are

Dividends. Outstanding dividends

value of the gross estate and the sum

included in the gross estate. The credit

that were declared to stockholders of

(reduced by allowable credits) of the

cannot be more than the amount figured

record on or before the date of the

estate and GST taxes payable by reason

by the following formula:

decedent’s death are considered property

of the decedent’s death with respect to

Gross estate tax minus (the sum

of the gross estate on the date of death,

the property includible in the decedent’s

of the state death taxes and

and are included in the alternate

gross estate.

unified credit)

Value of

valuation. Ordinary dividends declared to

included

You elect alternate valuation by

Value of gross estate minus (the

stockholders of record after the date of

gift

checking “Yes” on line 1 and filing Form

sum of the deductions for

the decedent’s death are not property of

706. You may make a protective alternate

charitable, public, and similar

the gross estate on the date of death and

valuation election by checking “Yes” on

gifts and bequests and marital

are not included in the alternate valuation.

line 1, writing the word “protective,” and

deduction)

However, if dividends are declared to

filing Form 706 using regular values.

stockholders of record after the date of

When taking the credit for pre-1977

Once made, the election may not be

the decedent’s death so that the shares of

federal gift taxes:

•

revoked. The election may be made on a

stock at the later valuation date do not

Include the credit in the amount on line

late filed Form 706 provided it is not filed

reasonably represent the same property

15, and

•

later than 1 year after the due date

at the date of the decedent’s death,

Identify and enter the amount of the

(including extensions actually granted).

include those dividends (except dividends

credit you are taking on the dotted line to

Relief under sections 301.9100-1 and

paid from earnings of the corporation after

the left of the entry space for line 15 on

301.9100-3 may be available to make an

the date of the decedent’s death) in the

page 1 of Form 706 with a notation

alternate valuation election or a protective

alternate valuation.

“section 2012 credit.”

alternate valuation election, provided a

As part of each Schedule A through I,

For more information, see the

Form 706 is filed no later than 1 year after

you must show:

regulations under section 2012. This

the due date of the return (including

computation may be made using Form

1. What property is included in the

extensions actually granted).

4808, Computation of Credit for Gift Tax.

gross estate on the date of the decedent’s

If you elect alternate valuation, value

Attach a copy of a completed Form 4808

death;

the property that is included in the gross

or the computation of the credit. Also

2. What property was distributed,

estate as of the applicable dates as

attach all available copies of Forms 709

sold, exchanged, or otherwise disposed

follows.

filed by the decedent to help verify the

•

of within the 6-month period after the

Any property distributed, sold,

amounts entered on lines 4 and 7, and

decedent’s death, and the dates of these

exchanged, or otherwise disposed of or

the amount of credit taken (on line 15) for

distributions, etc.

separated or passed from the gross

pre-1977 federal gift taxes.

(These two items should be entered in the

estate by any method within 6 months

“Description” column of each schedule.

Canadian marital credit. In addition

after the decedent’s death is valued on

Briefly explain the status or disposition

to using line 15 to report credit for federal

the date of distribution, sale, exchange, or

governing the alternate valuation date,

gift taxes on pre-1977 gifts, you may also

other disposition, whichever occurs first.

such as: “Not disposed of within 6 months

use line 15 to claim the Canadian marital

Value this property on the date it ceases

following death,” “Distributed,” “Sold,”

credit, where applicable.

to form a part of the gross estate; for

“Bond paid on maturity,” etc. In this same

When taking the marital credit under

example, on the date the title passes as

column, describe each item of principal

the 1995 Canadian Protocol:

the result of its sale, exchange, or other

•

and includible income);

Include the credit in the amount on line

disposition.

•

3. The date of death value, entered in

15, and

Any property not distributed, sold,

•

the appropriate value column with items

Identify and enter the amount of the

exchanged, or otherwise disposed of

of principal and includible income shown

credit you are taking on the dotted line to

within the 6-month period is valued on the

separately; and

the left of the entry space for line 15 on

date 6 months after the date of the

4. The alternate value, entered in the

page 1 of Form 706 with a notation

decedent’s death.

•

appropriate value column with items of

“Canadian marital credit.”

Any property, interest, or estate that is

principal and includible income shown

“affected by mere lapse of time” is valued

Also, attach a statement to the return

separately.

as of the date of decedent’s death or on

that refers to the treaty, waives QDOT

(In the case of any interest or estate, the

the date of its distribution, sale,

rights, and shows the computation of the

value of which is affected by lapse of

exchange, or other disposition, whichever

marital credit. See the 1995 Canadian

time, such as patents, leaseholds, estates

occurs first. However, you may change

income tax treaty protocol for details on

for the life of another, or remainder

the date of death value to account for any

computing the credit.

interests, the value shown under the

change in value that is not due to a “mere

heading “Alternate value” must be the

lapse of time” on the date of its

adjusted value; for example, the value as

Instructions for Part 3.

distribution, sale, exchange, or other

of the date of death with an adjustment

disposition.

Elections by the Executor

reflecting any difference in its value as of

The property included in the alternate

the later date not due to lapse of time.)

(Page 2 of Form 706)

valuation and valued as of 6 months after

the date of the decedent’s death, or as of

Distributions, sales, exchanges, and

Line 1—Alternate Valuation

some intermediate date (as described

other dispositions of the property within

above) is the property included in the

the 6-month period after the decedent’s

See the example on page 12

gross estate on the date of the decedent’s

death must be supported by evidence. If

TIP

showing the use of Schedule B

death. Therefore, you must first determine

the court issued an order of distribution

where the alternate valuation is

what property constituted the gross estate

during that period, you must submit a

adopted.

at the decedent’s death.

certified copy of the order as part of the

-6-

Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2005 Page 6

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