Instructions For Form 706-Gs(T) - (Rev. February 2011) printable pdf download

Instructions for

Department of the Treasury

Internal Revenue Service

Form 706-GS(T)

(Rev. February 2011)

Generation-Skipping Transfer Tax Return for 2010 Terminations

If you are not able to file the return

Schedules A for each separate trust, as

Section references are to the Internal

by the due date, you may request an

that term is used here.

Revenue Code unless otherwise noted.

extension of time to file by filing Form

Terminations Subject to

7004, Application for Automatic

What’s New

Extension of Time To File Certain

GST Tax

Business Income Tax, Information, and

•

In accordance with T.D. 9501, the

Other Returns. The extension is

A termination may occur by reason of

paid preparer signature block has been

automatic, so you do not have to sign

death, lapse of time, release of a

revised. Paid preparers must sign the

the form or provide a reason for your

power, or any other means.

return and furnish the preparer

request. You must file Form 7004 on or

In general, all taxable terminations

information requested in the Paid

before the regular due date of Form

are subject to the GST tax. A taxable

Preparer Use Only area.

706-GS(T). See Form 7004 for more

•

termination is the conclusion of an

For generation-skipping transfers

information.

interest in property held in trust unless:

made in 2010, the amount determined

•

Immediately after the termination, a

by section 2641 will be zero. See Tax

Where To File

non-skip person has an interest in the

Relief, Unemployment Reauthorization,

File Form 706-GS(T) at the following

property or

and Job Creation Act of 2010, Public

•

address:

At no time after the termination may

Law 111-312, section 302(c).

•

a distribution be made from the trust to

For generation-skipping transfers

Department of the Treasury

a skip person.

made after December 31, 2009, but

Internal Revenue Service

before December 17, 2010, the due

Cincinnati, OH 45999

Exceptions

date of the return will be September 19,

Trusts

2011 (not including extensions).

Irrevocable trusts. Except as

described under Additions to

Nonexplicit trusts. An arrangement

irrevocable trusts below, the GST tax

General Instructions

that has substantially the same effect

does not apply to any termination of an

as a trust will be treated as a trust even

interest in a trust that was irrevocable

though it is not an explicit trust.

Purpose of Form

on September 25, 1985. Any trust in

Examples of such arrangements are

existence on September 25, 1985, will

insurance and annuity contracts,

Form 706-GS(T) is used by a trustee to

be considered irrevocable unless:

arrangements involving life estates and

figure and report the tax due from

remainders, and estates for years.

1. On September 25, 1985, the

certain trust terminations that are

settlor held a power with respect to

In general, a transfer of property in

subject to the generation-skipping

such trust that would have caused the

which the identity of the transferee is

transfer (GST) tax.

value of the trust to be included in the

conditioned on the occurrence of an

Who Must File

settlor’s gross estate for federal estate

event is a transfer in trust. This rule

tax purposes by reason of section 2038

does not apply to a testamentary trust,

In general, the trustee of any trust that

(regarding revocable transfers) if the

however, if the event is to occur within

has a taxable termination (defined

settlor had died on September 25,

6 months of the transferor’s date of

below) must file Form 706-GS(T) for the

1985; or

death.

tax year in which the termination

2. Regarding a policy of life

occurred.

Nonexplicit trusts do not include

insurance that is treated as a trust

decedents’ estates.

under section 2652(b), the insured

When To File

possessed an incident of ownership on

In the case of a nonexplicit trust, the

September 25, 1985, that would have

Generally, the trustee must file Form

person in actual or constructive

caused the insurance proceeds to be

706-GS(T) by April 15th of the year

possession of the property involved is

included in the insured’s gross estate

following the calendar year in which the

considered the trustee and is liable for

for federal estate tax purposes if the

termination occurs. If the due date falls

filing Form 706-GS(T).

insured had died on September 25,

on a Saturday, Sunday, or legal

If you are filing this return for a

1985.

holiday, file on the next business day.

nonexplicit trust, see the instructions for

However, for terminations in 2010,

line 1b.

For more information, see

the due dates are modified as follows:

Separate trusts. You must treat as

Regulations section 26.2601-1(b).

•

For terminations between January 1,

separate trusts:

2010, and December 16, 2010, the due

Trusts containing qualified

•

Portions of a trust that are

date for the Form 706-GS(T) will be

terminable interest property.

attributable to transfers from different

September 17, 2011. See Pub. L.

Irrevocable trusts in existence on

transferors and

111-312, section 301(d)(2).

September 25, 1985, that hold qualified

•

Substantially separate and

•

For 2010 terminations made

terminable interest property (QTIP) (as

independent shares of different

December 17, 2010, or later, the due

defined in section 2056(b)(7)) as a

beneficiaries in a trust.

date for the Form 706-GS(T) will be

result of an election under section

April 18, 2011, due to the Emancipation

If you are the trustee for separate

2056(b)(7) or 2523(f), are treated for

Day holiday in the District of Columbia.

trusts as described above, you must file

purposes of the GST tax as if the QTIP

See section 7503.

a single Form 706-GS(T) but separate

election had not been made. Thus,

Cat. No. 10829R

Instructions For Form 706-Gs(T) - (Rev. February 2011)

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