Instructions For Form 706-Gs(D) - (Rev. February 2011) (Page 2 of 3) in pdf

Column b

on the date of distribution. Attach

Specific Instructions

copies of any such liens. Explain how

In column b, use the same item

the reported values were determined

number that was used for the

and attach copies of any appraisals.

Part I

corresponding distribution on Form

706-GS(D-1). If you receive

For more information, see the

Line 1a

distributions from more than one

Instructions to Form 706, United

trust, you may need to repeat item

States Estate (and Generation-

If the skip person distributee is a

numbers.

Skipping Transfer) Tax Return. You

trust, enter the name of the trust here.

can get the Instructions to Form 706,

Column c

Line 1b

and other IRS forms and publications,

There may be instances when the

by calling 1-800-TAX-FORMS or by

For skip person distributees who are

trustee has either not completed

visiting

IRS.gov.

individuals, enter the distributee’s

columns e (value) and f (tentative

social security number (SSN) here

transfer) of Form 706-GS(D-1) or

Part III

and leave line 1c blank. If the skip

when you disagree with the amounts

person distributee is a trust, see the

the trustee entered. If this occurs,

Line 4

instructions for line 1c. Do not enter a

attach a statement to this return

number on both line 1b and line 1c.

You may deduct any adjusted

showing what you think are the

allowable expenses incurred in

Line 1c

correct amounts and how you figured

connection with the preparation of

them.

If the skip person distributee is a

this Form 706-GS(D) or any other

trust, enter the trust’s employer

To figure the tentative transfer

expenses incurred in connection with

identification number (EIN) and leave

(column c of this form), multiply the

the determination, collection, or

applicable inclusion ratio from Form

line 1b blank. Do not enter a number

refund of the GST tax reported or

706-GS(D-1), Part II, column d by the

on both line 1b and line 1c.

which should have been reported on

value of the distribution. Use the

this return from the amount of the

Line 2a

following guidelines to determine the

distribution you received.

If the skip person distributee is a

value of the distribution.

Adjusted allowable expenses are

trust, enter the trustee’s name here. If

The value of a distribution is its fair

the skip person distributee is a minor

equal to the total allowable expenses

market value on the date of

multiplied by the inclusion ratio. If you

or is under some disability that

distribution. Fair market value (FMV)

have more than one inclusion ratio in

precludes the individual from filing the

is the price at which the property

Part II, column d, of Form

return, enter the name of the person

would change hands between a

who is legally responsible for

706-GS(D-1), prorate the total

willing buyer and a willing seller,

expense among the inclusion ratios

conducting the affairs of the

when neither is forced to buy or to

based on the relative value of each

distributee, such as a parent or

sell, and both have reasonable

guardian. Also, include the title or

distribution made at the various

knowledge of all the relevant facts.

inclusion ratios.

relationship to the distributee.

FMV may not be determined by a

forced sale price nor by the sale price

Line 2b

You may deduct an expense even

of the item in a market other than that

though it has not been paid at the

Enter the address at which you wish

in which the item is most commonly

time the return is filed as long as the

to receive correspondence from the

sold to the public. The location of the

amount of the expense is clearly

IRS regarding this return. If there is

item must be taken into account

ascertainable at that time. If an

an entry on line 2a, the address

whenever appropriate.

additional allowable expense is

entered here will normally be that of

incurred after the return is filed, file

Determine the value of the

the person listed on line 2a, rather

Form 843, Claim for Refund and

property distributed as of the date of

than the individual or trust listed on

Request for Abatement, to claim a

the distribution. The date of

line 1a.

refund.

distribution is listed in Form

Part II

706-GS(D-1), Part II, column c.

Example. The following example

Reduce the value of any property

illustrates the rules above.

Report all the taxable distributions

being reported in Part II by the

with inclusion ratios greater than zero

You listed three distributions in

amount of any consideration provided

that you received during the year.

Part II of Form 706-GS(D). The value

by the distributee.

The trustee will report these

of the first distribution is $10,000 and

distributions to you on Form

Value the stock of close

has an inclusion ratio of .25. The

corporations or inactive stock on the

706-GS(D-1). Attach a copy of each

value of the second distribution is

Form 706-GS(D-1) you received

basis of net worth, earnings, earning

$20,000 and has an inclusion ratio of

during the year to this return. You

and dividend capacity, and other

.33. The value of the third distribution

relevant factors. For such stock,

should also keep a copy for your

is $30,000 and has an inclusion ratio

attach balance sheets, particularly the

records.

of .50. You received the completed

one nearest the date of the

If you need more space than is

return from the preparer along with

distribution, and statements of net

provided in Part II, attach an

the bill for the preparer’s fee on April

earnings or operating results and

additional sheet of the same size and

14 and filed the return on April 15.

dividends paid for each of the 5

use the same format that is used in

You paid the preparer’s $200 fee on

preceding years.

Part II. Make sure that the total

April 20. The adjusted allowable

tentative transfers from the

Reduce the reported value of real

expense you should report on line 4

continuation sheet are included on

estate by the amount of any

of Part III is $80, calculated as

line 3 of Part II.

outstanding lien against the property

follows.

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Instructions For Form 706-Gs(D) - (Rev. February 2011) Page 2

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