Instructions For Form 706-Gs(T) - Generation-Skipping Transfer Tax Return For Terminations - 2008
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6Instructions for
Department of the Treasury
Internal Revenue Service
Form 706-GS(T)
(Rev. October 2008)
Generation-Skipping Transfer Tax Return for Terminations
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Section references are to the Internal
Department of the Treasury
At no time after the termination may
Internal Revenue Service Center
a distribution be made from the trust to
Revenue Code unless otherwise noted.
Cincinnati, OH 45999
a skip person.
Exceptions
What’s New
Trusts
Irrevocable trusts. Except as
Nonexplicit trusts. An arrangement
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On page 1 of Form 706-GS(T), we
described under Additions to
that has substantially the same effect
have revised the paid preparer
irrevocable trusts below, the GST tax
as a trust will be treated as a trust even
signature block. Paid preparers must
does not apply to any termination of an
though it is not an explicit trust.
sign the return and furnish the preparer
interest in a trust that was irrevocable
Examples of such arrangements are
information requested in the Paid
on September 25, 1985. Any trust in
insurance and annuity contracts,
Preparer’s Use Only area.
existence on September 25, 1985, will
arrangements involving life estates and
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The Small Business and Work
be considered irrevocable unless:
remainders, and estates for years.
Opportunity Tax Act of 2007, P.L.
1. On September 25, 1985, the
In general, a transfer of property in
110-28, extends the application of
settlor held a power with respect to
which the identity of the transferee is
return preparer penalties to preparers
such trust that would have caused the
conditioned on the occurrence of an
of all tax returns. See Penalties and
value of the trust to be included in the
event is a transfer in trust. This rule
Interest, Return preparer on page 3 for
settlor’s gross estate for federal estate
does not apply to a testamentary trust,
more information.
tax purposes by reason of section 2038
however, if the event is to occur within
(regarding revocable transfers) if the
6 months of the transferor’s date of
settlor had died on September 25,
death.
General Instructions
1985; or
Nonexplicit trusts do not include
2. Regarding a policy of life
decedents’ estates.
insurance that is treated as a trust
Purpose of Form
under section 2652(b), the insured
In the case of a nonexplicit trust, the
Form 706-GS(T) is used by a trustee to
possessed an incident of ownership on
person in actual or constructive
figure and report the tax due from
September 25, 1985, that would have
possession of the property involved is
certain trust terminations that are
caused the insurance proceeds to be
considered the trustee and is liable for
subject to the generation-skipping
included in the insured’s gross estate
filing Form 706-GS(T).
transfer (GST) tax.
for federal estate tax purposes if the
If you are filing this return for a
insured had died on September 25,
Who Must File
nonexplicit trust, see the instructions for
1985.
line 1b on page 3.
In general, the trustee of any trust that
For more information, see
Separate trusts. You must treat as
has a taxable termination (defined on
Regulations section 26.2601-1(b).
separate trusts:
this page) must file Form 706-GS(T) for
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Trusts containing qualified
Portions of a trust that are
the tax year in which the termination
terminable interest property.
attributable to transfers from different
occurred.
Irrevocable trusts in existence on
transferors and
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September 25, 1985, that hold qualified
Substantially separate and
When To File
terminable interest property (QTIP) (as
independent shares of different
defined in section 2056(b)(7)) as a
beneficiaries in a trust.
Generally, the trustee must file Form
result of an election under section
706-GS(T) by April 15th of the year
If you are the trustee for separate
2056(b)(7) or 2523(f), are treated for
following the calendar year in which the
trusts as described above, you must file
purposes of the GST tax as if the QTIP
termination occurs. If the due date falls
a single Form 706-GS(T) but separate
election had not been made. Thus,
on a Saturday, Sunday, or legal
Schedules A for each separate trust, as
transfers from such a trust will not be
holiday, file on the next business day.
that term is used here.
subject to the GST tax.
Additions to irrevocable trusts. If an
If you are not able to file the return
Terminations Subject to
addition has been made after
by the due date, you may request an
September 25, 1985, to an irrevocable
extension of time to file by filing Form
GST Tax
trust, the termination of any interest in
7004. The extension is automatic, so
A termination may occur by reason of
the trust may be subject in part to the
you do not have to sign the form or
death, lapse of time, release of a
GST tax. Additions include constructive
provide a reason for your request. You
power, or any other means.
additions described in Regulations
must file Form 7004 on or before the
section 26.2601-1(b)(1)(v).
regular due date of Form 706-GS(T).
In general, all taxable terminations
See Form 7004 for more information.
are subject to the GST tax. A taxable
Medical and educational exclusion.
termination is the termination of an
If all of the property to which the
interest in property held in trust unless:
termination applied has been
Where To File
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Immediately after the termination, a
distributed and used for medical or
File Form 706-GS(T) at the following
non-skip person has an interest in the
educational expenses of the transferee
address:
property or
such that if the transfer had been made
Cat. No. 10829R
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