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3. Schedule A;

trusts, taken as a whole. The election

5. The qualified property is the

cannot be made unless the requirements

percentage of the surviving spouse's

4. Part III (page 1), Tax Computation.

are met for all of the property.

gross estate specified in section 2032A.

Attach each Schedule B to the return

You elect alternate valuation by

For definitions and additional

when you file it.

checking “Yes” on line 1 and filing Form

information, see section 2032A and the

If there is not enough space on a

706-QDT. Once made, the election may

related regulations and the Form 706

schedule to list all the items, attach an

not be revoked.

instructions for Elections by the Executor

additional sheet of the same size to the

and Schedule A-1.

If you elect alternate valuation, you

back of the schedule.

must value all of the property to which the

Line 3. Installment Payments

Rounding off to Whole Dollars

election applies as of the applicable date

as follows:

If you check this line to make a protective

You may show the money items on the

election, you should attach a notice of

1. Any property distributed, sold,

return and accompanying schedules as

protective election as described in

exchanged, or otherwise disposed of by

whole dollars. To do so, drop any amount

Regulations section 20.6166-1(d). If you

any method within 6 months after the

less than 50 cents and increase any

check this line to make a final election,

surviving spouse's death is valued on the

amount from 50 cents through 99 cents

you should attach the notice of election

date of distribution, sale, exchange, or

to the next higher dollar.

described in Regulations section

other disposition, whichever occurs first.

20.6166-1(b).

Value the property on the date title passes

as a result of the sale, exchange, or other

In computing the adjusted gross estate

Specific Instructions

under section 6166(b)(6) for purposes of

disposition.

determining whether an election may be

2. Any property not distributed, sold,

Part I. General Information

made under section 6166, the net amount

exchanged, or otherwise disposed of

of any real estate in a closely held

within the 6-month period is valued on the

Lines 2a, b, and c. If the trustee is filing

business must be used.

date 6 months after the date of the

the entire return, enter the trustee's

surviving spouse's death.

information on lines 2a, b, and c.

Line 4. Spousal Election

3. Any property that is “affected by

Line 2b. If the trustee/designated filer is

If the surviving spouse has become a U.S.

mere lapse of time ” is valued as of the

an individual, enter his or her social

citizen, the QDOT tax will not apply to any

date of the surviving spouse's death.

security number (SSN). Otherwise, enter

distributions made after the surviving

However, you may change the date of

the employer identification number (EIN)

spouse became a citizen as long as

death value to account for any change in

of the trustee/designated filer.

either:

value that is not due to “mere lapse of

Line 2c. Enter the address at which you

1. The surviving spouse had been a

time” on the date of its distribution, sale,

wish to receive correspondence from the

U.S. resident at all times after the death

exchange, or other disposition.

IRS regarding this return. This must be

of the decedent and before becoming a

For additional details, see Instructions

an address for the designated filer, or if

citizen; or

for Part 3.—Elections by the Executor

the trustee is filing the return, one of the

2. No QDOT tax had been imposed

in the separate Instructions for Form 706.

individual trustees who is a U.S. citizen

on any distributions prior to the surviving

or a trustee that is a domestic corporation.

Line 2. Special Use Valuation of

spouse becoming a citizen.

Line 4a. Enter the name of the decedent

Section 2032A

You should file a final Form 706-QDT

on whose estate tax return the QDOT

to notify the IRS that the QDOT tax no

Under section 2032A, you may elect to

election was made.

longer applies for this reason.

value certain farm and closely held

business real property at its farm or

If the surviving spouse does not meet

Part II. Elections by the

business use value rather than its fair

either of the conditions above, the QDOT

Trustee/Designated Filer

market value. You may elect both special

tax will still not apply to distributions after

use valuation and alternate valuation. To

he or she became a citizen if the surviving

If this return is being filed because of the

elect this valuation, you must check

spouse elects both:

death of the surviving spouse, and any

“Yes” to line 2 and complete and attach

1. To treat any distributions that were

property remaining in the QDOT at that

Schedule A-1 of Form 706 and its

subject to QDOT tax as taxable gifts for

time is includible in the estate of the

required additional statements. You must

purposes of determining the estate or gift

surviving spouse (or would be includible

file Schedule A-1 of Form 706 and its

tax under sections 2001 and 2501,

if the surviving spouse had been a U.S.

required attachments with Form

respectively, for the year the surviving

citizen or resident), then the trustee/

706-QDT for this election to be valid.

spouse became a citizen and all

designated filer may elect to apply certain

The total value of the property valued

subsequent years; and

estate tax benefits on this return, provided

under section 2032A may not be

the estate of the surviving spouse would

2. To treat any of the decedent's

decreased from fair market value by more

be eligible for these benefits.

unified credit (applicable credit amount)

than $750,000.

that was used to reduce the QDOT tax

Line 1. Alternate Valuation

Real property may qualify for the

on taxable distributions as use of the

section 2032A election if:

surviving spouse's own unified credit for

Unless you elect at the time you file this

purposes of determining the spouse's

return to adopt alternate valuation under

1. The real property is located in the

available unified credit under section 2505

section 2032, then you must value all

United States;

for the year he or she became a citizen

property of all trusts listed in Part III of

2. The real property is used for

and for all subsequent years.

Schedule A on the date of the surviving

farming or in a trade or business;

spouse's death.

To make these elections, check the

3. The real property was acquired

“Yes” box on line 4.

Note: You may not elect alternate

from or passed from the surviving spouse

valuation for any property reported in

to a qualified heir of the surviving spouse;

Schedule B

Parts I and II of Schedule A.

4. The real property was owned and

You may not elect alternate valuation

used in a qualified manner by the

Part I. General Information

unless the election will decrease both the

surviving spouse or a member of the

value of the Part III, Schedule A, property

surviving spouse's family for 5 of the 8

If the trustee is filing the entire return, you

and the net tax due on the return.

years before the surviving spouse's death;

need to complete only lines 1a and 1b of

A designated filer filing for multiple

and

this part of Schedule B (but all of Parts II

trusts must make this election for all of the

through VI). When completing Part I on

Part III, Schedule A, property in all of the

Page 3

Instructions For Form 706-Qdt - U.s. Estate Tax Return For Qualified Domestic Trusts - Internal Revenue Service - 2000 Page 3

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