Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 10
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55Line 10. Adjustment to
adjustments are incorporated into the
(on line 15) for pre-1977 federal gift
worksheets.
taxes.
Applicable Credit
Lines 9a Through 9e.
Canadian marital credit. In addition to
If the decedent made gifts (including
using line 15 to report credit for federal
Applicable Credit Amount
gifts made by the decedent's spouse
gift taxes on pre-1977 gifts, you also
and treated as made by the decedent
(Formerly Unified Credit
may use line 15 to claim the Canadian
by reason of gift splitting) after
Amount)
marital credit, where applicable.
September 8, 1976, and before January
The applicable credit amount is
1, 1977, for which the decedent claimed
When taking the marital credit under
allowable credit against estate and gift
a specific exemption, the applicable
the 1995 Canadian Protocol:
taxes. It is calculated by determining the
credit amount on this estate tax return
Include the credit in the amount on
tentative tax on the applicable exclusion
must be reduced. The reduction is
line 15, and
amount, which is the amount that can be
figured by entering 20% of the specific
Identify and enter the amount of the
transferred before an estate tax liability
exemption claimed for these gifts.
credit you are taking on the dotted line
will be incurred.
to the left of the entry space for line 15
Note. The specific exemption was
on page 1 of Form 706 with a notation,
The applicable exclusion amount
allowed by section 2521 for gifts made
“Canadian marital credit.”
equals the total of the following.
before January 1, 1977.
Line 9a: The basic exclusion amount.
Also, attach a statement to the return
If the decedent did not make any gifts
In 2017, the basic exclusion amount, as
that refers to the treaty, waives
between September 8, 1976, and
Qualifying Domestic Trust (QDOT)
adjusted for inflation under section
January 1, 1977, or if the decedent
rights, and shows the computation of
2010(c)(3), is $5,490,000.
made gifts during that period but did not
the marital credit. See the 1995
Line 9b: The DSUE. If the decedent
claim the specific exemption, enter zero.
Canadian income tax treaty protocol for
had a spouse who died after 2010,
Line 15. Total Credits
details on figuring the credit.
whose estate did not use all of its
applicable exclusion against gift or
Generally, line 15 is used to report the
estate tax liability, a DSUE amount may
total of credit for foreign death taxes
Part 3—Elections by the
be available for use by the decedent's
(line 13) and credit for tax on prior
Executor
estate. If the predeceased spouse died
transfers (line 14).
in 2011, the DSUE amount was
However, you also may use line 15 to
Note. The election to allow the
calculated and attached to his or her
report credit taken for federal gift taxes
decedent's surviving spouse to use the
Form 706. If the predeceased spouse
imposed by Chapter 12 of the Code,
decedent's unused exclusion amount is
died in 2012 or after, this amount is
and the corresponding provisions of
made by filing a timely and complete
found in Part 6, Section C, of the Form
prior laws, on certain transfers the
Form 706. See instructions for Part
706 filed by the estate of the decedent's
decedent made before January 1, 1977,
6—Portability of Deceased Spousal
predeceased spouse. The amount to be
that are included in the gross estate.
Unused Exclusion, later, and sections
entered on line 9b is calculated in Part
The credit cannot be more than the
2010(c)(4) and (c)(5).
6, Section D.
amount figured by the following formula.
Line 9c: The Restored Exclusion
Line 1. Alternate Valuation
Amount. If a decedent made a taxable
Gross estate tax minus (the
gift during the decedent's lifetime to the
See the example showing the
sum of the state death taxes
Value of
decedent's same-sex spouse and that
use of Schedule B where the
TIP
and unified credit)
x
included
transfer resulted in a reduction of the
alternate valuation is adopted.
gift
Value of gross estate minus
decedent's available applicable
(the sum of the deductions for
Unless you elect at the time the return is
exclusion amount, the amount of the
charitable, public, and similar
filed to adopt alternate valuation as
applicable exclusion that was reduced
gifts and bequests and marital
authorized by section 2032, value all
can be restored. If the applicable
deduction)
property included in the gross estate as
exclusion was previously restored on a
of the date of the decedent's death.
Form 709, enter the value on
Alternate valuation cannot be applied to
Schedule C, line 3, of Form 709. If the
When taking the credit for pre-1977
only a part of the property.
applicable exclusion has not yet been
federal gift taxes:
previously restored, follow the directions
You may elect special-use valuation
Include the credit in the amount on
in the instructions to Form 709,
(line 2) in addition to alternate valuation.
line 15, and
Schedule C, to determine the Restored
Identify and enter the amount of the
You may not elect alternate valuation
Exclusion Amount. The Restored
credit you are taking on the dotted line
unless the election will decrease both
Exclusion Amount is entered on line 9c.
to the left of the entry space for line 15
the value of the gross estate and the
on page 1 of Form 706 with a notation,
sum (reduced by allowable credits) of
The total of lines 9a, 9b, and 9c is
“section 2012 credit.”
the estate and GST taxes payable by
entered on line 9d. If the amounts
reason of the decedent's death for the
entered on both lines 9b and 9c are
For more information, see the
property includible in the decedent's
zero, enter $2,141,800 on line 9e.
regulations under section 2012. This
gross estate.
Otherwise, determine the applicable
computation may be made using Form
credit on the amount on line 9d by using
4808. Attach a copy of a completed
Elect alternate valuation by checking
Table A –Unified Rate Schedule, above
Form 4808 or the computation of the
“Yes,” on line 1 and filing Form 706. You
and enter the result on line 9e.
credit. Also, attach all available copies
may make a protective alternate
of Forms 709 filed by the decedent to
valuation election by checking “Yes,” on
help verify the amounts entered on lines
line 1, writing the word “protective,” and
4 and 7, and the amount of credit taken
filing Form 706 using regular values.
-10-
Part Instructions
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