Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 11
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55Once made, the election may not be
assets are not required to be reported
Dividends. Outstanding dividends that
revoked. The election may be made on
on the Schedule. See Part
were declared to stockholders of record
a late-filed Form 706 provided it is not
5—Recapitulation, line 10.
on or before the date of the decedent's
filed later than 1 year after the due date
death are considered property of the
Distributions, sales, exchanges, and
(including extensions actually granted).
gross estate on the date of death, and
other dispositions of the property within
Relief under Regulations sections
are included in the alternate valuation.
the 6-month period after the decedent's
301.9100-1 and 301.9100-3 may be
Ordinary dividends declared to
death must be supported by evidence. If
available to make an alternate valuation
stockholders of record after the date of
the court issued an order of distribution
election or a protective alternate
the decedent's death are not included in
during that period, you must submit a
valuation election, provided a Form 706
the gross estate on the date of death
certified copy of the order as part of the
is filed no later than 1 year after the due
and are not eligible for alternate
evidence. The IRS may require you to
date of the return (including extensions
valuation. However, if dividends are
submit additional evidence, if
actually granted).
declared to stockholders of record after
necessary.
the date of the decedent's death so that
If alternate valuation is elected, value
the shares of stock at the later valuation
If the alternate valuation method is
the property included in the gross estate
date do not reasonably represent the
used, the values of life estates,
as of the following dates as applicable.
same property at the date of the
remainders, and similar interests are
Any property distributed, sold,
decedent's death, include those
figured using the age of the recipient on
exchanged, or otherwise disposed of or
dividends (except dividends paid from
the date of the decedent's death and the
separated or passed from the gross
earnings of the corporation after the
value of the property on the alternate
estate by any method within 6 months
date of the decedent's death) in the
valuation date.
after the decedent's death is valued on
alternate valuation.
the date of distribution, sale, exchange,
Line 2. Special-Use Valuation of
or other disposition. Value this property
On Schedules A through I, you must
Section 2032A
on the date it ceases to be a part of the
show:
gross estate; for example, on the date
In general. Under section 2032A, you
1. What property is included in the
the title passes as the result of its sale,
may elect to value certain farm and
gross estate on the date of the
exchange, or other disposition.
closely held business real property at its
decedent's death;
Any property not distributed, sold,
farm or business use value rather than
2. What property was distributed,
exchanged, or otherwise disposed of
its FMV. Both special-use valuation and
sold, exchanged, or otherwise disposed
within the 6-month period is valued as of
alternate valuation may be elected.
of within the 6-month period after the
6 months after the date of the
To elect special-use valuation, check
decedent's death, and the dates of
decedent's death.
“Yes,” on line 2 and complete and
these distributions, etc. (These two
Any property, interest, or estate that
attach Schedule A-1 and its required
items should be entered in the
is affected by mere lapse of time is
additional statements. You must file
“Description” column of each schedule.
valued as of the date of decedent's
Schedule A-1 and its required
Briefly explain the status or disposition
death or on the date of its distribution,
attachments with Form 706 for this
governing the alternate valuation date,
sale, exchange, or other disposition,
election to be valid. You may make the
such as: “Not disposed of within 6
whichever occurs first. However, you
election on a late-filed return so long as
months following death,” “Distributed,”
may change the date of death value to
it is the first return filed.
“Sold,” “Bond paid on maturity,” etc. In
account for any change in value that is
this same column, describe each item of
The total value of the property valued
not due to a “mere lapse of time” on the
principal and includible income);
under section 2032A may not be
date of its distribution, sale, exchange,
decreased from FMV by more than
3. The date of death value, entered
or other disposition.
$1,120,000 for decedents dying in
in the appropriate value column with
2017.
The property included in the alternate
items of principal and includible income
valuation and valued as of 6 months
shown separately; and
Real property may qualify for the
after the date of the decedent's death,
section 2032A election if:
4. The alternate value, entered in
or as of some intermediate date (as
the appropriate value column with items
1. The decedent was a U.S. citizen
described above) is the property
of principal and includible income
or resident at the time of death;
included in the gross estate on the date
shown separately. (In the case of any
2. The real property is located in the
of the decedent's death. Therefore, you
interest or estate, the value of which is
United States;
must first determine what property was
affected by lapse of time, such as
part of the gross estate at the
3. At the decedent's death, the real
patents, leaseholds, estates for the life
decedent's death.
property was used by the decedent or a
of another, or remainder interests, the
family member for farming or in a trade
value shown under the heading
Interest. Interest accrued to the date of
or business, or was rented for such use
“Alternate value” must be the adjusted
the decedent's death on bonds, notes,
by either the surviving spouse or a lineal
value; for example, the value as of the
and other interest-bearing obligations is
descendant of the decedent to a family
date of death with an adjustment
property of the gross estate on the date
member on a net cash basis;
reflecting any difference in its value as
of death and is included in the alternate
of the later date not due to lapse of
4. The real property was acquired
valuation.
time.)
from or passed from the decedent to a
Rent. Rent accrued to the date of the
qualified heir of the decedent;
decedent's death on leased real or
Note. If any property on Schedules A
5. The real property was owned and
personal property is property of the
through I is being valued pursuant to the
used in a qualified manner by the
gross estate on the date of death and is
special rule of Regulations section
decedent or a member of the
included in the alternate valuation.
20.2010-2(a)(7)(ii), values for those
Part Instructions
-11-
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