Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 25
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55Unpaid balance,
immediately before the decedent died.
Insurance you must include on
Date of mortgage,
(An interest in an insurance policy is
Schedule D. Under section 2042, you
Name of maker,
considered a reversionary interest if, for
must include in the gross estate:
Property mortgaged,
example, the proceeds become payable
Insurance on the decedent's life
Date of maturity,
to the insured's estate or payable as the
receivable by or for the benefit of the
Interest rate, and
insured directs if the beneficiary dies
estate; and
Interest date.
before the insured.)
Insurance on the decedent's life
receivable by beneficiaries other than
Life insurance not includible in the
Example to enter in “Description”
the estate, as described below.
gross estate under section 2042 may be
column: “Bond and mortgage of
includible under some other section of
$50,000, unpaid balance: $17,000;
The term “insurance” refers to life
the Code. For example, a life insurance
dated: January 1, 1992; John Doe to
insurance of every description, including
policy could be transferred by the
Richard Roe; premises: 22 Clinton
death benefits paid by fraternal
decedent in such a way that it would be
Street, Newark, NJ; due: January 1,
beneficiary societies operating under
includible in the gross estate under
2017; interest payable at 10% a
the lodge system, and death benefits
section 2036, 2037, or 2038. See the
year—January 1 and July 1.”
paid under no-fault automobile
instructions to Schedule G for a
insurance policies if the no-fault insurer
For promissory notes, list in the same
description of these sections.
was unconditionally bound to pay the
way as mortgages.
benefit in the event of the insured's
Completing the Schedule
For contracts by the decedent to sell
death.
land, list:
You must list every insurance policy on
Name of purchaser,
Insurance in favor of the estate.
the life of the decedent, whether or not it
Contract date,
Include on Schedule D the full amount
is included in the gross estate.
Property description,
of the proceeds of insurance on the life
Under “Description,” list:
Sale price,
of the decedent receivable by the
The name of the insurance company,
Initial payment,
executor or otherwise payable to or for
and
Amounts of installment payment,
the benefit of the estate. Insurance in
The number of the policy.
Unpaid balance of principal, and
favor of the estate includes insurance
Interest rate.
used to pay the estate tax, and any
For every life insurance policy listed
other taxes, debts, or charges that are
For cash on hand, list such cash
on the schedule, request a statement on
enforceable against the estate. The
separately from bank deposits.
Form 712 from the company that issued
manner in which the policy is drawn is
For cash in banks, savings and loan
the policy. Attach the Form 712 to
immaterial as long as there is an
associations, and other types of
Schedule D.
obligation, legally binding on the
financial organizations, list:
beneficiary, to use the proceeds to pay
Name and address of each financial
Note. If the insurance company that
taxes, debts, or charges. You must
organization,
issued the policy will not provide Form
include the full amount even though the
Amount in each account,
712, you should attach evidence that
premiums or other consideration may
Serial or account number,
verifies the amount includible on
have been paid by a person other than
Nature of account—checking,
Schedule D, including but not limited to
the decedent.
savings, time deposit, etc., and
an attachment, rider, assignment, copy
Insurance receivable by beneficia-
Unpaid interest accrued from date of
of insurance proceeds check, and other
ries other than the estate. Include on
last interest payment to the date of
relevant material,
Schedule D the proceeds of all
death.
insurance on the life of the decedent not
If the policy proceeds are paid in one
Note. If you obtain statements from the
receivable by, or for the benefit of, the
sum, enter the net proceeds received
financial organizations, keep them for
decedent's estate if the decedent
(from Form 712, line 24) in the value
IRS inspection.
possessed at death any of the following
(and alternate value) columns of
incidents of ownership, exercisable
Schedule D. If the policy proceeds are
Schedule D—Insurance on
either alone or in conjunction with any
not paid in one sum, enter the value of
the Decedent's Life
person or entity.
the proceeds as of the date of the
decedent's death (from Form 712,
Incidents of ownership in a policy
If any assets to which the
line 25).
include the following.
special rule of Regulations
!
The right of the insured or estate to its
If part or all of the policy proceeds
section 20.2010-2(a)(7)(ii)
economic benefits,
CAUTION
are not included in the gross estate,
applies are reported on this schedule,
The power to change the beneficiary,
explain why they were not included.
do not enter any value in the last three
The power to surrender or cancel the
columns. See instructions for line 10 of
policy,
Schedule E—Jointly
Part 5—Recapitulation for information
The power to assign the policy or to
on how to estimate and report the value
Owned Property
revoke an assignment,
of these assets.
The power to pledge the policy for a
If any assets to which the
loan,
If you are required to file Form 706
special rule of Regulations
!
The power to obtain from the insurer
and there was any insurance on the
section 20.2010-2(a)(7)(ii)
a loan against the surrender value of the
decedent's life, whether or not included
CAUTION
applies are reported on this schedule,
policy, and
in the gross estate, you must complete
do not enter any value in the last three
A reversionary interest if the value of
Schedule D and file it with the return.
columns. See instructions for line 10 of
the reversionary interest was more than
Part 5—Recapitulation for information
5% of the value of the policy
Part Instructions
-25-
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