Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 32
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55value of the annuity which the amount
section 402(a)(2)) in figuring the income
IF . . .
THEN . . .
not allowable as a deduction under
tax on the distribution. For more
the annuity is under an
state the ratio of the
section 219 and not a rollover
information, see Pub. 575, Pension and
approved plan,
decedent's
contribution bears to the total amount
Annuity Income. If this option is
contribution to the
paid to or for such account or annuity.
available, the estate tax exclusion
total purchase price of
For more information, see Regulations
cannot be claimed unless the recipient
the annuity.
section 20.2039-5.
elects to forego the “10-year averaging”
and capital gain treatment in figuring the
the decedent was
state the ratio of the
Rules applicable to all approved
income tax on the distribution. The
employed at the time
decedent's
plans. The following rules apply to all
recipient elects to forego this treatment
of death and an
contribution to the
approved plans described in
annuity as described
total purchase price of
by treating the distribution as taxable on
paragraphs (a) through (h), earlier.
in Definitions, Annuity,
the annuity.
his or her income tax return as
Example 4, above,
If any part of an annuity under a
described in Regulations section
became payable to
“plan” described in (a) through (h),
20.2039-4(d). The election is
any beneficiary
earlier is receivable by the executor, it is
irrevocable.
because the
generally includible in the gross estate
beneficiary survived
The amount excluded from the gross
to the extent that it is receivable by the
the decedent,
estate is the portion attributable to the
executor in that capacity. In general, the
employer contributions. The portion, if
annuity is receivable by the executor if it
an annuity under an
state the ratio of the
any, attributable to the
is to be paid to the executor or if there is
individual retirement
amount paid for the
employee-decedent's contributions is
an agreement (expressed or implied)
account or annuity
individual retirement
always includible. Also, you may not
that it will be applied by the beneficiary
became payable to
account or annuity
figure the gross estate in accordance
for the benefit of the estate (such as in
any beneficiary
that was not allowable
with this election unless you check
discharge of the estate's liability for
because that
as an income tax
“Yes” on line A and attach the name,
death taxes or debts of the decedent,
beneficiary survived
deduction under
address, and identifying number of the
etc.) or that its distribution will be
the decedent and is
section 219 (other
recipients of the lump sum distributions.
payable to the
than a rollover
governed to any extent by the terms of
beneficiary for life or
contribution) to the
See Regulations section 20.2039-4(d)
the decedent's will or the laws of
for at least 36 months
total amount paid for
(2).
descent and distribution.
following the
the account or annuity.
How To Complete Schedule I
If data available to you does not
decedent's death,
indicate whether the plan satisfies the
In describing an annuity, give the name
requirements of section 401(a), 403(a),
the annuity is payable
the description should
and address of the grantor of the
408(a), 408(b), or 409(a), you may
out of a trust or other
be sufficiently
annuity. Specify if the annuity is under
obtain that information from the IRS
fund,
complete to fully
an approved plan.
office where the employer's principal
identify it.
place of business is located.
the annuity is payable
include the duration of
Line A. Lump Sum Distribution
for a term of years,
the term and the date
Election
on which it began.
Note. The following rules have been
the annuity is payable
include the date of
repealed and apply only if the decedent:
for the life of a person
birth of that person.
On December 31, 1984, was both a
other than the
participant in the plan and in pay status
decedent,
(for example, had received at least one
benefit payment on or before December
the annuity is wholly or
enter the amount
31, 1984) and had irrevocably elected
partially excluded from
excluded under
the form of the benefit before July 18,
the gross estate,
“Description” and
1984, or
explain how you
Had separated from service before
figured the exclusion.
January 1, 1985, and did not change the
form of benefit before death.
Generally, the entire amount of any
Schedule J—Funeral
lump sum distribution is included in the
Expenses and Expenses
decedent's gross estate. However,
Incurred in Administering
under this special rule, all or part of a
lump sum distribution from a qualified
Property Subject to Claims
(approved) plan will be excluded if the
lump sum distribution is included in the
Use Schedule PC to make a
recipient's income for income tax
protective claim for refund for
!
purposes.
expenses which are not
CAUTION
currently deductible under section 2053.
If the decedent was born before
For such a claim, report the expense on
1936, the recipient may be eligible to
Schedule J but without a value in the
elect special “10-year averaging” rules
last column.
(under repealed section 402(e)) and
capital gain treatment (under repealed
-32-
Part Instructions
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