Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 34
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55decedent's final income tax return under
Face and unpaid balance,
enforceable against other property of
section 213(c), they also may not be
Date and term of note,
the estate not subject to the mortgage
claimed on the estate tax return. In this
Interest rate, and
or lien, or if the decedent was personally
case, you also may not deduct on the
Date to which interest was paid
liable for the debt, include the full value
estate tax return any amounts that were
before death.
of the property subject to the mortgage
not deductible on the income tax return
or lien in the gross estate under the
Include the exact nature of the claim
because of the percentage limitations.
appropriate schedule and deduct the
as well as the name of the creditor. If the
mortgage or lien on the property on this
Debts of the Decedent
claim is for services performed over a
schedule.
period of time, state the period covered
List under Debts of the Decedent only
However, if the decedent's estate is
by the claim.
valid debts the decedent owed at the
not liable, include in the gross estate
time of death. List any indebtedness
Example. Edison Electric
only the value of the equity of
secured by a mortgage or other lien on
Illuminating Co., for electric service
redemption (or the value of the property
property of the gross estate under
during December 2016, $150.
less the amount of the debt), and do not
Mortgages and Liens. If the amount of
deduct any portion of the indebtedness
If the amount of the claim is the
the debt is disputed or the subject of
on this schedule.
unpaid balance due on a contract for the
litigation, deduct only the amount the
Notes and other obligations secured
purchase of any property included in the
estate concedes to be a valid claim.
by the deposit of collateral, such as
gross estate, indicate the schedule and
Generally, if the claim against the
stocks, bonds, etc., also should be
item number where you reported the
estate is based on a promise or
listed under Mortgages and Liens.
property. If the claim represents a joint
agreement, the deduction is limited to
and separate liability, give full facts and
Description
the extent that the liability was
explain the financial responsibility of the
contracted bona fide and for an
Include under the Description column
co-obligor.
adequate and full consideration in
the particular schedule and item number
Property and income taxes. The
money or money's worth. However, any
where the property subject to the
deduction for property taxes is limited to
enforceable claim based on a promise
mortgage or lien is reported in the gross
the taxes accrued before the date of the
or agreement of the decedent to make a
estate.
decedent's death. Federal taxes on
contribution or gift (such as a pledge or
Include the name and address of the
income received during the decedent's
a subscription) to or for the use of a
mortgagee, payee, or obligee, and the
lifetime are deductible, but taxes on
charitable, public, religious, etc.,
date and term of the mortgage, note, or
income received after death are not
organization is deductible to the extent
other agreement by which the debt was
deductible.
that the deduction would be allowed as
established. Also include the face
a bequest under the statute that applies.
Keep all vouchers or original records
amount, the unpaid balance, the rate of
for inspection by the IRS.
Certain claims of a former spouse
interest, and date to which the interest
against the estate based on the
was paid before the decedent's death.
Allowable death taxes. If you elect to
relinquishment of marital rights are
take a deduction for foreign death taxes
Schedule L—Net Losses
deductible on Schedule K. For these
under section 2053(d) rather than a
claims to be deductible, all of the
During Administration and
credit under section 2014, the deduction
following conditions must be met.
is subject to the limitations described in
Expenses Incurred in
The decedent and the decedent's
section 2053(d) and its regulations. If
Administering Property
spouse must have entered into a written
you have difficulty figuring the
agreement relative to their marital and
Not Subject to Claims
deduction, you may request a
property rights.
computation of it. Send your request
The decedent and the spouse must
Use Schedule PC to make a
within a reasonable amount of time
have been divorced before the
protective claim for refund for
before the due date of the return to:
!
decedent's death and the divorce must
expenses which are not
CAUTION
have occurred within the 3-year period
Department of the Treasury
currently deductible under section 2053.
beginning on the date 1 year before the
For such a claim, report the expense on
Commissioner of Internal Revenue
agreement was entered into. It is not
Schedule L but without a value in the
Washington, DC 20224.
required that the agreement be
last column.
approved by the divorce decree.
Complete Schedule L and file it with
The property or interest transferred
Attach to your request a copy of the will
the return if you claim deductions on
under the agreement must be
and relevant documents, a statement
either item 19 or item 20 of Part
transferred to the decedent's spouse in
showing the distribution of the estate
5—Recapitulation.
settlement of the spouse's marital rights.
under the decedent's will, and a
Net Losses During
computation of the state or foreign
You may not deduct a claim made
death tax showing any amount payable
Administration
against the estate by a remainderman
by a charitable organization.
relating to section 2044 property.
You may deduct only those losses from
Section 2044 property is described in
Mortgages and Liens
thefts, fires, storms, shipwrecks, or
the instructions to line 7 in Part
other casualties that occurred during the
Under Mortgages and Liens list only
4—General Information.
settlement of the estate. Deduct only the
obligations secured by mortgages or
amount not reimbursed by insurance or
Include in this schedule notes
other liens on property included in the
otherwise.
unsecured by mortgage or other lien
gross estate at its full value or at a value
and give full details, including:
that was undiminished by the amount of
Describe in detail the loss sustained
Name of payee,
the mortgage or lien. If the debt is
and the cause. If you received
-34-
Part Instructions
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