Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 48
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55The decedent or a member of the
prohibition on more than a de minimis
Line 4
decedent's family must have owned the
use for commercial recreational activity.
Enter on this line the gross value at
land for the 3-year period ending on the
Qualified organization. A qualified
which the land was reported on the
date of the decedent's death.
organization includes:
applicable asset schedule on this Form
No later than the date the election is
Corporations and any community
706. Do not reduce the value by the
made, a qualified conservation
chest, fund, or foundation, organized
amount of any mortgage outstanding.
easement on the land has been made
and operated exclusively for religious,
Report the estate tax value even if the
by the decedent, a member of the
charitable, scientific, testing for public
easement was granted by the decedent
decedent's family, the executor of the
safety, literary, or educational purposes,
(or someone other than the decedent)
decedent's estate, or the trustee of a
or to foster national or international
prior to the decedent's death.
trust that holds the land.
amateur sports competition, or for the
Note. If the value of the land reported
The land is located in the United
prevention of cruelty to children or
States or one of its possessions.
on line 4 was different at the time the
animals, without net earnings benefitting
easement was contributed than that
any individual shareholder and without
reported on Form 706, see the Caution
Member of Family
activity with the purpose of influencing
at the beginning of the Schedule U
legislation or political campaigning;
Members of the decedent's family
instructions.
which
include the decedent's spouse;
ancestors; lineal descendants of the
a. Receives more than one-third of its
Line 5
decedent, of the decedent's spouse,
support from gifts, contributions,
The amount on line 5 should be the date
and of the parents of the decedent; and
membership fees, or receipts from
of death value of any qualifying
the spouse of any lineal descendant. A
sales, admissions fees, or performance
conservation easements granted prior
legally adopted child of an individual is
of services, or
to the decedent's death, whether
considered a child of the individual by
b. Is controlled by such an
granted by the decedent or someone
blood.
organization.
other than the decedent, for which the
Any entity that qualifies under section
exclusion is being elected.
Indirect Ownership of Land
170(b)(1)(A)(v) or (vi).
Note. If the value of the easement
The qualified conservation easement
Conservation purpose. An easement
reported on line 5 was different at the
exclusion applies if the land is owned
has a conservation purpose if it is for:
time the easement was contributed than
indirectly through a partnership,
The preservation of land areas for
at the date of death, see the Caution at
corporation, or trust, if the decedent
outdoor recreation by, or for the
the beginning of the Schedule U
owned (directly or indirectly) at least
education of, the public;
instructions.
30% of the entity. For the rules on
The protection of a relatively natural
determining ownership of an entity, see
habitat of fish, wildlife, or plants, or a
Ownership rules next.
Line 7
similar ecosystem; or
The preservation of open space
You must reduce the land value by the
Ownership rules. An interest in
(including farmland and forest land)
value of any development rights
property owned, directly or indirectly, by
where such preservation is for the
or for a corporation, partnership, or trust
retained by the donor in the conveyance
scenic enjoyment of the general public,
is considered proportionately owned by
of the easement. A development right is
or under a clearly delineated federal,
or for the entity's shareholders, partners,
any right to use the land for any
state, or local conservation policy and
or beneficiaries. A person is the
commercial purpose that is not
will yield a significant public benefit.
beneficiary of a trust only if he or she
subordinate to or directly supportive of
has a present interest in the trust. For
the use of the land as a farm for farming
Specific Instructions
purposes.
additional information, see the
Line 1
ownership rules in section 2057(e)(3).
Note. If the value of the retained
If the land is reported as one or more
development rights reported on line 7
Qualified Conservation Easement
item numbers on a Form 706 schedule,
was different at the time the easement
simply list the schedule and item
was contributed than at the date of
A qualified conservation easement is
numbers. If the land subject to the
death, see the Caution at the beginning
one that would qualify as a qualified
easement is only part of an item,
of the Schedule U instructions.
conservation contribution under section
however, list the schedule and item
170(h). It must be a contribution:
number and describe the part subject to
You do not have to make this
Of a qualified real property interest,
the easement. See the instructions for
reduction if everyone with an interest in
To a qualified organization, and
Schedule A—Real Estate for
the land (regardless of whether in
Exclusively for conservation
information on how to describe the land.
possession) agrees to permanently
purposes.
extinguish the retained development
Qualified real property interest. A
Line 3
right. The agreement must be filed with
qualified real property interest is any of
this return and must include all of the
Using the general rules for describing
the following.
following information and terms.
real estate, provide enough information
The entire interest of the donor, other
1. A statement that the agreement is
so the IRS can value the easement.
than a qualified mineral interest;
made under section 2031(c)(5).
Give the date the easement was
A remainder interest; or
granted and by whom it was granted.
A restriction granted in perpetuity on
2. A list of all persons in being
the use that may be made of the real
holding an interest in the land that is
property. The restriction must include a
subject to the qualified conservation
easement. Include each person's name,
-48-
Part Instructions
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