Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return Page 28
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46Form 706 (Rev. 11-01)
Examples of Listing of Property Interests on Schedule M
Item
Description of property interests passing to surviving spouse
Amount
number
1
One-half the value of a house and lot, 256 South West Street, held by decedent and surviving spouse as joint tenants
with right of survivorship under deed dated July 15, 1957 (Schedule E, Part I, item 1)
$132,500
2
Proceeds of Gibraltar Life Insurance Company policy No. 104729, payable in one sum to surviving spouse
(Schedule D, item 3)
200,000
3
Cash bequest under Paragraph Six of will
100,000
Instructions for Schedule
taker in default at the decedent’s
1. Another interest in the same
nonexercise of a power;
property passed from the decedent to
M—Bequests, etc., to
some other person for less than
4. As a beneficiary of insurance on the
Surviving Spouse (Marital
adequate and full consideration in
decedent’s life;
Deduction)
money or money’s worth; and
5. As the surviving spouse taking
2. By reason of its passing, the other
under dower or curtesy (or similar
General
person or that person’s heirs may enjoy
statutory interest); and
You must complete Schedule M and file
part of the property after the termination
6. As a transferee of a transfer made
it with the return if you claim a
of the surviving spouse’s interest.
by the decedent at any time.
deduction on item 20 of Part 5,
This rule applies even though the
Recapitulation.
Property Interests That You May
interest that passes from the decedent
The marital deduction is authorized by
Not List on Schedule M
to a person other than the surviving
section 2056 for certain property
spouse is not included in the gross
You should not list on Schedule M:
interests that pass from the decedent to
estate, and regardless of when the
1. The value of any property that does
the surviving spouse. You may claim the
interest passes. The rule also applies
not pass from the decedent to the
deduction only for property interests that
regardless of whether the surviving
surviving spouse;
are included in the decedent’s gross
spouse’s interest and the other person’s
estate (Schedules A through I ).
2. Property interests that are not
interest pass from the decedent at the
included in the decedent’s gross estate;
same time.
Note: The mar ital deduction is generally
not allowed if the surviving spouse is not
3. The full value of a property interest
Property interests that are considered
a U.S. citizen. The mar ital deduction is
for which a deduction was claimed on
to pass to a person other than the
allowed for property passing to such a
Schedules J through L. The value of the
surviving spouse are any property
surviving spouse in a “qualified domestic
property interest should be reduced by
interest that: (a) passes under a
trust” or if such property is transferred or
the deductions claimed with respect to
decedent’s will or intestacy; (b) was
irrevocably assigned to such a trust
it;
transferred by a decedent during life; or
before the estate tax retur n is filed. The
4. The full value of a property interest
(c) is held by or passed on to any
executor must elect qualified domestic
person as a decedent’s joint tenant, as
that passes to the surviving spouse
trust status on this retur n. See the
subject to a mortgage or other
appointee under a decedent’s exercise
instructions that follow, on pages 29–30,
of a power, as taker in default at a
encumbrance or an obligation of the
for details on the election.
decedent’s release or nonexercise of a
surviving spouse. Include on
Schedule M only the net value of the
power, or as a beneficiary of insurance
Property Interests That You May
on the decedent’s life.
interest after reducing it by the amount
List on Schedule M
of the mortgage or other debt;
For example, a decedent devised real
Generally, you may list on Schedule M
5. Nondeductible terminable interests
property to his wife for life, with
all property interests that pass from the
remainder to his children. The life
(described below);
decedent to the surviving spouse and
interest that passed to the wife does not
6. Any property interest disclaimed by
are included in the gross estate.
qualify for the marital deduction because
the surviving spouse.
However, you should not list any
it will terminate at her death and the
“Nondeductible terminable interests”
Terminable Interests
children will thereafter possess or enjoy
(described below) on Schedule M unless
the property.
Certain interests in property passing
you are making a QTIP election. The
from a decedent to a surviving spouse
However, if the decedent purchased a
property for which you make this
are referred to as terminable interests.
joint and survivor annuity for himself and
election must be included on
These are interests that will terminate or
his wife who survived him, the value of
Schedule M. See “Qualified terminable
fail after the passage of time, or on the
the survivor’s annuity, to the extent that
interest property” on the following page.
occurrence or nonoccurrence of some
it is included in the gross estate,
For the rules on common disaster and
contingency. Examples are: life estates,
qualifies for the marital deduction
survival for a limited period, see section
annuities, estates for terms of years,
because even though the interest will
2056(b)(3).
and patents.
terminate on the wife’s death, no one
You may list on Schedule M only
else will possess or enjoy any part of the
The ownership of a bond, note, or
those interests that the surviving spouse
property.
other contractual obligation, which when
takes:
discharged would not have the effect of
The marital deduction is not allowed
1. As the decedent’s legatee, devisee,
an annuity for life or for a term, is not
for an interest that the decedent
heir, or donee;
considered a terminable interest.
directed the executor or a trustee to
convert, after death, into a terminable
2. As the decedent’s surviving tenant
Nondeductible terminable interests.
interest for the surviving spouse. The
by the entirety or joint tenant;
A terminable interest is nondeductible,
marital deduction is not allowed for such
and should not be entered on
3. As an appointee under the
an interest even if there was no interest
Schedule M (unless you are making a
decedent’s exercise of a power or as a
QTIP election) if:
Page 28
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