Instructions For Form 706 - 2016 Page 10
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54Lines 9a through 9d. Applicable
and the corresponding provisions of
Form 706. See instructions for Part
prior laws, on certain transfers the
6—Portability of Deceased Spousal
Credit Amount (formerly
decedent made before January 1, 1977,
Unused Exclusion, later, and sections
Unified Credit Amount)
that are included in the gross estate.
2010(c)(4) and (c)(5).
The applicable credit amount is
The credit cannot be more than the
Line 1. Alternate Valuation
allowable credit against estate and gift
amount figured by the following formula:
taxes. It is calculated by determining the
See the example showing the
tentative tax on the applicable exclusion
Gross estate tax minus (the
use of Schedule B where the
TIP
amount, which is the amount that can be
sum of the state death taxes
Value of
alternate valuation is adopted.
and unified credit)
x
included
transferred before an estate tax liability
gift
Unless you elect at the time the return is
will be incurred.
Value of gross estate minus
filed to adopt alternate valuation as
(the sum of the deductions for
The applicable exclusion amount
charitable, public, and similar
authorized by section 2032, value all
equals the total of:
gifts and bequests and marital
property included in the gross estate as
Line 9a: The basic exclusion amount.
deduction)
of the date of the decedent's death.
In 2016, the basic exclusion amount, as
Alternate valuation cannot be applied to
adjusted for inflation under 2010(c)(3),
only a part of the property.
is $5,450,000.
When taking the credit for pre-1977
You may elect special-use valuation
Line 9b: The deceased spousal
federal gift taxes:
(line 2) in addition to alternate valuation.
unused exclusion amount (DSUE). If the
Include the credit in the amount on
decedent had a spouse who died after
line 15 and
You may not elect alternate valuation
December 31, 2010, whose estate did
Identify and enter the amount of the
unless the election will decrease both
not use all of its applicable exclusion
credit you are taking on the dotted line
the value of the gross estate and the
against gift or estate tax liability, a
to the left of the entry space for line 15
sum (reduced by allowable credits) of
DSUE amount may be available for use
on page 1 of Form 706 with a notation,
the estate and GST taxes payable by
by the decedent's estate. If the
“section 2012 credit.”
reason of the decedent's death for the
predeceased spouse died in 2011, the
property includible in the decedent's
For more information, see the
DSUE amount was calculated and
gross estate.
regulations under section 2012. This
attached to his or her Form 706. If the
computation may be made using Form
Elect alternate valuation by checking
predeceased spouse died in 2012 or
4808. Attach a copy of a completed
“Yes,” on line 1 and filing Form 706. You
after, this amount is found in Part 6,
Form 4808 or the computation of the
may make a protective alternate
Section C of the Form 706 filed by the
credit. Also, attach all available copies
valuation election by checking “Yes,” on
estate of the decedent's predeceased
of Forms 709 filed by the decedent to
line 1, writing the word “protective,” and
spouse. The amount to be entered on
help verify the amounts entered on lines
filing Form 706 using regular values.
line 9b is calculated in Part 6, Section D.
4 and 7, and the amount of credit taken
Once made, the election may not be
Line 10. Adjustment to
(on line 15) for pre-1977 federal gift
revoked. The election may be made on
taxes.
Applicable Credit
a late-filed Form 706 provided it is not
Canadian marital credit. In addition to
If the decedent made gifts (including
filed later than 1 year after the due date
using line 15 to report credit for federal
gifts made by the decedent's spouse
(including extensions actually granted).
gift taxes on pre-1977 gifts, you may
and treated as made by the decedent
Relief under Regulations sections
also use line 15 to claim the Canadian
by reason of gift splitting) after
301.9100-1 and 301.9100-3 may be
marital credit, where applicable.
available to make an alternate valuation
September 8, 1976, and before January
election or a protective alternate
1, 1977, for which the decedent claimed
When taking the marital credit under
valuation election, provided a Form 706
a specific exemption, the applicable
the 1995 Canadian Protocol:
is filed no later than 1 year after the due
credit amount on this estate tax return
Include the credit in the amount on
date of the return (including extensions
must be reduced. The reduction is
line 15 and
actually granted).
figured by entering 20% of the specific
Identify and enter the amount of the
exemption claimed for these gifts.
credit you are taking on the dotted line
If alternate valuation is elected, value
to the left of the entry space for line 15
the property included in the gross estate
Note. The specific exemption was
on page 1 of Form 706 with a notation,
as of the following dates as applicable:
allowed by section 2521 for gifts made
“Canadian marital credit.”
Any property distributed, sold,
before January 1, 1977.
exchanged, or otherwise disposed of or
Also, attach a statement to the return
If the decedent did not make any gifts
separated or passed from the gross
that refers to the treaty, waives QDOT
between September 8, 1976, and
estate by any method within 6 months
rights, and shows the computation of
January 1, 1977, or if the decedent
after the decedent's death is valued on
the marital credit. See the 1995
made gifts during that period but did not
the date of distribution, sale, exchange,
Canadian income tax treaty protocol for
claim the specific exemption, enter zero.
or other disposition. Value this property
details on figuring the credit.
on the date it ceases to be a part of the
Line 15. Total Credits
gross estate; for example, on the date
Part 3—Elections by the
Generally, line 15 is used to report the
the title passes as the result of its sale,
total of credit for foreign death taxes
Executor
exchange, or other disposition.
(line 13) and credit for tax on prior
Any property not distributed, sold,
transfers (line 14).
Note. The election to allow the
exchanged, or otherwise disposed of
However, you may also use line 15 to
decedent's surviving spouse to use the
within the 6-month period is valued as of
report credit taken for federal gift taxes
decedent's unused exclusion amount is
6 months after the date of the
imposed by Chapter 12 of the Code,
made by filing a timely and complete
decedent's death.
-10-
Part Instructions
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