Instructions For Form 706 - 2016 Page 19
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54return is required under section 6018(a),
Part B as the total of Row (r) from Line 7
Section A. Opting Out of Portability.
not filing Form 706 will avoid making the
Worksheet Part A. Enter the amount as
If you are filing Form 706 and do not
election.
it appears on line 6 of the Line 7
wish to elect portability, then check the
Worksheet Part B
box indicated. Do not complete sections
Computing the DSUE Amount
B or C.
Figure the unused exclusion amount
Regulations section 20.2010-2(b)(1)
on line 9. The DSUE amount available
Section B. Portability and Qualified
requires that a decedent's DSUE be
to the surviving spouse will be the lesser
Domestic Trusts. A qualified domestic
computed on the estate tax return. The
of this amount or the basic exclusion
trust (QDOT) allows the estate of a
DSUE amount is the lesser of (A) the
amount shown on line 9a of Part 2—Tax
decedent to bequeath property to
basic exclusion amount in effect on the
Computation. Enter the DSUE amount
surviving spouse who is not a citizen of
date of death of the decedent whose
as determined on line 10.
the United States and still receive a
DSUE is being computed, or (B) the
marital deduction. When property
Section D. DSUE Amount Received
decedent's applicable exclusion amount
passes to a QDOT, estate tax is
from Predeceased Spouse(s).
less the amount on line 5 of Part 2–Tax
imposed under section 2056A as
Complete section D if the decedent was
Computation on the Form 706 for the
distributions are made from the trust.
a surviving spouse who received a
estate of the decedent. Amounts on
When a QDOT is established and there
DSUE amount from one or more
which gift taxes were paid are excluded
is a DSUE amount, the executor of the
predeceased spouse(s).
from adjusted taxable gifts for the
decedent’s estate will determine a
purpose of this computation.
Section D requests information on all
preliminary DSUE amount for the
DSUE amounts received from the
When a surviving spouse applies the
purpose of electing portability. This
decedent’s last deceased spouse and
DSUE amount to a lifetime gift or
amount will decrease as section 2056A
any previously deceased spouses.
bequest at death, the IRS may examine
distributions are made. In estates with a
Each line in the chart should reflect a
any return of a predeceased spouse
QDOT, the DSUE amount generally
different predeceased spouse; enter the
whose executor elected portability to
may not be applied against tax arising
calendar year(s) in column F. In Part 1,
verify the allowable DSUE amount. The
from lifetime gifts because it will not be
provide information on the decedent’s
DSUE amount may be adjusted or
available to the surviving spouse until it
last deceased spouse. In Part 2, provide
eliminated as a result of the
is finally determined, usually upon the
information as requested if the decedent
examination; however, the IRS may only
death of the surviving spouse or when
had any other predeceased spouse
make an assessment of additional tax
the QDOT is terminated.
whose executor made the portability
on the return of the predeceased
election. Any remaining DSUE amount
spouse within the applicable limitations
Note. If a surviving spouse who is not a
which was not used prior to the death of
period under section 6501.
citizen of the United States becomes a
a subsequent spouse is not considered
citizen and the section 2056A tax no
Special Rule Where Value of
in this calculation and cannot be applied
longer applies to the assets of the
Certain Property Not Required
against any taxable transfer. In column
QDOT, as of the date the surviving
E, total only the amounts of DSUE
to Be Reported on Form 706
spouse becomes a U.S. citizen, the
received and used from spouses who
DSUE amount is considered final and is
The regulations provide that executors
died before the decedent’s last
available for application by the surviving
of estates who are not otherwise
deceased spouse. Add this amount to
spouse. See Regulations sections
required to file Form 706 under section
the amount from Part 1, column D, if
20.2010-2(c)(4), 20.2010-3(c)(3), and
6018(a) do not have to report the value
any, to determine the decedent’s total
25.2505-2(d)(3).
of certain property qualifying for the
DSUE amount.
marital or charitable deduction. For such
Check the appropriate box in this
property, the executor may estimate the
Schedule A—Real Estate
section and see the instructions for
value in good faith and with the due
Schedule M if more information is
diligence to be afforded all assets
If any assets to which the
needed about qualified domestic trusts.
includible in the gross estate. The
special rule of Regulations
!
Section C. DSUE Amount Portable to
amount reported on Form 706 will
section 20.2010-2(a)(7)(ii)
CAUTION
Decedent's Surviving Spouse.
correspond to a range of dollar values
applies are reported on this schedule,
Complete section C only if electing
and will be included in the value of the
do not enter any value in the last three
portability of the DSUE amount to the
columns. See instructions for line 10 of
gross estate shown on line 1 of Part
surviving spouse.
Part 5–Recapitulation for information on
2-Tax Computation. See instructions for
On line 1, enter the decedent’s
how to estimate and report the value of
lines 10 and 23 of Part 5-Recapitulation,
applicable exclusion amount from Part
these assets.
above, for more details.
2—Tax Computation, line 9c. Under
Specific Instructions
If the total gross estate contains any
section 2010(c)(2), the applicable
real estate, complete Schedule A and
exclusion amount is the sum of the
Portability Election. If you intend to
file it with the return. On Schedule A, list
basic exclusion amount for the year of
elect portability of the DSUE amount,
real estate the decedent owned or had
death and any DSUE amount received
timely filing a complete Form 706 is all
contracted to purchase. Number each
from a predeceased spouse, if
that is required. Complete section B if
parcel in the left-hand column.
applicable.
any assets of the estate are being
transferred to a qualified domestic trust
Describe the real estate in enough
Line 2 is reserved.
and complete section C of this Part to
detail so that the IRS can easily locate it
On line 3, enter the value of the
calculate the DSUE amount that will be
for inspection and valuation. For each
cumulative lifetime gifts on which gift tax
transferred to the surviving spouse.
parcel of real estate, report the area
was paid or payable. This amount is
and, if the parcel is improved, describe
figured on line 6 of the Line 7 Worksheet
the improvements. For city or town
Part Instructions
-19-
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