Instructions For Form 706 - 2016 Page 21
ADVERTISEMENT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54Part 2. Notice of Election
Completing the special-use value
section 2032A solely by reason of that
worksheets. On Schedule R, Parts 2
right. Likewise, creditors of an estate
Line 10. Because the special-use
and 3, lines 2 through 4 and 6, enter -0-.
are not such persons solely by reason of
valuation election creates a potential tax
their status as creditors.
Completing the fair market value
liability for the recapture tax of section
worksheets.
2032A(c), you must list each person
If any person required to enter into
Schedule R, Parts 2 and 3, lines 2
who receives an interest in the specially
the agreement either desires that an
and 3, fixed taxes and other charges. If
valued property on Schedule A-1. If
agent act for him or her or cannot legally
valuing the interests at FMV (instead of
there are more than eight persons who
bind himself or herself due to infancy or
special-use value) causes any of these
receive interests, use an additional
other incompetency, or due to death
taxes and charges to increase, enter the
sheet that follows the format of line 10.
before the election under section 2032A
increased amount (only) on these lines
In the columns “Fair market value” and
is timely exercised, a representative
and attach an explanation of the
“Special-use value,” enter the total
authorized by local law to bind the
increase. Otherwise, enter -0-.
respective values of all the specially
person in an agreement of this nature
Schedule R, Parts 2 and 3,
valued property interests received by
may sign the agreement on his or her
line 6—GST exemption allocation. If you
each person.
behalf.
completed Schedule R, Part 1, line 10,
GST Tax Savings
enter on line 6 the amount shown for the
The IRS will contact the agent
skip person on the line 10 special-use
To figure the additional GST tax due
designated in the agreement on all
allocation schedule you attached to
upon disposition (or cessation of
matters relating to continued
Schedule R. If you did not complete
qualified use) of the property, each “skip
qualification under section 2032A of the
Schedule R, Part 1, line 10, enter -0- on
person” (as defined in the instructions to
specially valued real property and on all
line 6.
Schedule R) who receives an interest in
matters relating to the special lien
the specially valued property must know
arising under section 6324B. It is the
Total GST tax savings. For each skip
the total GST tax savings all interests in
duty of the agent as attorney-in-fact for
person, subtract the tax amount on
specially valued property received. The
the parties with interests in the specially
line 10, Part 2 of the special-use value
GST tax savings is the difference
valued property to furnish the IRS with
worksheet from the tax amount on
between the total GST tax that was
any requested information and to notify
line 10, Part 2 of the fair market value
imposed on all interests in specially
the IRS of any disposition or cessation
worksheet. This difference is the skip
valued property received by the skip
of qualified use of any part of the
person's total GST tax savings.
person valued at their special-use value
property.
Part 3. Agreement to Special
and the total GST tax that would have
Checklist for Section 2032A
Valuation Under Section 2032A
been imposed on the same interests
Election
received by the skip person had they
The agreement to special valuation is
been valued at their FMV.
required under sections 2032A(a)(1)(B)
When making the special-use
and (d)(2) and must be signed by all
valuation election on
Because the GST tax depends on
!
parties who have any interest in the
Schedule A-1, please use this
the executor's allocation of the GST
CAUTION
property being valued based on its
checklist to ensure that you are
exemption and the grandchild
qualified use as of the date of the
providing everything necessary to make
exclusion, the skip person who receives
decedent's death.
a valid election.
the interests is unable to figure this GST
tax savings. Therefore, for each skip
An interest in property is an interest
To have a valid special-use valuation
person who receives an interest in
that, as of the date of the decedent's
election under section 2032A, you must
specially valued property, you must
death, can be asserted under applicable
file, in addition to the federal estate tax
attach a calculation of the total GST tax
law so as to affect the disposition of the
return, (a) a notice of election
savings attributable to that person's
specially valued property by the estate.
(Schedule A-1, Part 2), and (b) a fully
interests in specially valued property.
Any person who at the decedent's death
executed agreement (Schedule A-1,
How to figure the GST tax savings.
has any such interest in the property,
Part 3). You must include certain
Before figuring each skip person's GST
whether present, future, vested, or
information in the notice of election. To
tax savings, complete Schedules R and
contingent, must enter into the
ensure that the notice of election
R-1 for the entire estate (using the
agreement. Included are owners of
includes all of the information required
special-use values).
remainder and executory interests; the
for a valid election, use the following
holders of general or special powers of
checklist. The checklist is for your use
For each skip person, complete two
appointment; beneficiaries of a gift over
only. Do not file it with the return.
Schedules R (Parts 2 and 3 only) as
in default of exercise of any such power;
worksheets, one showing the interests
joint tenants and holders of similar
in specially valued property received by
undivided interests when the decedent
Does the notice of election
the skip person at their special-use
held only a joint or undivided interest in
include the decedent's name and
value and one showing the same
the property or when only an undivided
interests at their FMV.
social security number as they
interest is specially valued; and trustees
appear on the estate tax return?
If the skip person received interests
of trusts and representatives of other
in specially valued property that were
entities holding title to or any interests in
shown on Schedule R-1, show these
Does the notice of election
the property. An heir who has the power
interests on the Schedule R, Parts 2 and
include the relevant qualified use
under local law to challenge a will and
3 worksheets, as appropriate. Do not
of the property to be specially
thereby affect disposition of the property
use Schedule R-1 as a worksheet.
valued?
is not, however, considered to be a
person with an interest in property under
Part Instructions
-21-
ADVERTISEMENT
0 votes
Related Articles
Related forms
Related Categories
Parent category: Financial