Instructions For Form 706 - 2016 Page 25
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54Completing the Schedule
Name of purchaser,
Insurance in favor of the estate.
Contract date,
Include on Schedule D the full amount
You must list every insurance policy on
Property description,
of the proceeds of insurance on the life
the life of the decedent, whether or not it
Sale price,
of the decedent receivable by the
is included in the gross estate.
Initial payment,
executor or otherwise payable to or for
Under “Description,” list:
Amounts of installment payment,
the benefit of the estate. Insurance in
The name of the insurance company,
Unpaid balance of principal, and
favor of the estate includes insurance
and
Interest rate.
used to pay the estate tax, and any
The number of the policy.
For cash on hand, list such cash
other taxes, debts, or charges that are
separately from bank deposits.
enforceable against the estate. The
For every life insurance policy listed
manner in which the policy is drawn is
on the schedule, request a statement on
For cash in banks, savings and loan
immaterial as long as there is an
Form 712, Life Insurance Statement,
associations, and other types of
obligation, legally binding on the
from the company that issued the policy.
financial organizations, list:
beneficiary, to use the proceeds to pay
Attach the Form 712 to Schedule D.
Name and address of each financial
taxes, debts, or charges. You must
organization,
If the policy proceeds are paid in one
include the full amount even though the
Amount in each account,
sum, enter the net proceeds received
premiums or other consideration may
Serial or account number,
(from Form 712, line 24) in the value
have been paid by a person other than
Nature of account—checking,
(and alternate value) columns of
the decedent.
savings, time deposit, etc., and
Schedule D. If the policy proceeds are
Unpaid interest accrued from date of
Insurance receivable by beneficia-
not paid in one sum, enter the value of
last interest payment to the date of
ries other than the estate. Include on
the proceeds as of the date of the
death.
Schedule D the proceeds of all
decedent's death (from Form 712,
insurance on the life of the decedent not
line 25).
Note. If you obtain statements from the
receivable by, or for the benefit of, the
financial organizations, keep them for
If part or all of the policy proceeds
decedent's estate if the decedent
IRS inspection.
are not included in the gross estate,
possessed at death any of the following
explain why they were not included.
incidents of ownership, exercisable
Schedule D—Insurance on
either alone or in conjunction with any
Schedule E—Jointly
the Decedent's Life
person or entity.
Owned Property
Incidents of ownership in a policy
If any assets to which the
include:
special rule of Regulations
If any assets to which the
!
The right of the insured or estate to its
section 20.2010-2(a)(7)(ii)
special rule of Regulations
!
CAUTION
economic benefits;
applies are reported on this schedule,
section 20.2010-2(a)(7)(ii)
CAUTION
The power to change the beneficiary;
do not enter any value in the last three
applies are reported on this schedule,
The power to surrender or cancel the
columns. See instructions for line 10 of
do not enter any value in the last three
policy;
Part 5–Recapitulation for information on
columns. See instructions for line 10 of
The power to assign the policy or to
how to estimate and report the value of
Part 5–Recapitulation for information on
revoke an assignment;
how to estimate and report the value of
these assets.
The power to pledge the policy for a
these assets.
If you are required to file Form 706
loan;
and there was any insurance on the
If you are required to file Form 706,
The power to obtain from the insurer
decedent's life, whether or not included
complete Schedule E and file it with the
a loan against the surrender value of the
in the gross estate, you must complete
return if the decedent owned any joint
policy; and
Schedule D and file it with the return.
property at the time of death, whether or
A reversionary interest if the value of
not the decedent's interest is includible
the reversionary interest was more than
Insurance you must include on
in the gross estate.
5% of the value of the policy
Schedule D. Under section 2042, you
immediately before the decedent died.
must include in the gross estate:
Enter on this schedule all property of
(An interest in an insurance policy is
Insurance on the decedent's life
whatever kind or character, whether real
considered a reversionary interest if, for
receivable by or for the benefit of the
estate, personal property, or bank
example, the proceeds become payable
estate; and
accounts, in which the decedent held at
to the insured's estate or payable as the
Insurance on the decedent's life
the time of death an interest either as a
insured directs if the beneficiary dies
receivable by beneficiaries other than
joint tenant with right to survivorship or
before the insured.)
the estate, as described below.
as a tenant by the entirety.
Life insurance not includible in the
The term “insurance” refers to life
Do not list on this schedule property
gross estate under section 2042 may be
insurance of every description, including
that the decedent held as a tenant in
includible under some other section of
death benefits paid by fraternal
common, but report the value of the
the Code. For example, a life insurance
beneficiary societies operating under
interest on Schedule A if real estate, or
policy could be transferred by the
the lodge system, and death benefits
on the appropriate schedule if personal
decedent in such a way that it would be
paid under no-fault automobile
property. Similarly, community property
includible in the gross estate under
insurance policies if the no-fault insurer
held by the decedent and spouse
section 2036, 2037, or 2038. See the
was unconditionally bound to pay the
should be reported on the appropriate
instructions to Schedule G for a
benefit in the event of the insured's
Schedules A through I. The decedent's
description of these sections.
death.
interest in a partnership should not be
entered on this schedule unless the
partnership interest itself is
Part Instructions
-25-
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