Instructions For Form 706 - 2016 Page 31

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fixed by contract or subject to an option
The amount excluded cannot exceed
contributions under the plan toward the
or election exercised or exercisable by
$100,000 unless either of the following
cost, no part of the value of the annuity,
the decedent. However, see Annuities
conditions is met:
subject to the $100,000 limitation (if
Under Approved Plans, later.
On December 31, 1982, the
applicable), is includible in the gross
decedent was both a participant in the
estate.
4. A contract or agreement entered
plan and in pay status (for example, had
into by the decedent and the decedent's
If the decedent made a contribution
received at least one benefit payment
employer under which at the decedent's
under a plan described in (a) through (e)
on or before December 31, 1982) and
death, before retirement, or before the
above toward the cost, include in the
the decedent irrevocably elected the
expiration of a stated period of time, an
gross estate on this schedule that
form of the benefit before January 1,
annuity was payable to a designated
proportion of the value of the annuity
1983, or
beneficiary, if surviving the decedent.
which the amount of the decedent's
The decedent separated from service
However, see Annuities Under
contribution under the plan bears to the
before January 1, 1983, and did not
Approved Plans, later.
total amount of all contributions under
change the form of benefit before death.
the plan. The remaining value of the
5. A contract or agreement under
annuity is excludable from the gross
which the decedent immediately before
Approved Plans
estate subject to the $100,000 limitation
death was receiving, or was entitled to
(if applicable). For the rules to
receive, an annuity for a stated period of
Approved plans may be separated into
determine whether the decedent made
time, with the annuity to continue to a
two categories:
contributions to the plan, see
designated beneficiary, surviving the
Pension, profit-sharing, stock bonus,
Regulations section 20.2039-1(c).
decedent, upon the decedent's death
and other similar plans and
and before the expiration of that period
Individual retirement arrangements
IRAs and retirement bonds. The
of time.
(IRAs), and retirement bonds.
following plans are approved plans for
the exclusion rules:
6. An annuity contract or other
Different exclusion rules apply to the
arrangement providing for a series of
f. An individual retirement account
two categories of plans.
substantially equal periodic payments to
described in section 408(a),
be made to a beneficiary for life or over
Pension, etc., plans. The following
g. An individual retirement annuity
a period of at least 36 months after the
plans are approved plans for the
described in section 408(b), or
date of the decedent's death under an
exclusion rules:
h. A retirement bond described in
individual retirement account, annuity,
a. An employees' trust (or a contract
section 409(a) (before its repeal by P.L.
or bond as described in section 2039(e)
purchased by an employees' trust)
98-369).
(before its repeal by P.L. 98-369).
forming part of a pension, stock bonus,
Exclusion rules for IRAs and
or profit-sharing plan that met all the
Payable to the decedent. An annuity
retirement bonds. These plans are
requirements of section 401(a), either at
or other payment was payable to the
approved plans only if they provide for a
the time of the decedent's separation
decedent if, at the time of death, the
series of substantially equal periodic
from employment (whether by death or
decedent was in fact receiving an
payments made to a beneficiary for life,
otherwise) or at the time of the
annuity or other payment, with or
or over a period of at least 36 months
termination of the plan (if earlier);
without an enforceable right to have the
after the date of the decedent's death.
b. A retirement annuity contract
payments continued.
Subject to the $100,000 limitation (if
purchased by the employer (but not by
Right to receive an annuity. The
applicable), if an annuity under a “plan”
an employees' trust) under a plan that,
decedent had the right to receive an
described in (f) through (h) above is
at the time of the decedent's separation
annuity or other payment if, immediately
receivable by a beneficiary other than
from employment (by death or
before death, the decedent had an
the executor, the entire value of the
otherwise), or at the time of the
enforceable right to receive payments at
annuity is excludable from the gross
termination of the plan (if earlier), was a
some time in the future, whether or not
estate even if the decedent made a
plan described in section 403(a);
at the time of death the decedent had a
contribution under the plan.
c. A retirement annuity contract
present right to receive payments.
However, if any payment to or for an
purchased for an employee by an
Annuities Under Approved
account or annuity described in
employer that is an organization
paragraph (f), (g), or (h) earlier was not
Plans
referred to in section 170(b)(1)(A)(ii) or
allowable as an income tax deduction
(vi), or that is a religious organization
The following rules relate to whether
under section 219 (and was not a
(other than a trust), and that is exempt
part or all of an otherwise includible
rollover contribution as described in
from tax under section 501(a);
annuity may be excluded. These rules
section 2039(e) before its repeal by P.L.
d. Chapter 73 of Title 10 of the United
have been repealed and apply only if
98-369), include in the gross estate on
States Code; or
the decedent either:
this schedule that proportion of the
On December 31, 1984, was both a
e. A bond purchase plan described in
value of the annuity which the amount
participant in the plan and in pay status
section 405 (before its repeal by P.L.
not allowable as a deduction under
(for example, had received at least one
98-369, effective for obligations issued
section 219 and not a rollover
benefit payment on or before December
after December 31, 1983).
contribution bears to the total amount
31, 1984) and had irrevocably elected
paid to or for such account or annuity.
Exclusion rules for pension, etc.,
the form of the benefit before July 18,
For more information, see Regulations
plans. If an annuity under an approved
1984, or
section 20.2039-5.
plan described in (a) through (e) above
Had separated from service before
is receivable by a beneficiary other than
Rules applicable to all approved
January 1, 1985, and did not change the
the executor and the decedent made no
plans. The following rules apply to all
form of benefit before death.
Part Instructions
-31-

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