Instructions For Form 706 - 2016 Page 32

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approved plans described in
by treating the distribution as taxable on
IF . . .
THEN . . .
paragraphs (a) through (h) earlier.
his or her income tax return as
described in Regulations section
If any part of an annuity under a
the annuity is payable
include the date of
20.2039-4(d). The election is
for the life of a person
birth of that person.
“plan” described in (a) through (h)
irrevocable.
other than the
earlier is receivable by the executor, it is
decedent,
generally includible in the gross estate
The amount excluded from the gross
to the extent that it is receivable by the
estate is the portion attributable to the
the annuity is wholly or
enter the amount
executor in that capacity. In general, the
employer contributions. The portion, if
partially excluded from
excluded under
annuity is receivable by the executor if it
any, attributable to the
the gross estate,
“Description” and
is to be paid to the executor or if there is
employee-decedent's contributions is
explain how you
an agreement (expressed or implied)
always includible. Also, you may not
figured the exclusion.
that it will be applied by the beneficiary
figure the gross estate in accordance
for the benefit of the estate (such as in
with this election unless you check
discharge of the estate's liability for
“Yes” on line A and attach the name,
Schedule J—Funeral
death taxes or debts of the decedent,
address, and identifying number of the
etc.) or that its distribution will be
Expenses and Expenses
recipients of the lump sum distributions.
governed to any extent by the terms of
See Regulations section 20.2039-4(d)
Incurred in Administering
the decedent's will or the laws of
(2).
Property Subject to Claims
descent and distribution.
How To Complete Schedule I
If data available to you does not
Use Schedule PC to make a
In describing an annuity, give the name
indicate whether the plan satisfies the
protective claim for refund for
!
and address of the grantor of the
requirements of section 401(a), 403(a),
expenses which are not
annuity. Specify if the annuity is under
408(a), 408(b), or 409(a), you may
CAUTION
currently deductible under section 2053.
an approved plan.
obtain that information from the IRS
For such a claim, report the expense on
office where the employer's principal
Schedule J but without a value in the
IF . . .
THEN . . .
place of business is located.
last column.
the annuity is under an
state the ratio of the
Line A. Lump Sum Distribution
approved plan,
decedent's
General. Complete and file Schedule J
Election
contribution to the
if you claim a deduction on item 14 of
total purchase price of
Part 5—Recapitulation.
Note. The following rules have been
the annuity.
repealed and apply only if the decedent:
On Schedule J, itemize funeral
expenses and expenses incurred in
On December 31, 1984, was both a
the decedent was
state the ratio of the
employed at the time
decedent's
administering property subject to
participant in the plan and in pay status
of death and an
contribution to the
claims. List the names and addresses of
(for example, had received at least one
annuity as described
total purchase price of
persons to whom the expenses are
benefit payment on or before December
in Definitions, Annuity,
the annuity.
payable and describe the nature of the
31, 1984) and had irrevocably elected
Example 4, above,
expense. Do not list expenses
the form of the benefit before July 18,
became payable to
incurred in administering property
1984, or
any beneficiary
not subject to claims on this
Had separated from service before
because the
schedule. List them on Schedule L
January 1, 1985, and did not change the
beneficiary survived
instead.
form of benefit before death.
the decedent,
Generally, the entire amount of any
The deduction is limited to the
lump sum distribution is included in the
an annuity under an
state the ratio of the
amount paid for these expenses that is
individual retirement
amount paid for the
decedent's gross estate. However,
allowable under local law but may not
account or annuity
individual retirement
under this special rule, all or part of a
exceed:
became payable to
account or annuity
lump sum distribution from a qualified
1. The value of property subject to
any beneficiary
that was not allowable
(approved) plan will be excluded if the
claims included in the gross estate, plus
because that
as an income tax
lump sum distribution is included in the
beneficiary survived
deduction under
2. The amount paid out of property
recipient's income for income tax
the decedent and is
section 219 (other
included in the gross estate but not
purposes.
payable to the
than a rollover
subject to claims. This amount must
beneficiary for life or
contribution) to the
If the decedent was born before
actually be paid by the due date of the
for at least 36 months
total amount paid for
1936, the recipient may be eligible to
estate tax return.
following the
the account or annuity.
elect special “10-year averaging” rules
decedent's death,
The applicable local law under which
(under repealed section 402(e)) and
the estate is being administered
capital gain treatment (under repealed
the annuity is payable
the description should
determines which property is and is not
section 402(a)(2)) in figuring the income
out of a trust or other
be sufficiently
subject to claims. If under local law a
tax on the distribution. For more
fund,
complete to fully
particular property interest included in
information, see Pub. 575, Pension and
identify it.
the gross estate would bear the burden
Annuity Income. If this option is
for the payment of the expenses, then
available, the estate tax exclusion
the annuity is payable
include the duration of
the property is considered property
cannot be claimed unless the recipient
for a term of years,
the term and the date
subject to claims.
elects to forego the “10-year averaging”
on which it began.
and capital gain treatment in figuring the
Unlike certain claims against the
income tax on the distribution. The
estate for debts of the decedent (see
recipient elects to forego this treatment
the instructions for Schedule K), you
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Part Instructions

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