Instructions For Form 706 - 2016 Page 35
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54The expenses deductible on this
Note. The marital deduction is
1. The value of any property that
schedule are limited to those that are
generally not allowed if the surviving
does not pass from the decedent to the
the result of settling the decedent's
spouse is not a U.S. citizen. The marital
surviving spouse;
interest in the property or of vesting
deduction is allowed for property
2. Property interests that are not
good title to the property in the
passing to such a surviving spouse in a
included in the decedent's gross estate;
beneficiaries. Expenses incurred on
qualified domestic trust (QDOT) or if
3. The full value of a property
behalf of the transferees (except those
such property is transferred or
interest for which a deduction was
described earlier) are not deductible.
irrevocably assigned to such a trust
claimed on Schedules J through L. The
Examples of deductible and
before the estate tax return is filed. The
value of the property interest should be
nondeductible expenses are provided in
executor must elect QDOT status on the
reduced by the deductions claimed with
Regulations section 20.2053-8(d).
return. See the instructions that follow
respect to it;
for details on the election.
List the names and addresses of the
4. The full value of a property
Property Interests That You
persons to whom each expense was
interest that passes to the surviving
May List on Schedule M
payable and the nature of the expense.
spouse subject to a mortgage or other
Identify the property for which the
encumbrance or an obligation of the
Generally, you may list on Schedule M
expense was incurred by indicating the
surviving spouse. Include on
all property interests that pass from the
schedule and item number where the
Schedule M only the net value of the
decedent to the surviving spouse and
property is included in the gross estate.
interest after reducing it by the amount
are included in the gross estate.
If you do not know the exact amount of
of the mortgage or other debt;
However, do not list any nondeductible
the expense, you may deduct an
terminable interests (described later) on
5. Nondeductible terminable
estimate, provided that the amount may
Schedule M unless you are making a
interests (described later); or
be verified with reasonable certainty
QTIP election. The property for which
6. Any property interest disclaimed
and will be paid before the period of
you make this election must be included
by the surviving spouse.
limitations for assessment (referred to
on Schedule M. See Qualified
earlier) expires. Keep all vouchers and
Terminable Interests
terminable interest property, later.
receipts for inspection by the IRS.
Certain interests in property passing
For the rules on common disaster
from a decedent to a surviving spouse
Schedule M—Bequests,
and survival for a limited period, see
are referred to as terminable interests.
section 2056(b)(3).
etc., to Surviving Spouse
These are interests that will terminate or
(Marital Deduction)
You may list on Schedule M only
fail after the passage of time, or on the
those interests that the surviving spouse
occurrence or nonoccurrence of a
If any assets to which the
takes:
designated event. Examples are: life
special rule of Regulations
!
estates, annuities, estates for terms of
1. As the decedent's legatee,
section 20.2010-2(a)(7)(ii)
years, and patents.
devisee, heir, or donee;
CAUTION
applies are reported on this schedule,
2. As the decedent's surviving
do not enter any value in the last three
The ownership of a bond, note, or
tenant by the entirety or joint tenant;
columns. See instructions for line 23 of
other contractual obligation, which when
3. As an appointee under the
Part 5–Recapitulation for information on
discharged would not have the effect of
decedent's exercise of a power or as a
how to estimate and report the value of
an annuity for life or for a term, is not
taker in default at the decedent's
these assets.
considered a terminable interest.
nonexercise of a power;
Nondeductible terminable interests.
General
4. As a beneficiary of insurance on
Unless you are making a QTIP election,
You must complete Schedule M and file
the decedent's life;
do not enter a terminable interest on
it with the return if you claim a deduction
5. As the surviving spouse taking
Schedule M if:
on Part 5—Recapitulation, item 21.
under dower or curtesy (or similar
1. Another interest in the same
statutory interest); and
property passed from the decedent to
The marital deduction is authorized
6. As a transferee of a transfer
some other person for less than
by section 2056 for certain property
made by the decedent at any time.
adequate and full consideration in
interests that pass from the decedent to
money or money's worth; and
the surviving spouse. You may claim the
Property Interests That You
deduction only for property interests that
2. By reason of its passing, the
May Not List on Schedule M
are included in the decedent's gross
other person or that person's heirs may
estate (Schedules A through I).
enjoy part of the property after the
Do not list on Schedule M:
Example—Listing Property Interests on Schedule M
Item
Description of property interests passing to surviving spouse.
Amount
number
For securities, give CUSIP number. If trust, partnership, or closely-held entity, give EIN.
All other property:
B1
One-half the value of a house and lot, 256 South West Street, held by decedent and surviving spouse as joint tenants
with right of survivorship under deed dated July 15, 1975 (Schedule E, Part I, item 1)
$182,500
. . . . . . . . . . . . . . . . . .
B2
Proceeds of Metropolitan Life Insurance Company policy No. 104729, payable in one sum to surviving spouse
(Schedule D, item 3)
200,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
B3
Cash bequest under Paragraph Six of will
100,000
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part Instructions
-35-
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