Instructions For Form 706 - 2016 Page 37
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54an amended return to make the election
requires that all trustees be individuals
Election to Deduct Qualified Termi-
unless you file the amended return on or
who are citizens of the United States or
nable Interest Property Under Sec-
before the due date for filing the original
domestic corporations.
tion 2056(b)(7). If a trust (or other
Form 706.
property) meets the requirements of
You make the QDOT election simply
qualified terminable interest property
by listing the qualified domestic trust or
The effect of the election is that the
under section 2056(b)(7), and
the entire value of the trust property on
property (interest) will be treated as
Schedule M and deducting its value.
passing to the surviving spouse and will
1. The trust or other property is
You are presumed to have made the
not be treated as a nondeductible
listed on Schedule M, and
QDOT election if you list the trust or
terminable interest. All of the other
2. The value of the trust (or other
trust property and insert its value on
marital deduction requirements must
property) is entered in whole or in part
Schedule M. Once made, the election
still be satisfied before you may make
as a deduction on Schedule M,
is irrevocable.
this election. For example, you may not
then unless the executor specifically
make this election for property or
If an election is made to deduct
identifies the trust (all or a fractional
property interests that are not included
qualified domestic trust property under
portion or percentage) or other property
in the decedent's gross estate.
section 2056A(d), provide the following
to be excluded from the election, the
information for each qualified domestic
Qualified terminable interest proper-
executor shall be deemed to have made
trust on an attachment to this schedule:
ty. Qualified terminable interest
an election to have such trust (or other
1. The name and address of every
property is property (a) that passes from
property) treated as qualified terminable
trustee;
the decedent, (b) in which the surviving
interest property under section 2056(b)
spouse has a qualifying income interest
2. A description of each transfer
(7).
for life, and (c) for which election under
passing from the decedent that is the
If less than the entire value of the
section 2056(b)(7) has been made.
source of the property to be placed in
trust (or other property) that the
trust; and
The surviving spouse has a
executor has included in the gross
qualifying income interest for life if the
3. The employer identification
estate is entered as a deduction on
surviving spouse is entitled to all of the
number (EIN) for the trust.
Schedule M, the executor shall be
income from the property payable
considered to have made an election
The election must be made for an
annually or at more frequent intervals, or
only as to a fraction of the trust (or other
entire QDOT trust. In listing a trust for
has a usufruct interest for life in the
property). The numerator of this fraction
which you are making a QDOT election,
property, and during the surviving
is equal to the amount of the trust (or
unless you specifically identify the
spouse's lifetime no person has a power
other property) deducted on
trust as not subject to the election,
to appoint any part of the property to
Schedule M. The denominator is equal
the election will be considered made
any person other than the surviving
to the total value of the trust (or other
for the entire trust.
spouse. An annuity is treated as an
property).
The determination of whether a trust
income interest regardless of whether
Qualified Domestic Trust
qualifies as a QDOT will be made as of
the property from which the annuity is
the date the decedent's Form 706 is
payable can be separately identified.
Election (QDOT)
filed. If, however, judicial proceedings
Regulations sections 20.2044-1 and
The marital deduction is allowed for
are brought before the Form 706's due
20.2056(b)-7(d)(3) state that an interest
transfers to a surviving spouse who is
date (including extensions) to have the
in property is eligible for QTIP treatment
not a U.S. citizen only if the property
trust revised to meet the QDOT
if the income interest is contingent upon
passes to the surviving spouse in a
requirements, then the determination
the executor's election even if that
qualified domestic trust (QDOT) or if
will not be made until the court-ordered
portion of the property for which no
such property is transferred or
changes to the trust are made.
election is made will pass to or for the
irrevocably assigned to a QDOT before
benefit of beneficiaries other than the
the decedent's estate tax return is filed.
Election to Deduct Qualified Domes-
surviving spouse.
tic Trust Property Under Section
A QDOT is any trust:
2056A. If a trust meets the requirement
The QTIP election may be made for
of a qualified domestic trust under
all or any part of qualified terminable
1. That requires at least one trustee
section 2056A(a), the return is filed no
interest property. A partial election must
to be either a citizen of the United
later than 1 year after the time
relate to a fractional or percentile share
States or a domestic corporation;
prescribed by law (including
of the property so that the elective part
2. That requires that no distribution
extensions), and the entire value of the
will reflect its proportionate share of the
of corpus from the trust can be made
trust or trust property is listed and
increase or decline in the whole of the
unless such a trustee has the right to
entered as a deduction on Schedule M,
property when applying section 2044 or
withhold from the distribution the tax
then unless the executor specifically
2519. Thus, if the interest of the
imposed on the QDOT;
identifies the trust to be excluded from
surviving spouse in a trust (or other
3. That meets the requirements of
the election, the executor shall be
property in which the spouse has a
any applicable regulations; and
deemed to have made an election to
qualified life estate) is qualified
4. For which the executor has made
have the entire trust treated as qualified
terminable interest property, you may
an election on the estate tax return of
domestic trust property.
make an election for a part of the trust
the decedent.
(or other property) only if the election
Line 1
relates to a defined fraction or
Note. For trusts created by an
If property passes to the surviving
percentage of the entire trust (or other
instrument executed before November
spouse as the result of a qualified
property). The fraction or percentage
5, 1990, paragraphs 1 and 2 above will
disclaimer, check “Yes,” and attach a
may be defined by means of a formula.
be treated as met if the trust instrument
Part Instructions
-37-
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