Instructions For Form 706 - 2016 Page 39
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54the decedent's death under the
The date of birth of all life tenants or
If the foreign government refuses to
provisions of section 2031(c)(9).
annuitants, the length of whose lives
certify Form 706-CE, file it directly with
may affect the value of the interest
the IRS as instructed on the Form
The charitable deduction is allowed
passing to charity under the decedent's
706-CE. See Form 706-CE for
for amounts that are transferred to
will;
instructions on how to complete the
charitable organizations as a result of
A statement showing the value of all
form and a description of the items that
either a qualified disclaimer (see Line 2.
property that is included in the
must be attached to the form when the
Qualified Disclaimer, later) or the
decedent's gross estate but does not
foreign government refuses to certify it.
complete termination of a power to
pass under the will, such as transfers,
consume, invade, or appropriate
The credit for foreign death taxes is
jointly-owned property that passed to
property for the benefit of an individual.
allowable only if the decedent was a
the survivor on decedent's death, and
It does not matter whether termination
citizen or resident of the United States.
insurance payable to specific
occurs because of the death of the
However, see section 2053(d) and the
beneficiaries;
individual or in any other way. The
related regulations for exceptions and
Any agreements with charitable
termination must occur within the period
limitations if the executor has elected, in
beneficiaries, whether entered before or
of time (including extensions) for filing
certain cases, to deduct these taxes
after date of death of the decedent;
the decedent's estate tax return and
from the value of the gross estate. For a
Verification of the sale or purchase of
before the power has been exercised.
resident, not a citizen, who was a citizen
property that is the subject of a
or subject of a foreign country for which
The deduction is limited to the
charitable deduction; and
the President has issued a proclamation
amount actually available for charitable
Any other important information such
under section 2014(h), the credit is
uses. Therefore, if under the terms of a
as that relating to any claim, not arising
allowable only if the country of which the
will or the provisions of local law, or for
under the will, to any part of the estate
decedent was a national allows a similar
any other reason, the federal estate tax,
(that is, a spouse claiming dower or
credit to decedents who were U.S.
the federal GST tax, or any other estate,
curtesy, or similar rights).
citizens residing in that country.
GST, succession, legacy, or inheritance
Line 2. Qualified Disclaimer
tax is payable in whole or in part out of
The credit is authorized either by
The charitable deduction is allowed for
any bequest, legacy, or devise that
statute or by treaty. If a credit is
amounts that are transferred to
would otherwise be allowed as a
authorized by a treaty, whichever of the
charitable organizations as a result of a
charitable deduction, the amount you
following is the most beneficial to the
qualified disclaimer. To be a qualified
may deduct is the amount of the
estate is allowed:
disclaimer, a refusal to accept an
bequest, legacy, or devise reduced by
The credit figured under the treaty;
interest in property must meet the
the total amount of the taxes.
The credit figured under the statute;
conditions of section 2518. These are
or
If you elected to make installment
explained in Regulations sections
The credit figured under the treaty,
payments of the estate tax, and the
25.2518-1 through 25.2518-3. If
plus the credit figured under the statute
interest is payable out of property
property passes to a charitable
for death taxes paid to each political
transferred to charity, you must reduce
beneficiary as the result of a qualified
subdivision or possession of the treaty
the charitable deduction by an estimate
disclaimer, check the “Yes,” box on
country that are not directly or indirectly
of the maximum amount of interest that
line 2 and attach a copy of the written
creditable under the treaty.
will be paid on the deferred tax.
disclaimer required by section 2518(b).
Under the statute, the credit is
For split-interest trusts or pooled
Attachments
authorized for all death taxes (national
income funds, only the figure that is
If the charitable transfer was made by
and local) imposed in the foreign
passing to the charity should be entered
will, attach a certified copy of the order
country. Whether local taxes are the
in the “Amount” column. Do not enter
admitting the will to probate, in addition
basis for a credit under a treaty depends
the entire amount that passes to the
to the copy of the will. If the charitable
upon the provisions of the particular
trust or fund.
transfer was made by any other written
treaty.
If you are deducting the value of the
instrument, attach a copy. If the
If a credit for death taxes paid in
residue or a part of the residue passing
instrument is of record, the copy should
more than one foreign country is
to charity under the decedent's will,
be certified; if not, the copy should be
allowable, a separate computation of
attach a copy of the computation
verified.
the credit must be made for each
showing how you determined the value,
Value
foreign country. The copies of
including any reduction for the taxes
Schedule P on which the additional
described earlier.
The valuation dates used in determining
computations are made should be
the value of the gross estate apply also
Also include:
attached to the copy of Schedule P
on Schedule O.
A statement that shows the values of
provided in the return.
all specific and general legacies or
Schedule P—Credit for
devises for both charitable and
The total credit allowable for any
Foreign Death Taxes
noncharitable uses. For each legacy or
property, whether subjected to tax by
devise, indicate the paragraph or
one or more than one foreign country, is
General
section of the decedent's will or codicil
limited to the amount of the federal
that applies. If legacies are made to
If you claim a credit on line 13 of Part
estate tax attributable to the property.
each member of a class (for example,
2—Tax Computation, complete
The anticipated amount of the credit
$1,000 to each of the decedent's
Schedule P and file it with the return.
may be figured on the return, but the
employees), show only the number of
Attach Form(s) 706-CE to Form 706 to
credit cannot finally be allowed until the
each class and the total value of
support any credit you claim.
foreign tax has been paid and a Form
property they received;
706-CE evidencing payment is filed.
Part Instructions
-39-
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