Instructions For Form 706 - 2016 Page 48
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54or beneficiaries. A person is the
state, or local conservation policy and
subordinate to or directly supportive of
beneficiary of a trust only if he or she
will yield a significant public benefit.
the use of the land as a farm for farming
has a present interest in the trust. For
purposes.
Specific Instructions
additional information, see the
Note. If the value of the retained
ownership rules in section 2057(e)(3).
Line 1
development rights reported on line 7
If the land is reported as one or more
was different at the time the easement
Qualified Conservation Easement
item numbers on a Form 706 schedule,
was contributed than at the date of
simply list the schedule and item
death, see the Caution at the beginning
A qualified conservation easement is
numbers. If the land subject to the
of the Schedule U Instructions.
one that would qualify as a qualified
easement is only part of an item,
conservation contribution under section
You do not have to make this
however, list the schedule and item
170(h). It must be a contribution:
reduction if everyone with an interest in
number and describe the part subject to
Of a qualified real property interest,
the land (regardless of whether in
the easement. See the Instructions for
To a qualified organization, and
possession) agrees to permanently
Schedule A — Real Estate for
Exclusively for conservation
extinguish the retained development
information on how to describe the land.
purposes.
right. The agreement must be filed with
Qualified real property interest. A
this return and must include the
Line 3
qualified real property interest is any of
following information and terms:
Using the general rules for describing
the following:
1. A statement that the agreement is
The entire interest of the donor, other
real estate, provide enough information
made under section 2031(c)(5);
than a qualified mineral interest;
so the IRS can value the easement.
2. A list of all persons in being
A remainder interest; or
Give the date the easement was
holding an interest in the land that is
A restriction granted in perpetuity on
granted and by whom it was granted.
subject to the qualified conservation
the use that may be made of the real
easement. Include each person's name,
property. The restriction must include a
Line 4
address, tax identifying number,
prohibition on more than a de minimis
Enter on this line the gross value at
relationship to the decedent, and a
use for commercial recreational activity.
which the land was reported on the
description of their interest;
Qualified organization. A qualified
applicable asset schedule on this Form
3. The items of real property shown
organization includes:
706. Do not reduce the value by the
on the estate tax return that are subject
Corporations and any community
amount of any mortgage outstanding.
to the qualified conservation easement
chest, fund, or foundation, organized
Report the estate tax value even if the
(identified by schedule and item
and operated exclusively for religious,
easement was granted by the decedent
number);
charitable, scientific, testing for public
(or someone other than the decedent)
4. A description of the retained
safety, literary, or educational purposes,
prior to the decedent's death.
development right that is to be
or to foster national or international
Note. If the value of the land reported
extinguished;
amateur sports competition, or for the
on line 4 was different at the time the
prevention of cruelty to children or
5. A clear statement of consent that
easement was contributed than that
animals, without net earnings benefitting
is binding on all parties under applicable
reported on Form 706, see the Caution
any individual shareholder and without
local law:
at the beginning of the Schedule U
activity with the purpose of influencing
a. To take whatever action is
Instructions.
legislation or political campaigning,
necessary to permanently extinguish
which
the retained development rights listed in
Line 5
a. Receives more than one-third of its
the agreement and
The amount on line 5 should be the date
support from gifts, contributions,
b. To be personally liable for
of death value of any qualifying
membership fees, or receipts from
additional taxes under section 2031(c)
conservation easements granted prior
sales, admissions fees, or performance
(5)(C) if this agreement is not
to the decedent's death, whether
of services, or
implemented by the earlier of:
granted by the decedent or someone
b. Is controlled by such an
• The date that is 2 years after the
other than the decedent, for which the
organization.
date of the decedent's death or
exclusion is being elected.
Any entity that qualifies under section
• The date of sale of the land subject
170(b)(1)(A)(v) or (vi).
Note. If the value of the easement
to the qualified conservation
reported on line 5 was different at the
easement;
Conservation purpose. An easement
time the easement was contributed than
has a conservation purpose if it is for:
6. A statement that in the event this
at the date of death, see the Caution at
The preservation of land areas for
agreement is not timely implemented,
the beginning of the Schedule U
outdoor recreation by, or for the
that they will report the additional tax on
Instructions.
education of, the public;
whatever return is required by the IRS
The protection of a relatively natural
and will file the return and pay the
Line 7
habitat of fish, wildlife, or plants, or a
additional tax by the last day of the 6th
similar ecosystem; or
You must reduce the land value by the
month following the applicable date
The preservation of open space
value of any development rights
described above.
(including farmland and forest land)
retained by the donor in the conveyance
where such preservation is for the
All parties to the agreement must
of the easement. A development right is
scenic enjoyment of the general public,
sign the agreement.
any right to use the land for any
or under a clearly delineated federal,
commercial purpose that is not
-48-
Part Instructions
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