Instructions For Form 706-Gs(T) - 2016 (Page 5 of 8) in pdf

If the addition results from a

printed on the certificate, it may be

If there is more than one termination

generation-skipping transfer, reduce

obtained through the company's

during the year, you must reduce the

both the numerator and denominator by

transfer agent.

total expense used in the allocation by

the amount of any GST tax imposed on

the expense allocated to the prior

Other personal property. Any

the transfer and recovered from the

terminations. For example, assume that

interest in personal property involved in

trust.

the total administrative expense for the

a termination must be described in

year was $1,000 and $300 was

Round off the allocation fraction to

enough detail that the IRS can value it.

allocated to the first termination. The

five decimal places (for example,

Column d. Valuation date. Unless

expense allocated to the second

“.00123”).

termination would be a percentage of

you elected alternate valuation by

Column a. Item no. Identify by

$700, not of the entire $1,000.

checking the box on line 3 of

separate item number all property in

Schedule A, the valuation date should

Schedule B(2)—Specific

which an interest has terminated during

be the same as the termination date.

Termination-Related Debts,

the tax year. You may combine under

Column e. Value. Reduce the value of

the same item number all property that

Expenses, and Taxes

any property being reported on

has the same termination date,

Report here only those expenses

Schedule A by the amount of any

valuation date, and unit value, such as

related solely to the interest that has

consideration provided by the skip

stocks or bonds. Otherwise, assign a

terminated. Examples of these

person.

separate item number to each article of

expenses are property tax on real

property.

Explain how the values reported in

estate, the cost of selling property, or

column e were figured and attach

Column b. Description of property.

attorney's fees for defending the title to

copies of any appraisals.

Describe each article of property

property.

assigned an item number as follows:

Schedules B(1) and B(2)

Column a. Item no. Assign an item

number to each separate expense. This

Real estate. Describe the real

To figure the taxable amount for a

will not necessarily correspond with the

estate in enough detail so that the IRS

taxable termination, you may deduct

item numbers on Schedule A.

can easily locate it for inspection and

expenses similar to those deductible

valuation. For each parcel of real estate,

under section 2053 from the value of the

Column b. Description. List the

report the area and, if the parcel is

property subject to the termination.

names and addresses of persons to

improved, describe the improvements.

whom the expenses are payable and

Schedule B(1)—General Trust

For city or town property, report the

describe the nature of the expense. List

Debts, Expenses, and Taxes

street number, ward, subdivision, block

the item number(s) from Schedule A to

and lot, etc. For rural property, report

Report here only those expenses

which the expense relates.

the township, range, landmarks, etc.

related to the entire trust. Examples of

Column c. Amount. If the expense

such expenses are trustee's fees,

Stocks and bonds. For stocks,

relates to more property than that

administrative expenses, financial

give:

involved in the termination but less than

advisor's fees, and accounting fees.

Number of shares;

the entire trust, enter in column c only

Whether common or preferred;

Column a. Item no. Assign an item

the amount attributable to the property

Issue;

number to each separate expense.

involved in the termination. Determine

Par value where needed for

These will not necessarily correspond

this amount by multiplying the total

valuation;

with the item numbers on Schedule A.

expense times a fraction. The

Price per share;

numerator of the fraction is the value of

Column b. Description. List the

Exact name of corporation;

the property involved in the termination

names and addresses of persons to

Principal exchange upon which sold,

and to which the expense relates. The

whom the expenses are payable and

if listed on an exchange; and

denominator is the total value of the

describe the nature of the expenses.

CUSIP number.

property to which the expense relates.

Column c. Amount. Enter here the

For bonds, give:

Schedule A (Lines 5–10)

entire amount of the expense for the tax

Quantity and denomination;

year for which the return is being filed.

Name of obligor;

Line 7. Inclusion Ratio

Date of maturity;

Line 2. Figure the percentage of

Principal exchange, if listed on an

The trustee must figure the inclusion

expense to allocate to the property

exchange;

ratio for every termination. All

involved in the termination as follows.

Interest rate;

terminations, or any parts of a single

1. Divide the value of the interest

Interest due date; and

termination, that have different inclusion

that has been terminated by the total

CUSIP number.

ratios must be shown on separate

value of the trust at the time of the

Schedules A. Identify the separate

If the stock or bond is unlisted, show

termination; and

trusts by Schedule A number when

the company's principal business office.

2. Multiply the result by a fraction,

showing your inclusion ratio calculation.

The CUSIP (Committee on Uniform

the numerator of which is the number of

Security Identification Procedure)

The inclusion ratio is the excess of 1

days in the year through the date of the

number is a nine-digit number assigned

over the applicable fraction determined

termination, and the denominator of

to all stocks and bonds traded on major

for the trust in which the termination

which is the total number of days in the

exchanges and many unlisted

occurred.

year (or, if the entire trust was

securities. Usually, the CUSIP number

terminated during the year, the total

Applicable fraction. The applicable

is printed on the face of the stock

number of days the trust was in

fraction is a fraction, the numerator of

certificate. If the CUSIP number is not

existence during the year).

which is the amount of the GST

-5-

Instructions For Form 706-Gs(T) - 2016 Page 5

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