Instructions For Form 706-Gs(D-1) - 2016 (Page 5 of 5) in pdf

Qualified terminable interest

death tax actually paid by the trust

transfers into a trust for the rule on how

property. For qualified terminable

attributable to such property) and any

to refigure the inclusion ratio.

interest property (QTIP) that is included

charitable deduction allowed with

Paperwork Reduction Act Notice.

in the estate of the surviving spouse of

respect to such property and

We ask for the information on this form

the settlor because of section 2044,

2. The value of all property in the

to carry out the Internal Revenue laws of

unless a special QTIP election has been

trust immediately before the current

the United States. You are required to

made under section 2652(a)(3), the

transfer.

give us the information. We need it to

surviving spouse is considered the

ensure that you are complying with

transferor under section 2652(a) for

Charitable lead annuity trusts. For

these laws and to allow us to figure and

GST purposes, and the value is the

distributions from a charitable lead

collect the right amount of tax.

estate tax value in the estate of the

annuity trust, the numerator of the

surviving spouse.

applicable fraction is the adjusted GST

You are not required to provide the

exemption as defined below. The

A special QTIP election allows

information requested on a form that is

denominator is the value of the trust

property for which a QTIP election was

subject to the Paperwork Reduction Act

immediately after termination of the

made for estate or gift tax purposes to

unless the form displays a valid OMB

charitable lead annuity.

be treated for GST tax purposes as if

control number. Books or records

this QTIP election had not been made. If

The adjusted GST exemption is the

relating to a form or its instructions must

the special QTIP election has been

sum of:

be retained as long as their contents

made, the predeceased settlor spouse

may become material in the

1. The exemption allocated to the

is the transferor and the value is that

administration of any Internal Revenue

trust and

spouse's estate or gift tax value under

law. Generally, tax returns and return

2. Interest on the exemption

the rules described above. Either the

information are confidential, as required

determined at the interest rate used to

settlor spouse or the executor of the

by section 6103.

figure the estate or gift deduction for the

settlor spouse's estate must make the

charitable lead annuity and for the

The time needed to complete and file

special QTIP election.

actual period of the charitable lead

this form will vary depending on

ETIP. If an individual could not make

annuity.

individual circumstances. The estimated

a timely allocation of exemption

average time is:

In the case of a late allocation, the

because of an ETIP, the value of the

amount of interest accrued prior to the

property for the purpose of computing

Recordkeeping

1 hr., 33 min.

. . . . .

date of allocation is zero.

the inclusion ratio is the estate tax value

Learning about the

if the property is includible in the

Column e. Value

law or the form

1 hr., 46 min.

. . .

transferor's gross estate. If the property

Enter the value of the property

is not includible in the transferor's gross

Preparing the

distributed from the trust at the time of

estate, the property is valued at the

form

42 min.

. . . . . . . . . . .

distribution.

close of the ETIP, provided that the GST

Copying,

exemption is allocated on a timely filed

Part III—Trust Information

assembling, and

gift tax return for the calendar year in

sending the form

which the ETIP closes.

Line 4

to the IRS

20 min.

. . . . . . .

Multiple transfers into a trust. When

An arrangement that has substantially

a transfer is made to a pre-existing trust,

the same effect as a trust will be treated

the applicable fraction must be

as a trust even though it is not an

If you have comments concerning the

recomputed. The numerator of the new

explicit trust. Examples of such

accuracy of these time estimates or

fraction is the sum of:

arrangements are insurance and

suggestions for making this form

annuity contracts, arrangements

1. The exemption allocated to the

simpler, we would be happy to hear

involving life estates and remainders,

current transfer and

from you. You can send us comments

and estates for years. Nonexplicit trusts

2. The nontax portion of the trust

from Click on

do not include decedent's estates.

immediately before the current transfer

"More Information" and then on "Give us

(the product of the applicable fraction

feedback." You can also send your

In the case of a nonexplicit trust, the

and the value of all of the property in the

comments to the Internal Revenue

trustee is the person in actual or

trust immediately before the current

Service, Tax Forms and Publications

constructive possession of the property

transfer).

Division, 1111 Constitution Ave. NW,

involved.

IR-6526, Washington, DC 20224. Do

The denominator of the new fraction

Line 5

not send the tax form to this address.

is the sum of:

Instead, see Where To File.

Whenever property is transferred into a

1. The value of the current transfer

pre-existing trust, the inclusion ratio

(minus any federal estate tax or state

must be refigured. See Multiple

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Instructions For Form 706-Gs(D-1) - 2016 Page 5

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