Instructions for

Form 706-QDT

(Rev. September 2021)

U.S. Estate Tax Return for Qualified Domestic Trusts

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue 

Code unless otherwise noted.

Future Developments

For the latest information about 

developments related to Form 706-QDT 

and its instructions, such as legislation 

enacted after they were published, go to 

IRS.gov/Form706QDT.

General Instructions

Purpose of Form

The trustee or designated filer 

(described below) of a qualified 

domestic trust (QDOT) uses Form 

706-QDT to figure and report the estate 

tax due on:

• Certain distributions from the 

QDOT,

• The value of the property remaining 

in the QDOT on the date of the 

surviving spouse's death, and

• The corpus portion of certain 

annuity payments.

Under certain circumstances, the 

trustee/designated filer uses Form 

706-QDT to notify the IRS that the trust 

is exempt from future filing because the 

surviving spouse has become a U.S. 

citizen and meets the requirements 

listed under Part II—Elections by the 

Trustee/Designated Filer, Line 4. 

Spousal election, later.

The QDOT rules apply only in those 

situations where a decedent's surviving 

spouse is not a U.S. citizen.

Who Must File

Either the trustee or the designated filer, 

as described below, must file Form 

706-QDT for any year in which the 

QDOT has a taxable event (defined 

below) or makes a distribution on 

account of hardship.

Trustee

If the surviving spouse is the beneficiary 

of only one QDOT, the trustee of that 

QDOT is liable for filing Form 706-QDT 

and paying the tax.

The trustee must also file Form 

706-QDT if the surviving spouse is the 

beneficiary of more than one QDOT, 

unless the decedent's executor 

designated one U.S. trustee as the 

designated filer.

If there is more than one trustee for 

any single trust, each trustee is liable for 

filing the return and paying the tax.

If there is a designated filer, the 

trustee must still complete a separate 

Schedule B of Form 706-QDT for each 

trust for which he or she is the trustee 

and provide the completed Schedule B 

to the designated filer at least 60 days 

before the due date for filing Form 

706-QDT.

Designated Filer

If the surviving spouse is the beneficiary 

of more than one QDOT from a single 

decedent, and the decedent's executor 

has made such a designation, then the 

designated filer selected by the 

executor is liable for filing the return and 

paying the tax for all QDOTs. This 

designation can be made on either the 

decedent's estate tax return or the first 

Form 706-QDT that is timely filed.

In this case, the trustee of each 

QDOT is responsible for completing 

Schedule B of Form 706-QDT for his or 

her trust and giving it to the designated 

filer.

Definitions

Qualified domestic trust. A qualified 

domestic trust (QDOT) is any trust that 

qualifies for an estate tax marital 

deduction under section 2056 and also 

meets all of the following requirements.

• The trust instrument requires that at 

least one trustee be either a U.S. 

citizen or a domestic corporation.

• The trust instrument requires that no 

distribution of corpus from the trust 

may be made unless the trustee 

who is a U.S. citizen or a domestic 

corporation has the right to withhold 

from the distribution the QDOT tax 

imposed on the distribution.

• The QDOT election under section 

2056A(d) has been made for the 

trust by the executor of the estate 

on the decedent's estate tax return.

• The requirements of all applicable 

regulations have been met.

Taxable event. A taxable event is any 

of the following.

1. Any distribution from a QDOT (and 

certain annuity payments) before 

the death of the surviving spouse, 

except:

a. Distributions of income to the 

surviving spouse, and

b. Any distributions made to the 

surviving spouse on account of 

hardship.

2. The death of the surviving spouse.

3. The failure of the trust to qualify as 

a QDOT.

Hardship distribution. A distribution 

of principal is treated as made on 

account of hardship if it is made to the 

spouse from the QDOT in response to 

an immediate and substantial financial 

need relating to the spouse's health, 

maintenance, education, or support, or 

the health, maintenance, education, or 

support of any person that the surviving 

spouse is legally obligated to support.

Decedent. In these instructions, 

decedent means the grantor of the 

QDOT on whose estate tax return the 

executor makes the QDOT election.

Surviving spouse. In these 

instructions, surviving spouse means 

the individual who is both the surviving 

spouse of the decedent and also the 

beneficiary of the decedent's QDOT.

Note. The term “spouse” includes an 

individual married to a person of the 

same sex if the couple is lawfully 

married under state (or foreign) law. 

See Rev. Rul. 2013-17, 2013-38 I.R.B. 

201, available at Rev. Rul. 2013-17, for 

more details.

When To File

Form 706-QDT is an annual return.

Generally, the return to report 

distributions is due on or after January 1 

but not later than April 15 of the year 

following any calendar year in which a 

taxable event occurred or a distribution 

was made on account of hardship.

However, if you are filing the return 

because of the death of the surviving 

Aug 11, 2021 Cat. No. 12384F
spouse, you must file it within 9 months 

following the date of death. You must 

also report on that return all reportable 

distributions made during the calendar 

year in which the surviving spouse died. 

This rule may result in a return being 

due before April 15. For example, if the 

surviving spouse died on June 14, 

2020, Form 706-QDT would be due 

March 14, 2021, and must include all 

reportable distributions made during 

2020.

If the trust ceases to qualify as a 

QDOT, you must file Form 706-QDT 

within 9 months of the date on which the 

trust ceased to qualify. You must 

include on that return any reportable 

distributions made during the calendar 

year of the failure to qualify.

Use Form 4768, Application for 

Extension of Time To File a Return 

and/or Pay U.S. Estate (and 

Generation-Skipping Transfer) Taxes, to 

apply for an automatic 6-month 

extension of time to file Form 706-QDT. 

Check the “Form 706-QDT” box in Part 

II of Form 4768.

Note. An extension of time to file does 

not extend the time to pay the tax.

Private delivery services (PDSs). 

You can use certain PDSs designated 

by the IRS to meet the "timely mailing as 

timely filing/paying" rule for tax returns 

and payments. Go to IRS.gov/PDS for 

the current list of designated services.

The PDS can tell you how to get 

written proof of the mailing date.

For the IRS mailing address to use if 

you’re using a PDS, go to IRS.gov/

PDSStreetAddresses.

PDSs can’t deliver items to P.O. 

boxes. You must use the U.S 

Postal Service to mail any item 

to an IRS P.O. box address.

Where To File

File Form 706-QDT at the following 

address.

Department of the Treasury

Internal Revenue Service Center

Kansas City, MO 64999

If using a PDS, use this address.

Internal Revenue Submission 

Processing Center

333 W. Pershing

Kansas City, MO 64108

CAUTION

!

Paying the Tax

Generally, the QDOT estate tax is due 

by April 15 of the year following the 

calendar year in which taxable 

distributions were made. However, if the 

surviving spouse died during the year or 

if the trust ceased to qualify as a QDOT 

during the year, the tax on those events 

and on any taxable distributions 

occurring during that calendar year is 

due within 9 months following the date 

of death or the failure to qualify.

If the QDOT qualifies, you may elect 

under section 6166 to pay the tax in 

installments. You may make either a 

protective or final election by checking 

“Yes” on line 3 of Part II—Elections by 

the Trustee/Designated Filer, and 

attaching the required statements. See 

the instructions under Line 3. 

Installment payments, later, for 

additional information.

Make the check payable to “United 

States Treasury.” Write the surviving 

spouse's social security number (SSN) 

(or individual taxpayer identification 

number (ITIN), if applicable) and “Form 

706-QDT” on the check to assist us in 

posting it to the proper account.

Signature(s)

If the trustee is filing the return and there 

is more than one trustee listed, all listed 

trustees must verify the return. All 

trustees are responsible for the return 

as filed and are liable for penalties 

provided for erroneous or false returns.

The trustee/designated filer who files 

the return must, in every case, sign the 

declaration on page 1 under penalties of 

perjury. The trustee/designated filer 

may use Form 2848, Power of Attorney 

and Declaration of Representative, to 

authorize another person to act for him 

or her before the IRS.

Paid Preparer Use Only

Generally, anyone who is paid to 

prepare the return must sign the return 

in the space provided and fill in the Paid 

Preparer Use Only area.

A paid preparer cannot use a social 

security number in the Paid Preparer 

Use Only box. The paid preparer must 

use their valid preparer tax identification 

number (PTIN). In addition to signing 

and completing the required 

information, the paid preparer must give 

a copy of the completed return to the 

trustee/designated filer.

Supplemental Documents

You must attach a copy of the trust 

instrument to the first Form 706-QDT 

filed for the trust. You do not need to 

attach a copy of the trust to any 

subsequent filings of Form 706-QDT.

If you are filing the return due to the 

death of the surviving spouse, attach a 

copy of the death certificate.

Penalties

Section 6651 provides penalties for both 

late filing and for late payment unless 

there is reasonable cause for the delay. 

The law also provides penalties for 

willful attempts to evade payment of tax.

Section 6662 provides penalties for 

underpayment of estate taxes which 

exceed $5,000 that are attributable to 

valuation understatements. See 

sections 6662(g) and (h) for more 

details.

Return preparer. Estate tax return 

preparers who prepare any return or 

claim for refund that reflects an 

understatement of tax liability due to an 

unreasonable position are subject to a 

penalty equal to the greater of $1,000 or 

50% of the income earned (or to be 

earned) for the preparation of each such 

return. Estate tax return preparers who 

prepare any return or claim for refund 

that reflects an understatement of tax 

liability due to willful or reckless conduct 

are subject to a penalty of $5,000 or 

75% of the income derived (or income 

to be derived), whichever is greater, for 

the preparation of each such return. See 

section 6694(a) and 6694(b), the related 

regulations, and Announcement 

2009-15, 2009-11 I.R.B. 687, available 

at Announcement 2009-15, for more 

information.

Security for Payment of 

the Tax

Assets in Excess of $2 Million

If the estate tax value of the assets 

passing to the QDOT exceeds $2 

million (determined without regard to 

any indebtedness), the trust instrument 

must require that the trust meet at least 

one of the following conditions at all 

times during the term of the QDOT.

• At least one U.S. trustee must be a 

bank as defined in section 581.

• The U.S. trustee must furnish a 

bond in favor of the IRS in an 

amount equal to 65% of the fair 

market value (FMV) of the trust 

assets.

• The U.S. trustee must furnish an 

irrevocable letter of credit issued by 

a bank in an amount equal to 65% 

of the FMV of the trust assets.

-2- Instructions for Form 706-QDT (Rev. 9-2021)
The trust instrument may also meet 

this requirement by specific reference to 

the applicable paragraph of Regulations 

section 20.2056A-2(d).

The QDOT may alternate between 

any of these arrangements provided 

that one of the arrangements is 

operative at any given time. The QDOT 

may give the trustee the discretion to 

use any one of the security 

arrangements, or may limit the trustee to 

using only one or two of the 

arrangements.

Assets of $2 Million or Less

If the estate tax value of the assets 

passing to the QDOT is $2 million or 

less (determined without regard to any 

indebtedness), the trust instrument must 

require that the trust meet at least one of 

the following conditions at all times 

during the term of the QDOT.

• No more than 35% of the FMV of 

trust assets, determined annually on 

the last day of the tax year of the 

trust, will consist of real property 

located outside the United States.

• The trust will meet the requirements 

described above for QDOTs with 

assets in excess of $2 million.

For this purpose, if more than one 

QDOT is established for the benefit of 

the surviving spouse, the value of all of 

the QDOTs is aggregated in 

determining whether the $2 million 

threshold is exceeded.

Personal Residence

For the purpose of (1) figuring the $2 

million threshold, and (2) determining 

the amount of any bond or letter of 

credit, the executor of the decedent's 

estate may elect to exclude up to 

$600,000 in the value of real property 

that meets the following requirements.

• It is used by or held for the use of 

the surviving spouse as a personal 

residence.

• It is owned directly by the QDOT.

• It passed or was treated as passing 

to the QDOT under the rules for the 

marital deduction when the 

surviving spouse is not a U.S. 

citizen (section 2056(d)(2)(B)).

The $600,000 may include the value 

of any related furnishings.

Either election may have been made 

by the executor on the estate tax return 

for the decedent's estate. The election 

to exclude the personal residence 

amount from the amount of the bond or 

letter of credit may also be made 

prospectively by the U.S. trustee by 

attaching a statement to Form 706-QDT 

claiming the exclusion. This election, 

whether made by the executor or by a 

trustee, may be canceled by attaching 

such a statement to Form 706-QDT.

Filing a Bond or Letter of Credit

If the bond or letter of credit 

arrangement is selected, the executor 

must have filed the bond or letter of 

credit with the Form 706 or 706-NA on 

which the QDOT election is made.

The U.S. trustee must provide a 

written statement with the bond or letter 

of credit listing the assets that will fund 

the QDOT, the values of the assets, and 

whether any exclusion for a personal 

residence is being claimed.

Additional Information

For more information, including 

additional requirements for a bond and 

letter of credit, details on the exclusion 

of a personal residence, rules on the 

disallowance of the marital deduction for 

substantial undervaluation of QDOT 

property, rules regarding foreign real 

property, and certain annual reporting 

requirements (concerning ownership of 

foreign real property, cessation of use of 

a personal residence, and look-through 

rules applied to the ownership of foreign 

real property), see Regulations section 

20.2056A-2(d).

How To Complete Form 

706-QDT

Trustee Filing the Return

If the trustee is filing the complete 

return, prepare it in the following order.

1. Part I—General Information on 

page 1.

2. Part II—Elections by the Trustee/

Designated Filer on page 1.

3. All of Schedule B (but only lines 1a 

and 1b of Part I).

4. Schedule A.

5. Part III—Tax Computation on 

page 1.

Enter only the totals from Parts II 

through VI of Schedule B in the 

corresponding “Total” lines of

Schedule A.

Trustee Completing Schedule B 

Only

If a designated filer will file the return, 

the trustee must complete all applicable 

parts of Schedule B for his or her 

respective trust and provide it to the 

designated filer at least 60 days before 

the due date for filing Form 706-QDT.

Designated Filer Filing the 

Return

The designated filer must receive a 

completed Schedule B from the trustee 

of every QDOT that has had a 

reportable event or a hardship 

distribution during the tax year. The 

designated filer would then summarize 

these on Schedule A.

Complete the return in the following 

order.

1. Part I—General Information on 

page 1.

2. Part II—Elections by the Trustee/

Designated Filer on page 1.

3. Schedule A.

4. Part III—Tax Computation on 

page 1.

Attach each Schedule B to the return 

when you file it.

If there is not enough space on a 

schedule to list all the items, attach an 

additional sheet of the same size to the 

back of the schedule.

Rounding Off to Whole Dollars

You may round off cents to whole 

dollars on the return and schedules. If 

you do round to whole dollars, you must 

round all amounts. To round, drop 

amounts under 50 cents and increase 

amounts from 50 cents to 99 cents to 

the next dollar. For example, $1.39 

becomes $1 and $2.50 becomes $3.

Specific Instructions

Part I—General 

Information

If trustee files entire return—Lines 

2a, 2b, and 2c. If the trustee is filing 

the entire return, enter the trustee's 

information on lines 2a, 2b, and 2c.

Line 2b. If the trustee/designated filer 

is an individual, enter his or her SSN. 

Otherwise, enter the employer 

identification number (EIN) of the 

trustee/designated filer.

Line 2c. Enter the address at which 

you wish to receive correspondence 

from the IRS regarding this return. This 

must be an address for the designated 

filer, or if the trustee is filing the return, 

one of the individual trustees who is a 

U.S. citizen or a trustee that is a 

domestic corporation.

Line 3b. Enter the taxpayer 

identification number (TIN) of the 

surviving spouse. The TIN is the SSN or 

ITIN.

Instructions for Form 706-QDT (Rev. 9-2021) -3-
Line 4a. Enter the name of the 

decedent on whose estate tax return the 

QDOT election was made.

Line 4b. Enter the SSN of the decedent 

or, if applicable, the number previously 

assigned to the decedent's estate by the 

service center.

Part II—Elections by the 

Trustee/Designated Filer

If this return is being filed because of the 

death of the surviving spouse, and any 

property remaining in the QDOT at that 

time is includible in the estate of the 

surviving spouse (or would be includible 

if the surviving spouse had been a U.S. 

citizen or resident), then the trustee/

designated filer may elect to apply 

certain estate tax benefits on this return, 

provided the estate of the surviving 

spouse would be eligible for these 

benefits.

Line 1. Alternate valuation. Unless 

you elect at the time you file this return 

to adopt alternate valuation under 

section 2032, then you must value all 

property of all trusts listed on 

Schedule A, Part III, on the date of the 

surviving spouse's death.

Note. You may not elect alternate 

valuation for any property reported on 

Schedule A, Parts I and II.

You may not elect alternate valuation 

unless the election will decrease both 

the value of the Schedule A, Part III 

property, and the net tax due on the 

return.

A designated filer filing for multiple 

trusts must make this election for all of 

the Schedule A, Part III property in all of 

the trusts, taken as a whole. The 

election cannot be made unless the 

requirements are met for all of the 

property.

You elect alternate valuation by 

checking “Yes” on line 1 and filing Form 

706-QDT. Once made, the election is 

irrevocable.

If you elect alternate valuation, you 

must value all of the property to which 

the election applies as of the applicable 

date as follows.

1. Any property distributed, sold, 

exchanged, or otherwise disposed 

of by any method within 6 months 

after the surviving spouse's death is 

valued on the date of distribution, 

sale, exchange, or other 

disposition, whichever occurs first. 

Value the property on the date title 

passed as a result of the sale, 

exchange, or other disposition.

2. Any property not distributed, sold, 

exchanged, or otherwise disposed 

of within the 6-month period is 

valued on the date 6 months after 

the date of the surviving spouse's 

death.

3. Any property that is “affected by 

mere lapse of time” is valued as of 

the date of the surviving spouse's 

death. However, you may change 

the date of death value to account 

for any change in value that is not 

due to “mere lapse of time” on the 

date of its distribution, sale, 

exchange, or other disposition.

For additional details, see Part 

3—Elections by the Executor in the 

separate Instructions for Form 706.

Line 2. Special use valuation of section 2032A. Under section 2032A, you 

may elect to value certain farm and 

closely held business real property at its 

farm or business use value rather than 

its FMV. You may elect both special use 

valuation and alternate valuation. To 

elect this valuation, you must check 

“Yes” on line 2 and complete and attach 

Schedule A-1 of Form 706 and its 

required additional statements.

You must file Schedule A-1 of 

Form 706 and its required 

attachments with Form 

706-QDT for this election to be valid.

The total value of the property valued 

under section 2032A may not be 

decreased from FMV by more than 

$1,190,000 for decedents dying in 

2021. For later years, the IRS will 

publish the amount in an annual 

revenue procedure.

Real property may qualify for the 

section 2032A election if:

1. The real property is located in the 

United States,

2. The real property is used for 

farming or in a trade or business,

3. The real property was acquired 

from or passed from the surviving 

spouse to a qualified heir of the 

surviving spouse,

4. The real property was owned and 

used in a qualified manner by the 

surviving spouse or a member of 

the surviving spouse's family for 5 

of the 8 years before the surviving 

spouse's death, and

5. The qualified property is the 

percentage of the surviving 

spouse's gross estate specified in 

section 2032A.

CAUTION

!

For definitions and additional 

information, see section 2032A and the 

related regulations. Also see Part 

3—Elections by the Executor and the 

Instructions for Schedule A-1, in the 

Instructions for Form 706.

Line 3. Installment payments. If the 

gross estate includes an interest in a 

closely held business, you may be able 

to elect to pay part of the estate tax in 

installments under section 6166.

The maximum amount that can be 

paid in installments is that part of the 

estate tax that is attributable to the 

closely held business. See Determine 

how much of the estate tax may be paid 

in installments under section 6166 

under Line 3. Section 6166 Installment 

Payments in the separate Instructions 

for Form 706. In general, that amount is 

the amount of tax that bears the same 

ratio to the total estate tax that the value 

of the closely held business included in 

the gross estate bears to the adjusted 

gross estate.

If you check this line to make a 

protective election, you should attach a 

notice of protective election as 

described in Regulations section 

20.6166-1(d).

If you check this line to make a final 

election, you should attach the notice of 

election described in Regulations 

section 20.6166-1(b).

In computing the adjusted gross 

estate under section 6166(b)(6) for 

purposes of determining whether an 

election may be made under section 

6166, the net amount of any real estate 

in a closely held business must be used.

For definitions and additional 

information, see section 6166 and the 

related regulations. Also see the Form 

706 instructions for Part 3—Elections by 

the Executor and Line 3. Section 6166 

Installment Payments for a worksheet 

on how to calculate the amount of tax 

which may be paid in installments under 

section 6166.

Bond or lien. The IRS may require that 

an estate furnish a surety bond when 

granting the installment payment 

election. In the alternative, the executor 

may consent to elect the special lien 

provisions of section 6324A in lieu of the 

bond. The IRS will contact you 

regarding the specifics of furnishing the 

bond or electing the special lien. The 

IRS will make this determination on a 

case-by-case basis, and you may be 

asked to provide additional information.

If you elect the lien provisions, 

section 6324A requires that the lien be 

placed on property having a value equal 

-4- Instructions for Form 706-QDT (Rev. 9-2021)
to the total deferred tax plus 4 years of 

interest. The property must be expected 

to survive the deferral period, and does 

not necessarily have to be property of 

the estate. In addition, all of the persons 

having an interest in the designated 

property must consent to the creation of 

this lien on the property pledged.

Line 4. Spousal election. If the 

surviving spouse has become a U.S. 

citizen, the QDOT tax will not apply to 

any distributions made after the 

surviving spouse became a citizen as 

long as either:

• The surviving spouse had been a 

U.S. resident at all times after the 

death of the decedent and before 

becoming a citizen, or

• No QDOT tax had been imposed on 

any distributions prior to the 

surviving spouse becoming a 

citizen.

You should file a final Form 706-QDT 

to notify the IRS that the QDOT tax no 

longer applies for this reason.

If the surviving spouse does not meet 

either of the conditions above, the 

QDOT tax will still not apply to 

distributions after he or she becomes a 

citizen if the surviving spouse elects 

both:

• To treat any distributions that were 

subject to QDOT tax as taxable gifts 

for purposes of determining the 

estate or gift tax under sections 

2001 and 2501, respectively, for the 

year the surviving spouse became a 

citizen and all subsequent years; 

and

• To treat any of the decedent's 

unified credit (applicable credit 

amount) that was used to reduce 

the QDOT tax on taxable 

distributions as use of the surviving 

spouse's own unified credit for 

purposes of determining the 

spouse's available unified credit 

under section 2505 for the year he 

or she became a citizen and for all 

subsequent years.

To make these elections, check 

“Yes” on line 4 and attach notification of 

the election to this return.

Schedule B

Part I—General Information

If the trustee is filing the entire return, 

the trustee needs to complete only lines 

1a and 1b of this part of Schedule B (but 

all of Parts II through VI). When 

completing Part I on page 1, enter the 

remaining trustee's information on lines 

2a, 2b, and 2c.

Line 1b. All trusts filing Form 706-QDT 

must have an EIN. If you don’t have an 

EIN, you may apply for one online by 

visiting the IRS website at IRS.gov/EIN. 

You may also apply for an EIN by faxing 

or mailing Form SS-4 to the IRS. If the 

EIN has not been received by the filing 

time for Form 706-QDT, write “Applied 

for” on line 1b.

Line 2a. You must enter on this line 

either the name of an individual trustee 

who is a U.S. citizen or a trustee that is 

a domestic corporation. If there is more 

than one trustee, enter the one to be 

contacted by the IRS. List the names of 

all additional trustees on a sheet of 

paper attached to this return. Include 

the SSN or EIN of all U.S. citizens or 

domestic corporations.

Line 2b. Enter the SSN or EIN, as 

applicable, of the trustee listed on 

line 2a.

Part II—Taxable Distributions 

From Prior Years

Enter here the total of all taxable 

distributions that were or should have 

been reported on previously filed Forms 

706-QDT.

Part III—Current Taxable 

Distributions

You must report on Part III the total 

amount of corpus distributed during the 

calendar year or other period covered 

by this return and before the date of 

death of the surviving spouse. Include 

as a distribution any QDOT estate tax 

paid during the calendar year out of the 

QDOT. Include all distributions even if 

the hardship exemption is being 

claimed.

Also, include as distributions in this 

part any reportable payments to the 

surviving spouse from nonassignable 

annuities and other arrangements when 

the executor has filed with the estate tax 

return for the decedent's estate an 

agreement to pay section 2056A estate 

tax on such distributions. For details, 

see Regulations section 20.2056A-4(c).

Column A. Date of distribution. The 

date of distribution is the date on which 

the title to the distributed property 

passed from the trustee to the surviving 

spouse.

Column B. Description. Include in the 

description the name of the individual(s) 

to whom the distribution was made.

Real estate. Describe the real 

estate in enough detail so that the IRS 

can easily locate it for inspection and 

valuation. For each parcel of real estate, 

report the location and, if the parcel is 

improved, describe the improvements. 

For city or town property, report the 

street number, ward, subdivision, block 

and lot, etc. For rural property, report 

the township, range, landmarks, etc.

Stocks. For stocks, give:

• Number of shares;

• Whether common or preferred;

• Issue;

• Par value, where needed for 

valuation;

• Price per share;

• Exact name of corporation;

• Principal exchange upon which 

sold, if listed on an exchange; and

• CUSIP number (defined below).

If the stock is unlisted, show the 

company's principal business office.

Bonds. For bonds, give:

• Quantity and denomination;

• Name of obligor;

• Date of maturity;

• Interest rate;

• Interest due date;

• Principal exchange, if listed on an 

exchange; and

• CUSIP number.

If the bond is unlisted, show the 

company's principal business office.

CUSIP number. The CUSIP 

(Committee on Uniform Security 

Identification Procedure) number is a 

nine-digit number that is assigned to all 

stocks and bonds traded on major 

exchanges and many unlisted 

securities. Usually, the CUSIP number 

is printed on the face of the stock 

certificate. If the CUSIP number is not 

printed on the certificate, it may be 

obtained through the company's 

transfer agent.

Other personal property. Any 

personal property distributed must be 

described in enough detail that its value 

can be ascertained by the IRS.

Column C. Value. The value of a 

distribution is its FMV on the date of 

distribution. FMV is the price at which 

the property would change hands 

between a willing buyer and a willing 

seller, when neither is forced to buy or 

to sell, and both have reasonable 

knowledge of all the relevant facts. FMV 

may not be determined by a forced sale 

price, nor by the sale price of the item in 

a market other than that in which the 

item is most commonly sold to the 

public. The location of the item must be 

taken into account whenever relevant.

Stocks and bonds. The FMV of a 

stock or bond (whether listed or 

Instructions for Form 706-QDT (Rev. 9-2021) -5-
unlisted) is the mean between the 

highest and lowest selling prices quoted 

on the valuation date. If only the closing 

selling prices are available, then the 

FMV is the mean between the quoted 

closing selling price on the valuation 

date and on the trading day before the 

valuation date. If there were no sales on 

the valuation date, figure the FMV as 

follows.

1. Find the mean between the highest 

and lowest selling prices on the 

nearest trading day before and the 

nearest trading day after the 

valuation date. Both trading days 

must be reasonably close to the 

valuation date.

2. Prorate the difference between the 

mean prices to the valuation date.

3. Add or subtract (whichever 

applies).

See the Instructions for Schedule B, 

in the Instructions for Form 706 for 

additional information on valuing stocks 

and bonds.

Column D. Amount of hardship exemption claimed. Distributions to the 

surviving spouse on account of hardship 

are exempt from the QDOT tax. Enter in 

column D the amount of any distribution 

for which the hardship exemption is 

being claimed. Do not enter any amount 

here that has not been included in the 

amount listed in column C. Also, if the 

surviving spouse is the beneficiary of 

more than one QDOT, you may not 

claim the hardship exemption unless the 

decedent's executor selected a 

designated filer. See Designated Filer, 

earlier.

Part IV—Taxable Property in 

Trust at Death of Surviving 

Spouse

You must report in Part IV all property 

remaining in the QDOT on the date of 

death of the surviving spouse (or the 

date the trust failed to qualify as a 

QDOT, if applicable). This includes both 

corpus and undistributed income.

Interest accrued to the date of the 

surviving spouse's death on bonds, 

notes, and other interest-bearing 

obligations is property of the QDOT on 

the date of death. Rent accrued to the 

date of the surviving spouse's death on 

leased real and personal property is 

property of the QDOT on the date of 

death.

Outstanding dividends that were 

declared to stockholders of record on or 

before the date of the surviving 

spouse's death are considered property 

of the QDOT on the date of death. 

Ordinary dividends declared to 

stockholders of record after the date of 

the surviving spouse's death are not 

property of the QDOT on the date of 

death. However, if you have elected 

alternate valuation on line 1 of Part II, 

page 1, and dividends are declared to 

stockholders of record after the date of 

the surviving spouse's death so that the 

shares of stock at the later valuation 

date do not reasonably represent the 

same property at the date of the 

surviving spouse's death, include those 

dividends (except dividends paid from 

earnings of the corporation after the 

date of the surviving spouse's death) in 

the alternate valuation.

If there is not enough space to list all 

of the property, attach additional sheets 

of the same size, using the same format 

as Part IV.

Column A. Item no. Assign a separate 

item number to each separate type of 

property. For example, you can include 

under a single item number all stock of 

the same issuer and type, but must list 

separate types (for example, preferred 

and common) under separate item 

numbers.

Column B. Description. See the 

instructions under Part III—Current 

Taxable Distributions, Column B. 

Description, earlier.

Column C. Alternate valuation date. 

If this return involves only one trust, 

enter the alternate valuation date only if 

you answered “Yes” to question 1 of 

Part II—Elections by the Trustee/

Designated Filer.

If the designated filer is filing this 

return for multiple trusts, the individual 

trustees will complete Part IV, but only 

the designated filer can elect alternate 

valuation. To allow the designated filer 

to make this decision, the trustee must 

provide on an attachment to Schedule B 

both the regular and the alternate value 

(and the alternate valuation date) for all 

assets, unless the designated filer has 

notified the trustee that this is not 

required.

Column D. Value. See the instructions 

under Part III—Current Taxable 

Distributions, Column C. Value, earlier.

Parts V and VI—Marital and 

Charitable Deductions

Marital and charitable deductions are 

allowable for any property that both 

remained in the QDOT on the date of 

the surviving spouse's death and was 

includible in the gross estate of the 

surviving spouse (or would have been 

includible if the surviving spouse had 

been a U.S. citizen or resident).

Do not make an entry in Parts V and 

VI unless there is an entry in Part IV of 

Schedule B. Also, the sum of the total of 

the amounts entered in Parts V and VI 

cannot exceed the total of the amount 

entered in Part IV of Schedule B.

For details on the marital and 

charitable deductions, see the 

instructions for Schedule M and 

Schedule O, in the Instructions for Form 

706, as applicable.

Schedule A

When a designated filer is filing Form 

706-QDT for more than one trust, use 

Schedule A to summarize the 

Schedule B amounts provided by the 

trustees. Under “EIN of QDOT” (that is, 

column A of Parts II, III, and IV), enter 

the EIN of the appropriate trust. If the 

trustee is filing the return, simply 

transfer the totals from Schedule B to 

the corresponding “Total” lines on 

Schedule A.

Part III—Tax Computation 

(Page 1 of Form 706-QDT)

Line 7. Enter the amount of the taxable 

estate from one of the following as filed 

for the decedent's estate or as finally 

determined by the IRS.

• Part 2—Tax Computation, line 3 of 

Form 706 (for estates of decedents 

dying before January 1, 2005).

• Part 2—Tax Computation, line 3c of 

Form 706 (for estates of decedents 

dying on or after January 1, 2005).

• Part II—Tax Computation, line 1 of 

Form 706-NA.

Lines 10 and 11. Using the same 

revision of Form 706 or Form 706-NA on 

which the executor filed the decedent's 

estate tax return, recompute the 

decedent's net estate tax by substituting 

the amounts on line 9 and line 8 of this 

Form 706-QDT for the decedent's 

taxable estate from one of the following.

• Part 2—Tax Computation, line 3 of 

Form 706 (for estates of decedents 

dying before January 1, 2005).

• Part 2—Tax Computation, line 3c of 

Form 706 (for estates of decedents 

dying on or after January 1, 2005).

• Part II—Tax Computation, line 1 of 

Form 706-NA.

Prior year versions of Forms 706 and 

706-NA can be obtained by calling 

800-TAX-FORM (800-829-3676) or by 

accessing the IRS website at

IRS.gov.

-6- Instructions for Form 706-QDT (Rev. 9-2021)
Note that as a result of the 

recomputation, some items other than 

the taxable estate might be different 

from what was on the decedent's actual 

estate tax return. If the decedent's 

estate did not fully use its unified credit, 

additional unified credit may be 

allowable in the recomputation.

If the decedent's estate claimed a 

credit for tax on prior transfers and the 

credit was limited by section 2013(c), 

the recomputed credit may be different 

than on the return as filed.

Also, if the decedent's estate claimed 

a credit for state death taxes (for 

decedents dying before January 1, 

2005) or a credit for foreign death taxes 

and the amount of the credit that could 

be claimed was limited by section 

2011(b) (prior to its repeal on January 1, 

2005) or section 2014(b), respectively, 

the recomputed credit may be different.

If the final determination of the tax 

due on the estate of the decedent has 

not been made at the time this return is 

filed, you must figure the tax on these 

lines using the highest rate of tax (see 

Table of Maximum Tax Rates below) in 

effect at the time of the decedent's 

death.

Also, if there is more than one QDOT 

with respect to any decedent, you must 

figure the tax on lines 10 and 11 using 

the highest rate of tax (see Table of 

Maximum Tax Rates below) in effect at 

the time of the decedent's death unless 

all of the following conditions are met.

• The decedent's executor has 

designated a single person to be 

responsible for filing Form 706-QDT 

for all of the trusts (designated filer).

• The designated filer is either an 

individual who is a U.S. citizen or is 

a domestic corporation.

• The designated filer meets the 

requirements of all applicable 

regulations.

Further, if the return is being filed 

because of the death of the surviving 

spouse, then in figuring line 10, any 

foreign death taxes paid by the estate of 

the surviving spouse may be used in 

determining the allowable credits in 

recomputing the decedent's estate tax, 

if all of the following conditions are met.

1. This return is being filed because of 

the death of the surviving spouse.

2. Any property remaining in the 

QDOT at that time is includible in 

the estate of the surviving spouse 

(or would be includible if the 

surviving spouse had been a U.S. 

citizen or resident).

3. The credit is allowable (or would be 

allowable if the surviving spouse 

had been a U.S. citizen or resident) 

to the estate of the surviving 

spouse with respect to the property 

referred to in (2), above.

4. The taxes were actually paid to a 

foreign jurisdiction.

For details on claiming this credit, 

see the Instructions for Form 706. If you 

claim the foreign death tax credit, you 

must complete and attach Schedule P 

of Form 706.

Table of Maximum Tax Rates

If the decedent died ....

The 

maximum 

tax rate 

is ......

After December 31, 2004, 

but before January 1, 2006

 47%

After December 31, 2005, 

but before January 1, 2007

 46%

After December 31, 2006, 

but before January 1, 2010

 45%

After December 31, 2009, 

but before January 1, 2013

 35%*

After December 31, 2012 40%

* Special rules can apply for 2010. For more 

information, see Pub. 4895, Tax Treatment 

of Property Acquired From a Decedent 

Dying in 2010.

Line 14. Make the check payable to 

“United States Treasury.” Please write 

the surviving spouse's SSN (or ITIN, if 

applicable) and “Form 706-QDT” on the 

check to assist us in posting it to the 

proper account.

Paperwork Reduction Act Notice. 

We ask for the information on this form 

to carry out the Internal Revenue laws of 

the United States. We need it to ensure 

that you are complying with these laws 

and to allow us to figure and collect the 

right amount of tax.

You are not required to provide the 

information requested on a form that is 

subject to the Paperwork Reduction Act 

unless the form displays a valid OMB 

control number. Books or records 

relating to a form or its instructions must 

be retained as long as their contents 

may become material in the 

administration of any Internal Revenue 

law. Generally, tax returns and return 

information are confidential as required 

by section 6103.

The time needed to complete and file 

this form will vary depending on 

individual circumstances. The estimated 

average time is:

Recordkeeping..... 1 hr., 12 min.

Learning about the 

law or the form..... 42 min.

Preparing the 

form ............. 1 hr., 30 min.

Copying, 

assembling, and 

sending the form to 

the IRS ........... 1 hr., 3 min.

If you have comments concerning the 

accuracy of these time estimates or 

suggestions for making this form 

simpler, we would be happy to hear 

from you. You can send us comments 

through IRS.gov/FormComments. Or 

you can write to:

Internal Revenue Service

Tax Forms and Publications

1111 Constitution Ave. NW, 

IR-6526

Washington, DC 20224

Do not send the tax form to this 

address. Instead, see Where To File, 

earlier.

Instructions for Form 706-QDT (Rev. 9-2021) -7-