United States Estate (and Generation-Skipping

Transfer) Tax Return

Form 706

(Rev. August 2005)

Department of the Treasury Estate of a citizen or resident of the United States (see separate instructions).

Internal Revenue Service

1a Decedent’s first name and middle initial (and maiden name, if any) 1b Decedent’Decedent’s last name 2

3a County, state, and ZIP code, or foreign country, of legal 3b Year domicile established 4 Date of birth Date of de5

residence (domicile) at time of death

6a Name of executor (see page 3 of the instructions) Executor’s address (number and street including apartment o

route; city, town, or post office; state; and ZIP code) and pho

6b

6c Executor’s social security number (see page 3 of the instructions)

7a Name and location of court where will was probated or estate administered 

8 If decedent died testate, check here  and attach a certified copy of the will. 9 If you extended the time to file this Form 

Part 1.—Decedent and Executor

10 If Schedule R-1 is attached, check here 

1 Total gross estate less exclusion (from Part 5, Recapitulation, page 3, item 12) 1

2 Total allowable deductions (from Part 5, Recapitulation, page 3, item 22) 2

3a Tentative taxable estate (before state death tax deduction) (subtract line 2 from line 1) 3a

4 Adjusted taxable gifts (total taxable gifts (within the meaning of section 2503) made by the decedent

after December 31, 1976, other than gifts that are includible in decedent’s gross estate (section 2001(b))) 4

5 Add lines 3c and 4 5

6 Tentative tax on the amount on line 5 from Table A on page 4 of the instructions 6

Total gift tax payable with respect to gifts made by the decedent after December 31, 1976. Include gift

taxes by the decedent’s spouse for such spouse’s share of split gifts (section 2513) only if the decedent

was the donor of these gifts and they are includible in the decedent’s gross estate (see instructions)

7

7

8 Gross estate tax (subtract line 7 from line 6) 8

9 Maximum unified credit (applicable credit amount) against estate tax 9

Adjustment to unified credit (applicable credit amount). (This adjustment

may not exceed $6,000. See page 5 of the instructions.)

10

10

11 Allowable unified credit (applicable credit amount) (subtract line 10 from line 9) 11

Part 2.—Tax Computation

12 Subtract line 11 from line 8 (but do not enter less than zero) 12

15 15

16

Credit for tax on prior transfers (from Schedule Q)

17

18

Total credits (add lines 13 and 14)

19

Net estate tax (subtract line 15 from line 12)

20

Generation-skipping transfer taxes (from Schedule R, Part 2, line 10)

Total transfer taxes (add lines 16 and 17)

Prior payments. Explain in an attached statement

Balance due (or overpayment) (subtract line 19 from line 18)

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of m

it is true, correct, and complete. Declaration of preparer other than the executor is based on all information of which preparer has any knowled

Signature(s) of executor(s) Date

Signature of preparer other than executor Address (and ZIP code) Date

Cat. No. 20548R

To be filed for decedents dying after December 31, 2004, and before January 1, 2006.

Phone no. ( 

b

c

State death tax deduction

Taxable estate (subtract line 3b from line 3a)

3b

3c

Credit for foreign death taxes (from Schedule(s) P). (Attach Form(s)

706-CE.)

13

14

13

14

16

17

18

19

20

For Privacy Act and Paperwork Reduction Act Notice, see page 27 of the separate instructions for this form. Fo
I declare that I am the attorney/ certified public accountant/ enrolled agent (you must check the applicable box) for the e

this return for the executor. I am not under suspension or disbarment from practice before the Internal Revenue Service and am qual

state shown above.

Form 706 (Rev. 8-2005)

Estate of:

Part 3—Elections by the Executor

Please check the “Yes” or “No” box for each question. (See instructions beginning on page 6.) 

1 Do you elect alternate valuation?

2 Do you elect special-use valuation?

If “Yes,” you must complete and attach Schedule A–1.

3 Do you elect to pay the taxes in installments as described in section 6166?

If “Yes,” you must attach the additional information described on page 9 of the instructions.

Do you elect to postpone the part of the taxes attributable to a reversionary or remainder interest as described in

section 6163?

4

Part 4—General Information

Authorization to receive confidential tax information under Regs. sec. 601.504(b)(2)(i); to act as the estate’s representative before the IRS

or oral presentations on behalf of the estate if return prepared by an attorney, accountant, or enrolled agent for the executor:

Name of representative (print or type) State Address (number, street, and room or suite no., city, state, and 

Signature CAF number Date Telephone num

1 Death certificate number and issuing authority (attach a copy of the death certificate to this return).

2 Decedent’s business or occupation. If retired, check here  and state decedent’s former business or occupation.

3 Marital status of the decedent at time of death:

Married

Widow or widower—Name, SSN, and date of death of deceased spouse 

Single

Legally separated

Divorced—Date divorce decree became final 

4a Surviving spouse’s name 4b Social security number 4c Amount received (see page 

Individuals (other than the surviving spouse), trusts, or other estates who receive benefits from the estate (do not include ch

shown in Schedule O) (see instructions).

5

Name of individual, trust, or estate receiving $5,000 or more Identifying number Relationship to decedent Am

All unascertainable beneficiaries and those who receive less than $5,000 

Total

(continued on next page) 

(Note: Please attach the necessary supplemental documents. You must attach th

(See instructions on page 10.)

Please check the “Yes” or “No” box for each question. 

Does the gross estate contain any section 2044 property (qualified terminable interest property (QTIP) from a prior gift or e

(see page 10 of the instructions)?

6

7a Have Federal gift tax returns ever been filed?

If “Yes,” please attach copies of the returns, if available, and furnish the following information:

7b Period(s) covered 7c Internal Revenue office(s) where filed
Form 706 (Rev. 8-2005)

If you answer “Yes” to any of questions 8–16, you must attach additional information as described in the instructions. 

8a Was there any insurance on the decedent’s life that is not included on the return as part of the gross estate?

b Did the decedent own any insurance on the life of another that is not included in the gross estate?

Did the decedent at the time of death own any property as a joint tenant with right of survivorship in which (a) one or 

of the other joint tenants was someone other than the decedent’s spouse, and (b) less than the full value of the prope

included on the return as part of the gross estate? If “Yes,” you must complete and attach Schedule E

9

Did the decedent, at the time of death, own any interest in a partnership or unincorporated business or any stock in an ina

or closely held corporation?

10

11 Did the decedent make any transfer described in section 2035, 2036, 2037, or 2038 (see the instructions for Sched

beginning on page 13 of the separate instructions)? If “Yes,” you must complete and attach Schedule G

12a Were there in existence at the time of the decedent’s death any trusts created by the decedent during his or her lifetim

Were there in existence at the time of the decedent’s death any trusts not created by the decedent under which the dec

possessed any power, beneficial interest, or trusteeship?

b

c Was the decedent receiving income from a trust created after October 22, 1986 by a parent or grandparent?

13 Did the decedent ever possess, exercise, or release any general power of appointment? If “Yes,” you must complete and attach Sched

14 Was the marital deduction computed under the transitional rule of Public Law 97-34, section 403(e)(3) (Economic Recovery Tax Act of 1

If “Yes,” attach a separate computation of the marital deduction, enter the amount on item 20 of the Recapitulation, and 

on item 20 “computation attached.”

Was the decedent, immediately before death, receiving an annuity described in the “General” paragraph of the instruc

for Schedule I? If “Yes,” you must complete and attach Schedule I

15

Part 5—Recapitulation

Item

number Gross estate Alternate value V

1 Schedule A—Real Estate

2 Schedule B—Stocks and Bonds

3 Schedule C—Mortgages, Notes, and Cash

4 Schedule D—Insurance on the Decedent’s Life (attach Form(s) 712)

5 Schedule E—Jointly Owned Property (attach Form(s) 712 for life insurance)

6 Schedule F—Other Miscellaneous Property (attach Form(s) 712 for life insurance)

7 Schedule G—Transfers During Decedent’s Life (att. Form(s) 712 for life insurance)

8 Schedule H—Powers of Appointment

9 Schedule I—Annuities

10 Total gross estate (add items 1 through 9). 

Item

number Deductions 

11

Schedule K—Debts of the Decedent

12

Schedule K—Mortgages and Liens

13

Total of items 13 through 15

14

Allowable amount of deductions from item 16 (see the instructions for item 17 of the Recapitulation)

15

Schedule L—Net Losses During Administration

16

Schedule L—Expenses Incurred in Administering Property Not Subject to Claims

17

Schedule M—Bequests, etc., to Surviving Spouse

18

Schedule O—Charitable, Public, and Similar Gifts and Bequests

19

20

Total allowable deductions (add items 17 through 21). Enter here and on line 2 of the Tax Computation.

Page 3

Schedule U—Qualified Conservation Easement Exclusion

Total gross estate less exclusion (subtract item 11 from item 10). Enter here

and on line 1 of Part 2—Tax Computation

21

22

Schedule J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims

Was the decedent ever the beneficiary of a trust for which a deduction was claimed by the estate of a pre-deceased sp

under section 2056(b)(7) and which is not reported on this return? If “Yes,” attach an explanation

16

Part 4—General Information (continued)

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

If there was a GST taxable termination (under section 2612), attach a statement to explain. Provide a copy of the trust o

creating the trust, and give the name, address, and phone number of the current trustee(s).

If “Yes,” was there a GST taxable termination (under section 2612) upon the death of the decedent?

d
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE A—Real Estate ● For jointly owned property that must be disclosed on Schedule E, see the instructions on the reverse sid

● Real estate that is part of a sole proprietorship should be shown on Schedule F.

● If you elect section 2032A valuation, you must complete Schedule A and Schedule A-1.

Alternate

valuation date

Item

number Description Alternate value 

1

Total from continuation schedules or additional sheets attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 1.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

Sched

(See the instructions on the reverse side.)

● Real estate that is included in the gross estate under section 2035, 2036, 2037, or 2038 should be s

Schedule G.

● Real estate that is included in the gross estate under section 2041 should be shown on Schedule H.
Form 706 (Rev. 8-2005)

In this example, alternate valuation is not adopted; the date of death is January 1, 2005.

Alternate

valuation date

Item

number

Alternat

value Description

House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent

of $2,700 due at end of each quarter, February 1, May 1, August 1, and November

1. Value based on appraisal, copy of which is attached

1

Rent due on item 1 for quarter ending November 1, 2004, but not collected at date

of death 

Rent accrued on item 1 for November and December 2004 

House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $600

payable monthly. Value based on appraisal, copy of which is attached

2

Rent due on item 2 for December 2004, but not collected at date of death 

In this example, alternate valuation is adopted; the date of death is January 1, 2005.

Alternate

valuation date

Item

number

Alternat

value Description

House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent

of $2,700 due at end of each quarter, February 1, May 1, August 1, and

November 1. Value based on appraisal, copy of which is attached. Not disposed of

within 6 months following death

1

7/1/05 90,000 

Rent due on item 1 for quarter ending November 1, 2004, but not collected until

February 1, 2005 2/1/05 2,700 

Rent accrued on item 1 for November and December 2004, collected on

February 1, 2005 2/1/05 1,800 

House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $600

payable monthly. Value based on appraisal, copy of which is attached. Property

exchanged for farm on May 1, 2005

2

5/1/05 90,000 

Rent due on item 2 for December 2004, but not collected until February 1, 2005 2/1/05 600 

Schedule A—Page 5

Instructions for Schedule A—Real Estate

If the total gross estate contains any real estate, you must

complete Schedule A and file it with the return. On

Schedule A, list real estate the decedent owned or had

contracted to purchase. Number each parcel in the

left-hand column.

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 area and, if the

parcel is improved, describe the improvements. For city or

town property, report the street and number, ward,

subdivision, block and lot, etc. For rural property, report

the township, range, landmarks, etc.

Also list on Schedule A real property th

contracted to purchase. Report the full va

property and not the equity in the value c

the unpaid part of the purchase price on 

Report the value of real estate without 

homestead or other exemption, or the va

curtesy, or a statutory estate created inst

curtesy.

If any item of real estate is subject to a mortgage for

which the decedent’s estate is liable; that is, if the

indebtedness may be charged against other property of

the estate that is not subject to that mortgage, or if the

decedent was personally liable for that mortgage, you

must report the full value of the property in the value

Explain how the reported values were d

attach copies of any appraisals.

Schedule A Examples

If the decedent’s estate is NOT liable fo

the mortgage, report only the value of the 

redemption (or value of the property less 

indebtedness) in the value column as par

estate. Do not enter any amount less tha

deduct the amount of indebtedness on S

column. Enter the amount of the mortgag

“Description” on this schedule. The unpa

mortgage may be deducted on Schedule 
Form 706 (Rev. 8-2005)

If the skip person received interests in spec

property that were shown on Schedule R-1, s

on the Schedule R, Parts 2 and 3 worksheets, 

Do not use Schedule R-1 as a worksheet.

Instructions for Schedule A-1. Section

2032A Valuation

The election to value certain farm and closely held business

property at its special-use value is made by checking “Yes” to

line 2 of Part 3, Elections by the Executor, Form 706. Schedule

A-1 is used to report the additional information that must be

submitted to support this election. In order to make a valid

election, you must complete Schedule A-1 and attach all of the

required statements and appraisals.

Completing the Special-Use Value Workshe

and 6, enter -0-.

Completing the Fair Market Value Workshe

fixed taxes and other charges. If valuing the in

market value (instead of special-use value) cau

taxes and charges to increase, enter the incre

on these lines and attach an explanation of th

Otherwise, enter -0-.

For definitions and additional information concerning

special-use valuation, see section 2032A and the related

regulations.

Line 6—GST exemption. If you completed line 

Part 1, enter on line 6 the amount shown for t

the line 10 special-use allocation schedule you 

Schedule R. If you did not complete line 10 of 

Part 1, enter -0- on line 6.

Part 1. Type of Election

Estate and GST Tax Elections. If you elect special-use

valuation for the estate tax, you must also elect special-use

valuation for the GST tax and vice versa.

You must value each specific property interest at the same

value for GST tax purposes that you value it at for estate tax

purposes.

Total GST Tax Savings. For each skip person

amount on line 10, Part 2 of the special-use v

from the tax amount on line 10, Part 2 of the f

worksheet. This difference is the skip person’s 

savings.

Protective Election. To make the protective election described

in the separate instructions for line 2 of Part 3, Elections by the

Executor, you must check this box, enter the decedent’s name

and social security number in the spaces provided at the top of

Schedule A-1, and complete line 1 and column A of lines 3 and

4 of Part 2. For purposes of the protective election, list on line 3

all of the real property that passes to the qualified heirs even

though some of the property will be shown on line 2 when the

additional notice of election is subsequently filed. You need not

complete columns B–D of lines 3 and 4. You need not complete

any other line entries on Schedule A-1. Completing Schedule

A-1 as described above constitutes a Notice of Protective

Election as described in Regulations section 20.2032A-8(b).

Part 3. Agreement to Special Valuatio

Section 2032A

The agreement to special valuation by person

property is required under section 2032A(a)(1)

must be signed by all parties who have any in

property being valued based on its qualified u

of the decedent’s death.

An interest in property is an interest that, as 

decedent’s death, can be asserted under app

as to affect the disposition of the specially val

the estate. Any person who at the decedent’s 

such interest in the property, whether present 

vested or contingent, must enter into the agre

are owners of remainder and executory interes

general or special powers of appointment; ben

over in default of exercise of any such power; 

holders of similar undivided interests when the 

only a joint or undivided interest in the proper

undivided interest is specially valued; and trus

representatives of other entities holding title to

interests in the property. An heir who has the 

law to caveat (challenge) a will and thereby af

the property is not, however, considered to be 

interest in property under section 2032A solely 

right. Likewise, creditors of an estate are not s

solely by reason of their status as creditors.

Part 2. Notice of Election

Line 10. Because the special-use valuation election creates a

potential tax liability for the recapture tax of section 2032A(c),

you must list each person who receives an interest in the

specially valued property on Schedule A-1. If there are more

than eight persons who receive interests, use an additional sheet

that follows the format of line 10. In the columns “Fair market

value” and “Special-use value,” you should enter the total

respective values of all the specially valued property interests

received by each person.

GST Tax Savings

If any person required to enter into the agre

desires that an agent act for him or her or can

himself or herself due to infancy or other inco

to death before the election under section 203

exercised, a representative authorized by loca

person in an agreement of this nature may sig

on his or her behalf.

Because the GST tax depends on the executor’s allocation of

the GST exemption and the grandchild exclusion, the skip

person who receives the interests is unable to compute this GST

tax savings. Therefore, for each skip person who receives an

interest in specially valued property, you must attach worksheets

showing the total GST tax savings attributable to all of that

person’s interests in specially valued property.

The Internal Revenue Service will contact th

designated in the agreement on all matters rel

qualification under section 2032A of the speci

property and on all matters relating to the spe

under section 6324B. It is the duty of the agen

attorney-in-fact for the parties with interests in 

valued property to furnish the IRS with any req

information and to notify the IRS of any dispo

of qualified use of any part of the property.

How To Compute the GST Tax Savings. Before computing

each skip person’s GST tax savings, you must complete

Schedules R and R-1 for the entire estate (using the special-use

values).

For each skip person, you must complete two Schedules R

(Parts 2 and 3 only) as worksheets, one showing the interests in

Schedu

To compute the additional GST tax due upon disposition (or

cessation of qualified use) of the property, each “skip person”

(as defined in the instructions to Schedule R) who receives an

interest in the specially valued property must know the total GST

tax savings on all of the interests in specially valued property

received. This GST tax savings is the difference between the

total GST tax that was imposed on all of the interests in specially

valued property received by the skip person valued at their

special-use value and the total GST tax that would have been

imposed on the same interests received by the skip person had

they been valued at their fair market value.

specially valued property received by the skip 

special-use value and one showing the same 

fair market value.
Form 706 (Rev. 8-2005)

Page 7

Checklist for Section 2032A Election.

To have a valid special-use valuation election under

section 2032A, you must file, in addition to the Federal

estate tax return, (a) a notice of election (Schedule

A-1, Part 2), and (b) a fully executed agreement

(Schedule A-1, Part 3). You must include certain

information in the notice of election. To ensure that the

notice of election includes all of the information

required for a valid election, use the following

checklist. The checklist is for your use only. Do not file

it with the return.

1. Does the notice of election include the decedent’s

name and social security number as they appear on

the estate tax return?

2. Does the notice of election include the relevant

qualified use of the property to be specially valued?

3. Does the notice of election describe the items of

real property shown on the estate tax return that are to

be specially valued and identify the property by the

Form 706 schedule and item number?

4. Does the notice of election include the fair market

value of the real property to be specially valued and

also include its value based on the qualified use

(determined without the adjustments provided in

section 2032A(b)(3)(B))?

5. Does the notice of election include the adjusted

value (as defined in section 2032A(b)(3)(B)) of (a) all

real property that both passes from the decedent and

is used in a qualified use, without regard to whether it

is to be specially valued, and (b) all real property to be

specially valued?

6. Does the notice of election include (a) the items

of personal property shown on the estate tax return

that pass from the decedent to a qualified heir and

that are used in qualified use and (b) the total value of

such personal property adjusted under section

2032A(b)(3)(B)?

7. Does the notice of election include the adjusted

value of the gross estate? (See section 2032A(b)(3)(A).)

8. Does the notice of election include the method

used to determine the special use value?

9. Does the notice of election include copies of

written appraisals of the fair market value of the real

property?

10. Does the notice of election include a statement

that the decedent and/or a member of his or her family

has owned all of the specially valued property for at

11. Does the notice of election includ

as to whether there were any periods d

period preceding the decedent’s date o

which the decedent or a member of his 

did not (a) own the property to be spec

(b) use it in a qualified use, or (c) mate

in the operation of the farm or other bu

section 2032A(e)(6).)

12. Does the notice of election includ

of specially valued property, the name 

taking an interest in that item of specia

property and the following information a

person: (a) the person’s address, (b) th

taxpayer identification number, (c) the p

relationship to the decedent, and (d) th

property interest passing to that person 

fair market value and qualified use?

13. Does the notice of election includ

describing the activities constituting ma

participation and the identity of the mat

participants?

14. Does the notice of election includ

description of each item of specially va

(In the case of an election made for q

woodlands, the information included in 

election must include the reason for en

woodlands election.)

Any election made under section 203

valid unless a properly executed agreem

A-1, Part 3) is filed with the estate tax 

ensure that the agreement satisfies the 

for a valid election, use the following ch

1. Has the agreement been signed by 

every qualified heir having an interest in 

being specially valued?

2. Has every qualified heir expressed 

personal liability under section 2032A(c

an early disposition or early cessation o

3. Is the agreement that is actually si

qualified heirs in a form that is binding 

qualified heirs having an interest in the 

property?

4. Does the agreement designate an 

the parties to the agreement in all deali

IRS on matters arising under section 20

5. Has the agreement been signed by 

agent and does it give the address of t

least 5 years of the 8 years immediately 

date of the decedent’s death? If you are going to make the special-use

valuation election on Schedule A-1, please

use this checklist to ensure that you are

providing everything necessary to make a

valid election. CAUTION
Form 706 (Rev. 8-2005)

Decedent’s Socia

Estate of:

SCHEDULE A-1—Section 2032A Valuation

Part 1. Type of Election (Before making an election, see the checklist on page 7.):

Protective election (Regulations section 20.2032A-8(b)). Complete Part 2, line 1, and column A of lines 3 and 4. (See i

Regular election. Complete all of Part 2 (including line 11, if applicable) and Part 3. (See instructions.)

Part 2. Notice of Election (Regulations section 20.2032A-8(a)(3))

Note. All real property entered on lines 2 and 3 must also be entered on Schedules A, E, F, G, or H, a

Qualified use—check one  Farm used for farming, or



1

Trade or business other than farming

2 Real property used in a qualified use, passing to qualified heirs, and to be specially valued on this Form 706

A B C 

Schedule and item number

from Form 706

Value based 

(without sectio

adju

Adjusted value (with section

2032A(b)(3)(B) 

adjustment)

Totals

Attach a legal description of all property listed on line 2.

Attach copies of appraisals showing the column B values for all property listed on line 2.

3 Real property used in a qualified use, passing to qualified heirs, but not specially valued on this Form 706.

Totals

If you checked “Regular election,” you must attach copies of appraisals showing the column B values for all property 

(continued on next page) Schedu

Full value 

(without section 2032A(b)(3)(B)

adjustment)

A B C 

Schedule and item number

from Form 706

Value based 

(without sectio

adju

Adjusted value (with section

2032A(b)(3)(B) 

adjustment)

Full value 

(without section 2032A(b)(3)(B)

adjustment)

Before completing Schedule A-1, see the checklist on page 7 for the information and documents that must be 

a valid election.

The election is not valid unless the agreement (i.e., Part 3—Agreement to Special Valuation Under Section 2032

● Is signed by each and every qualified heir with an interest in the specially valued property, and

● Is attached to this return when it is filed.
Form 706 (Rev. 8-2005)

4 Personal property used in a qualified use and passing to qualified heirs.

A B A (continued) B (co

Adjuste

section 2

adj

Schedule and item

number from Form 706

Adjusted value (with

section 2032A(b)(3)(B)

adjustment)

Schedule and item

number from Form 706

“Subtotal” from Col. B, below left

Subtotal Total adjusted value

5 Enter the value of the total gross estate as adjusted under section 2032A(b)(3)(A). 

6 Attach a description of the method used to determine the special value based on qualified use.

Did the decedent and/or a member of his or her family own all property listed on line 2 for at least 5 of the

8 years immediately preceding the date of the decedent’s death?

7

Were there any periods during the 8-year period preceding the date of the decedent’s death during which

the decedent or a member of his or her family:

8

a Did not own the property listed on line 2 above?

b Did not use the property listed on line 2 above in a qualified use?

Did not materially participate in the operation of the farm or other business within the meaning of se

2032A(e)(6)?

c

If “Yes” to any of the above, you must attach a statement listing the periods. If applicable, describe whether 

sections 2032A(b)(4) or (5) are met.

Attach affidavits describing the activities constituting material participation and the identity and re

decedent of the material participants.

9

10 Persons holding interests. Enter the requested information for each party who received any interest in the speciall

Name Address

A

B

C

D

E

F

G

H

Identifying number Relationship to decedent Fair market value 

A

B

C

D

E

F

G

H

You must attach a computation of the GST tax savings attributable to direct skips for each person listed above who is a skip perso

Woodlands election. Check here  if you wish to make a Woodlands election as described in section 203

schedule and item numbers from Form 706 of the property for which you are making this election 

11

You must attach a statement explaining why you are entitled to make this election. The IRS may issue regulation

information to substantiate this election. You will be notified by the IRS if you must supply further information.

Schedule A-1—Page 9

(Each of the qualified heirs receiving an interest in the property must sign the agreement, and the agreem

with this return.)
Form 706 (Rev. 8-2005)

Estate of: Date of Death Decedent’s Social 

We (list all qualified heirs and other persons having an interest in the property required to sign this agreement)

being all the qualified heirs and

being all other parties having interests in the property which is qualified real property and which is valued under secti

Internal Revenue Code, do hereby approve of the election made by 

Executor/Administrator of the estate of 

pursuant to section 2032A to value said property on the basis of the qualified use to which the property is devoted a

into this agreement pursuant to section 2032A(d).

The undersigned agree and consent to the application of subsection (c) of section 2032A of the Code with respect 

described on line 2 of Part 2 of Schedule A-1 of Form 706, attached to this agreement. More specifically, the undersig

agree and consent to personal liability under subsection (c) of 2032A for the additional estate and GST taxes imposed 

with respect to their respective interests in the above-described property in the event of certain early dispositions of t

cessation of the qualified use of the property. It is understood that if a qualified heir disposes of any interest in qualif

any member of his or her family, such member may thereafter be treated as the qualified heir with respect to such in

Form 706-A and a new agreement.

The undersigned interested parties who are not qualified heirs consent to the collection of any additional estate and G

under section 2032A(c) of the Code from the specially valued property.

If there is a disposition of any interest which passes, or has passed to him or her, or if there is a cessation of the q

specially valued property which passes or passed to him or her, each of the undersigned heirs agrees to file a Form 70

Additional Estate Tax Return, and pay any additional estate and GST taxes due within 6 months of the disposition or 

It is understood by all interested parties that this agreement is a condition precedent to the election of special use valu

2032A of the Code and must be executed by every interested party even though that person may not have received 

tax benefits or be in possession of such property.

Each of the undersigned understands that by making this election, a lien will be created and recorded pursuant to se

Code on the property referred to in this agreement for the adjusted tax differences with respect to the estate as 

2032A(c)(2)(C).

As the interested parties, the undersigned designate the following individual as their agent for all dealings with the Intern

concerning the continued qualification of the specially valued property under section 2032A of the Code and on all is

special lien under section 6324B. The agent is authorized to act for the parties with respect to all dealings with the 

affecting the qualified real property described earlier. This authority includes the following:

● To receive confidential information on all matters relating to continued qualification under section 2032A of the sp

real property and on all matters relating to the special lien arising under section 6324B;

● To furnish the Internal Revenue Service with any requested information concerning the property;

● To notify the Internal Revenue Service of any disposition or cessation of qualified use of any part of the property;

● To receive, but not to endorse and collect, checks in payment of any refund of Internal Revenue taxes, penalties, o

● To execute waivers (including offers of waivers) of restrictions on assessment or collection of deficiencies in tax and 

notice of disallowance of a claim for credit or refund; and

● To execute closing agreements under section 7121.

Schedule 

● The agreement is executed by each and every one of the qualified heirs, and

● The agreement is included with the estate tax return when the estate tax return is filed.

There cannot be a valid election unless:

(contin

Part 3. Agreement to Special Valuation Under Section 2032A
Form 706 (Rev. 8-2005)

Part 3. Agreement to Special Valuation Under Section 2032A ( Continue

Estate of: Date of Death Decedent’s Social 

● Other acts (specify) 

By signing this agreement, the agent agrees to provide the Internal Revenue Service with any requested information conc

and to notify the Internal Revenue Service of any disposition or cessation of the qualified use of any part of this prope

Name of Agent Signature Addres

The property to which this agreement relates is listed in Form 706, United States Estate (and Generation-Skipping Tr

and in the Notice of Election, along with its fair market value according to section 2031 of the Code and its special u

to section 2032A. The name, address, social security number, and interest (including the value) of each of the undersig

are as set forth in the attached Notice of Election.

IN WITNESS WHEREOF, the undersigned have hereunto set their hands at 

this day of .

SIGNATURES OF EACH OF THE QUALIFIED HEIRS:

Schedule A-1—Page 11

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signatures of other interested parties

Signatures of other interested parties

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir

Signature of qualified heir
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE B—Stocks and Bonds

(For jointly owned property that must be disclosed on Schedule E, see the instructions for Schedu

Alternate

valuation date

Description including face amount of bonds or number of shares and par

value for identification. Give CUSIP number. If closely held entity, give EIN.

Item

number Unit value Alternate value 

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 2.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the s

(The instructions to Schedule B are in the separate instructions.) Sched

CUSIP number
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE C—Mortgages, Notes, and Cash

(For jointly owned property that must be disclosed on Schedule E, see the instructions for Sch

Alternate

valuation date

Item

number Description Alternate value 

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 3.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

Sched

(See the instructions on the reverse side.)
Form 706 (Rev. 8-2005)

Instructions for Schedule C—

Mortgages, Notes, and Cash

Schedule C—Page 14

Complete Schedule C and file it with your return if the

total gross estate contains any:

● mortgages,

● notes, or

● cash.

List on Schedule C:

● Mortgages and notes payable to the decedent at

the time of death.

● Cash the decedent had at the date of death.

Do not list on Schedule C:

● Mortgages and notes payable by the decedent. (If

these are deductible, list them on Schedule K.)

List the items on Schedule C in the following order:

1. mortgages,

2. promissory notes,

3. contracts by decedent to sell land,

4. cash in possession, and

5. cash in banks, savings and loan associations,

and other types of financial organizations.

What to enter in the “Description” column:

For mortgages, list:

● face value,

● unpaid balance,

● date of mortgage,

● date of maturity,

● name of maker,

● property mortgaged,

● interest dates, and

● interest rate.

Example to enter in “Description” co

“Bond and mortgage of $50,000, unpai

$24,000; dated: January 1, 1985; John 

Roe; premises: 22 Clinton Street, Newa

January 1, 2005; interest payable at 10

year—January 1 and July 1.”

For promissory notes, list:

● in the same way as mortgages.

For contracts by the decedent to sell la

● name of purchaser,

● contract date,

● property description,

● sale price,

● initial payment,

● amounts of installment payment,

● unpaid balance of principal, and

● interest rate.

For cash in possession, list:

● such cash separately from bank de

For cash in banks, savings and loan as

other types of financial organizations, li

● name and address of each financial 

● amount in each account,

● serial or account number,

● nature of account—checking, saving

deposit, etc., and

● unpaid interest accrued from date o

payment to the date of death.

Note. If you obtain statements from the 

organizations, keep them for IRS inspec
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE D—Insurance on the Decedent’s Life

You must list all policies on the life of the decedent and attach a Form 712 for each po

Alternate

valuation date

Item

number Description Alternate value 

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 4.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

Sched

(See the instructions on the reverse side.)
Form 706 (Rev. 8-2005)

Schedule D—Page 16

If you are required to file Form 706 and there was any

insurance on the decedent’s life, whether or not

included in the gross estate, you must complete

Schedule D and file it with the return.

Insurance you must include on Schedule D. Under

section 2042 you must include in the gross estate:

● Insurance on the decedent’s life receivable by or

for the benefit of the estate; and

● Insurance on the decedent’s life receivable by

beneficiaries other than the estate, as described

below.

The term ‘‘insurance’’ refers to life insurance of every

description, including death benefits paid by fraternal

beneficiary societies operating under the lodge system,

and death benefits paid under no-fault automobile

insurance policies if the no-fault insurer was

unconditionally bound to pay the benefit in the event

of the insured’s death.

Insurance in favor of the estate. Include on

Schedule D the full amount of the proceeds of

insurance on the life of the decedent receivable by the

executor or otherwise payable to or for the benefit of

the estate. Insurance in favor of the estate includes

insurance used to pay the estate tax, and any other

taxes, debts, or charges that are enforceable against

the estate. The manner in which the policy is drawn is

immaterial as long as there is an obligation, legally

binding on the beneficiary, to use the proceeds to pay

taxes, debts, or charges. You must include the full

amount even though the premiums or other

consideration may have been paid by a person other

than the decedent.

Insurance receivable by beneficiaries other than the

estate. Include on Schedule D the proceeds of all

insurance on the life of the decedent not receivable by

or for the benefit of the decedent’s estate if the

decedent possessed at death any of the incidents of

ownership, exercisable either alone or in conjunction

with any person.

● The right of the insured or estate to its economic

benefits;

● The power to change the beneficiary;

Incidents of ownership in a policy include:

● The power to surrender or cancel t

● The power to assign the policy or t

assignment;

● The power to pledge the policy for 

● The power to obtain from the insur

against the surrender value of the p

● A reversionary interest if the value 

reversionary interest was more than 

value of the policy immediately bef

decedent died. (An interest in an in

is considered a reversionary interes

example, the proceeds become pa

insured’s estate or payable as the i

the beneficiary dies before the insu

Life insurance not includible in the gr

under section 2042 may be includible u

other section of the Code. For example

insurance policy could be transferred b

in such a way that it would be includibl

estate under section 2036, 2037, or 20

instructions to Schedule G for a descrip

sections.)

Completing the Schedule

You must list every policy of insurance 

the decedent, whether or not it is includ

estate.

Under ‘‘Description’’ list:

● Name of the insurance company a

● Number of the policy.

For every policy of life insurance liste

schedule, you must request a statemen

Life Insurance Statement, from the com

issued the policy. Attach the Form 712 

Schedule D.

If part or all of the policy proceeds ar

in the gross estate, you must explain w

not included.

If the policy proceeds are paid in one 

net proceeds received (from Form 712, 

value (and alternate value) columns of S

the policy proceeds are not paid in one 

value of the proceeds as of the date of 

death (from Form 712, line 25).

Instructions for Schedule D—Insurance on

the Decedent’s Life
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE E—Jointly Owned Property

(If you elect section 2032A valuation, you must complete Schedule E and Schedule A-1.)

PART 1.—Qualified Joint Interests—Interests Held by the Decedent and His or Her Spouse as the On

(Section 2040(b)(2))

Description

For securities, give CUSIP number.

Alternate

valuation date

Item

number Alternate value 

Total from continuation schedules (or additional sheets) attached to this schedule

1a Totals

1b Amounts included in gross estate (one-half of line 1a)

PART 2.—All Other Joint Interests

2a State the name and address of each surviving co-tenant. If there are more than three surviving co-tenants, list the addit

on an attached sheet.

Name Address (number and street, city, state, an

A.

B.

C.

Enter

letter for

co-tenant

Description 

(including alternate valuation date if any).

For securities, give CUSIP number.

Includible

alternate value

Percentage

includible

Item

number

Total from continuation schedules (or additional sheets) attached to this schedule

2b Total other joint interests

3

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of 

(See the instructions on the reverse side.) Sched

1a

1b

2b

Total includible joint interests (add lines 1b and 2b). Also enter on Part 5, Recapitulation,

page 3, at item 5 3
Form 706 (Rev. 8-2005)

Schedule E—Page 18

For each item of property, enter the a

letter A, B, C, etc., from line 2a to indic

and address of the surviving co-tenant.

Under “Description,” describe the pro

required in the instructions for Schedule

F for the type of property involved.

In the “Percentage includible” column

percentage of the total value of the pro

intend to include in the gross estate.

Generally, you must include the full v

jointly owned property in the gross esta

the full value should not be included if 

that a part of the property originally bel

other tenant or tenants and was never 

acquired by the other tenant or tenants 

decedent for less than adequate and fu

in money or money’s worth, or unless y

that any part of the property was acqui

consideration originally belonging to the 

tenant or tenants. In this case, you may 

the value of the property an amount pro

the consideration furnished by the othe

tenants. Relinquishing or promising to r

curtesy, or statutory estate created inst

curtesy, or other marital rights in the de

property or estate is not consideration 

money’s worth. See the Schedule A ins

value to show for real property that is s

mortgage.

If the property was acquired by the d

another person or persons by gift, bequ

inheritance as joint tenants, and their in

otherwise specified by law, include only 

value of the property that is figured by 

value of the property by the number of 

If you believe that less than the full v

entire property is includible in the gross 

purposes, you must establish the right 

smaller value by attaching proof of the 

and nature of the decedent’s interest a

interest(s) of the decedent’s co-tenant o

In the “Includible alternate value” and 

value at date of death” columns, you s

the values that you believe are includib

estate.

Part 2—Other joint interests. All joint 

were not entered in Part 1 must be ent

Instructions for Schedule E—Jointly Owned

Property

If you are required to file Form 706, you must complete

Schedule E and file it with the return if the decedent

owned any joint property at the time of death, whether

or not the decedent’s interest is includible in the gross

estate.

Enter on this schedule all property of whatever kind

or character, whether real estate, personal property, or

bank accounts, in which the decedent held at the time

of death an interest either as a joint tenant with right to

survivorship or as a tenant by the entirety.

Do not list on this schedule property that the

decedent held as a tenant in common, but report the

value of the interest on Schedule A if real estate, or on

the appropriate schedule if personal property. Similarly,

community property held by the decedent and spouse

should be reported on the appropriate Schedules A

through I. The decedent’s interest in a partnership

should not be entered on this schedule unless the

partnership interest itself is jointly owned. Solely

owned partnership interests should be reported on

Schedule F, “Other Miscellaneous Property.”

Part 1—Qualified joint interests held by decedent

and spouse. Under section 2040(b)(2), a joint interest

is a qualified joint interest if the decedent and the

surviving spouse held the interest as:

● Tenants by the entirety, or

● Joint tenants with right of survivorship if the

decedent and the decedent’s spouse are the only

joint tenants.

Interests that meet either of the two requirements

above should be entered in Part 1. Joint interests that

do not meet either of the two requirements above

should be entered in Part 2.

Under “Description,” describe the property as

required in the instructions for Schedules A, B, C, and

F for the type of property involved. For example, jointly

held stocks and bonds should be described using the

rules given in the instructions to Schedule B.

Under “Alternate value” and “Value at date of

death,” enter the full value of the property.

Note. You cannot claim the special treatment under

section 2040(b) for property held jointly by a decedent

and a surviving spouse who is not a U.S. citizen. You

must report these joint interests on Part 2 of

Schedule E, not Part 1.
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE F—Other Miscellaneous Property Not Reportable Under Any Othe

(For jointly owned property that must be disclosed on Schedule E, see the instructions for Schedul

(If you elect section 2032A valuation, you must complete Schedule F and Schedule A-1.)

1 Did the decedent at the time of death own any articles of artistic or collectible value in excess of $3,000 o

collections whose artistic or collectible value combined at date of death exceeded $10,000?

If “Yes,” submit full details on this schedule and attach appraisals.

2 Has the decedent’s estate, spouse, or any other person, received (or will receive) any bonus or award as a r

of the decedent’s employment or death?

3 Did the decedent at the time of death have, or have access to, a safe deposit box?

If ‘‘Yes,’’ state location, and if held in joint names of decedent and another, state name and relationship of 

depositor.

If any of the contents of the safe deposit box are omitted from the schedules in this return, explain fully 

omitted.

Description 

For securities, give CUSIP number.

Alternate

valuation date

Item

number Alternate value 

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 6.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

(See the instructions on the reverse side.)

Sched

If “Yes,” submit full details on this schedule.
Form 706 (Rev. 8-2005)

● Household goods and personal effects, including

wearing apparel;

Instructions for Schedule F—Other

Miscellaneous Property

● Farm products and growing crops;

You must complete Schedule F and file it with the

return.

● Livestock;

On Schedule F, list all items that must be included in

the gross estate that are not reported on any other

schedule, including:

● Farm machinery; and

● Automobiles.

If the decedent owned any interest in a partnership

or unincorporated business, attach a statement of

assets and liabilities for the valuation date and for the

5 years before the valuation date. Also attach

statements of the net earnings for the same 5 years.

Be sure to include the EIN of the entity. You must

● Debts due the decedent (other than notes and

mortgages included on Schedule C);

● Interests in business;

● Insurance on the life of another (obtain and attach

Form 712, Life Insurance Statement, for each

policy).

Note (for single premium or paid-up policies). In

certain situations, for example where the surrender

value of the policy exceeds its replacement cost, the

true economic value of the policy will be greater

than the amount shown on line 59 of Form 712. In

these situations, you should report the full economic

value of the policy on Schedule F. See

Rev. Rul. 78-137, 1978-1 C.B. 280 for details.

All partnership interests should be re

Schedule F unless the partnership inter

jointly owned. Jointly owned partnershi

should be reported on Schedule E.

If real estate is owned by the sole pro

should be reported on Schedule F and 

Schedule A. Describe the real estate w

detail required for Schedule A.

● Section 2044 property (see Decedent Who Was a

Surviving Spouse below);

● Claims (including the value of the decedent’s

interest in a claim for refund of income taxes or

the amount of the refund actually received);

Line 1. If the decedent owned at the da

articles with artistic or intrinsic value (e.

silverware, books, statuary, vases, orien

or stamp collections), check the “Yes” 

and provide full details. If any one artic

more than $3,000, or any collection of s

valued at more than $10,000, attach an 

expert under oath and the required stat

regarding the appraiser’s qualifications 

Regulations section 20.2031-6(b)).

● Rights;

● Royalties;

● Leaseholds;

● Judgments;

● Reversionary or remainder interests;

Schedule F—Page 20

● Shares in trust funds (attach a copy of the trust

instrument);

Decedent Who Was a Surviving 

If the decedent was a surviving spouse

have received qualified terminable inter

(QTIP) from the predeceased spouse fo

marital deduction was elected either on 

predeceased spouse’s estate tax return 

return, Form 709. The election was ava

made and decedents dying after Decem

List such property on Schedule F.

If this election was made and the sur

retained his or her interest in the QTIP 

death, the full value of the QTIP proper

in his or her estate, even though the qu

interest terminated at death. It is valued 

of the surviving spouse’s death, or alte

date, if applicable. Do not reduce the v

annual exclusion that may have applied 

creating the interest.

The value of such property included 

spouse’s gross estate is treated as pas

surviving spouse. It therefore qualifies f

and marital deductions on the surviving 

estate tax return if it meets the other re

those deductions.

For additional details, see Regulation

20.2044-1.

account for goodwill in the valuation. In 

the same information and follow the me

value close corporations. See the instru

Schedule B.

● Any interest in an Archer medical savings account

(MSA) or Health Savings Account (HSA), unless

such interest passes to the surviving spouse; and
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE G—Transfers During Decedent’s Life

(If you elect section 2032A valuation, you must complete Schedule G and Schedule A-1.)

Description

For securities, give CUSIP number.

Alternate

valuation date

Item

number Alternate value 

Gift tax paid by the decedent or the estate for all gifts made by

the decedent or his or her spouse within 3 years before the

decedent’s death (section 2035(b))

A.

X X X X X

B. Transfers includible under section 2035(a), 2036, 2037, or 2038:

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 7.)

SCHEDULE H—Powers of Appointment

(If you elect section 2032A valuation, you must complete Schedule H and Schedule A-1.)

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 8.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

(The instructions to Schedules G and H are in the separate instructions.) Schedules G a

Description Alternate

valuation date

Item

number Alternate value 

(Include “5 and 5 lapsing” powers (section 2041(b)(2)) held by the decedent.)
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE I—Annuities

Note. Generally, no exclusion is allowed for the estates of decedents dying after December 31, 1984 (see page 15 of the inst

Are you excluding from the decedent’s gross estate the value of a lump-sum distribution described in section 20

(as in effect before its repeal by the Deficit Reduction Act of 1984)?

A

If “Yes,” you must attach the information required by the instructions.

Includible

alternate value

Alternate

valuation date

Description 

Show the entire value of the annuity before any exclusions.

Item

number

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 9.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of 

(The instructions to Schedule I are in the separ

Schedule I—Page 22
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE J—Funeral Expenses and Expenses Incurred in Administering Property Sub

Note. Do not list on this schedule expenses of administering property not subject to claims. For those expenses, s

for Schedule L.

If executors’ commissions, attorney fees, etc., are claimed and allowed as a deduction for estate tax purpose

allowable as a deduction in computing the taxable income of the estate for federal income tax purposes. They 

an income tax deduction on Form 1041 if a waiver is filed to waive the deduction on Form 706 (see the Form 1

Item

number Description Expense amount 

A. Funeral expenses:

1

Total funeral expenses 

B. Administration expenses:

Executors’ commissions—amount estimated/agreed upon/paid. (Strike out the words that do not

apply.)

1

2 Attorney fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.)

3 Accountant fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.)

Expense amount

4 Miscellaneous expenses:

Total miscellaneous expenses from continuation schedules (or additional sheets)

attached to this schedule

Total miscellaneous expenses 

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 13.) 

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

Sched

(See the instructions on the reverse side.)
Form 706 (Rev. 8-2005)

On Schedule J, itemize funeral expenses and expenses

incurred in administering property subject to claims. List

the names and addresses of persons to whom the

expenses are payable and describe the nature of the

expense. Do not list expenses incurred in

administering property not subject to claims on this

schedule. List them on Schedule L instead.

Do not deduct on this schedule amoun

trustees’ commissions whether received 

the capacity of a trustee or by a separate 

amounts were paid in administering prop

to claims, deduct them on Schedule L.

Note. Executors’ commissions are taxabl

executors. Therefore, be sure to include t

on your individual income tax return.

Funeral Expenses. Itemize funeral expenses on line A.

Deduct from the expenses any amounts that were

reimbursed, such as death benefits payable by the Social

Security Administration and the Veterans Administration.

Attorney Fees. Enter the amount of attor

have actually been paid or that you reaso

be paid. If on the final examination of the 

claimed have not been awarded by the p

paid, the deduction will be allowed provid

and Gift Tax Territory Manager is reasona

the amount claimed will be paid and that 

exceed a reasonable payment for the ser

taking into account the size and characte

and the local law and practice. If the fees 

not been paid at the time of final examina

return, the amount deducted must be sup

affidavit, or statement signed under the p

perjury, by the executor or the attorney s

amount has been agreed upon and will b

Executors’ Commissions. When you file the return, you

may deduct commissions that have actually been paid to

you or that you expect will be paid. You may not deduct

commissions if none will be collected. If the amount of

the commissions has not been fixed by decree of the

proper court, the deduction will be allowed on the final

examination of the return, provided that:

● The Estate and Gift Tax Territory Manager is reasonably

satisfied that the commissions claimed will be paid;

● The amount entered as a deduction is within the

amount allowable by the laws of the jurisdiction where

the estate is being administered; and

Do not deduct attorney fees incidental 

incurred by the beneficiaries. These expe

against the beneficiaries personally and a

administration expenses authorized by th

● It is in accordance with the usually accepted practice in

that jurisdiction for estates of similar size and character.

If you have not been paid the commissions claimed at

the time of the final examination of the return, you must

Schedule J—Page 24

Miscellaneous Expenses. Miscellaneous 

expenses necessarily incurred in preservi

distributing the estate are deductible. The

include appraiser’s and accountant’s fees

costs, and costs of storing or maintaining 

estate.

The expenses of selling assets are ded

the sale is necessary to pay the deceden

expenses of administration, or taxes, or t

estate or carry out distribution.

The deduction is limited to the amount paid for these

expenses that is allowable under local law but may not

exceed:

1. The value of property subject to claims included in

the gross estate, plus

2. The amount paid out of property included in the

gross estate but not subject to claims. This amount must

actually be paid by the due date of the estate tax return.

The applicable local law under which the estate is

being administered determines which property is and is

not subject to claims. If under local law a particular

property interest included in the gross estate would bear

the burden for the payment of the expenses, then the

property is considered property subject to claims.

Unlike certain claims against the estate for debts of the

decedent (see the instructions for Schedule K in the

separate instructions), you cannot deduct expenses

incurred in administering property subject to claims on

both the estate tax return and the estate’s income tax

return. If you choose to deduct them on the estate tax

return, you cannot deduct them on a Form 1041 filed for

the estate. Funeral expenses are only deductible on the

estate tax return.

Interest Expense. Interest expenses incu

decedent’s death are generally allowed as 

they are reasonable, necessary to the adm

the estate, and allowable under local law

Interest incurred as the result of a Fede

deficiency is a deductible administrative e

Penalties are not deductible even if they 

under local law.

You may not deduct a bequest or de

you instead of commissions. If, howeve

fixed by will the compensation payable 

services to be rendered in the administ

estate, you may deduct this amount to th

more than the compensation allowable by 

practice.

General. You must complete and file Schedule J if you

claim a deduction on item 13 of Part 5, Recapitulation.

Note. If you elect to pay the tax in install

section 6166, you may not deduct the int

the installments.

support the amount you deducted with a

statement signed under the penalties of p

amount has been agreed upon and will b

Instructions for Schedule J—Funeral

Expenses and Expenses Incurred in

Administering Property Subject to Claims
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE K—Debts of the Decedent, and Mortgages and Liens

Item

number

Amount unpaid to date Amount in contest Debts of the Decedent—Creditor and nature of claim, and

allowable death taxes

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 14.)

Mortgages and Liens—Description 

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 15.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

(The instructions to Schedule K are in the separate instructions.) Sched

Item

number
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE L—Net Losses During Administration and 

Expenses Incurred in Administering Property Not Subject to Claims

Item Net losses during administration

number 

(Note. Do not deduct losses claimed on a Federal income tax return.)

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 18.)

Expenses incurred in administering property not subject to

claims. (Indicate whether estimated, agreed upon, or paid.)

Item

number 

1

Total from continuation schedules (or additional sheets) attached to this schedule

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 19.)

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

Schedule L—Page 26 (The instructions to Schedule L are in the separ
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE M—Bequests, etc., to Surviving Spouse

1 Did any property pass to the surviving spouse as a result of a qualified disclaimer?

If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b).

Is the surviving spouse a U.S. citizen?

Election Out of QTIP Treatment of Annuities—Do you elect under section 2056(b)(7)(C)(ii) not to treat as qualifie

terminable interest property any joint and survivor annuities that are included in the gross estate and would otherwis

be treated as qualified terminable interest property under section 2056(b)(7)(C)? (see instructions)

Item

number Description of property interests passing to surviving spouse 

1

Total from continuation schedules (or additional sheets) attached to this schedule

Total amount of property interests listed on Schedule M

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets o

(See the instructions on the reverse side.)

Sched

Election To Deduct Qualified Terminable Interest Property Under Section 2056(b)(7). If a trust (or other prop

requirements of qualified terminable interest property under section 2056(b)(7), and

a. The trust or other property is listed on Schedule M, and 

then unless the executor specifically identifies the trust (all or a fractional portion or percentage) or other prope

excluded from the election, the executor shall be deemed to have made an election to have such trust (or othe

treated as qualified terminable interest property under section 2056(b)(7).

In what country was the surviving spouse born?

b. The value of the trust (or other property) is entered in whole or in part as a deduction on Schedule M,

What is the surviving spouse’s date of birth?

If the surviving spouse is a naturalized citizen, when did the surviving spouse acquire citizenship?

If the surviving spouse is not a U.S. citizen, of what country is the surviving spouse a citizen?

2a

3

b

c

d

e

If less than the entire value of the trust (or other property) that the executor has included in the gross estate 

deduction on Schedule M, the executor shall be considered to have made an election only as to a fraction of t

property). The numerator of this fraction is equal to the amount of the trust (or other property) deducted on Sch

denominator is equal to the total value of the trust (or other property).

4

5a

6

b

c

d

Federal estate taxes payable out of property interests listed on Schedule M

Other death taxes payable out of property interests listed on Schedule M

Add items 5a, b, and c

Net amount of property interests listed on Schedule M (subtract 5d from 4). Also enter on Part 5,

Recapitulation, page 3, at item 20

Federal and state GST taxes payable out of property interests listed on

Schedule M

4

6

5d

5c

5b

5a

Election To Deduct Qualified Domestic Trust Property Under Section 2056A. If a trust meets the requireme

domestic trust under section 2056A(a) and this return is filed no later than 1 year after the time prescribed by l

extensions) for filing the return, and

a. The entire value of a trust or trust property is listed on Schedule M, and

b. The entire value of the trust or trust property is entered as a deduction on Schedule M,

then unless the executor specifically identifies the trust to be excluded from the election, the executor shall be 

made an election to have the entire trust treated as qualified domestic trust property.
Form 706 (Rev. 8-2005)

Page 28

Examples of Listing of Property Interests on Schedule M

Item

number Description of property interests passing to surviving spouse 

One-half the value of a house and lot, 256 South West Street, held by decedent and surviving spouse as joint tenant

with right of survivorship under deed dated July 15, 1957 (Schedule E, Part I, item 1)

1

Proceeds of Gibraltar Life Insurance Company policy No. 104729, payable in one sum to surviving spouse

(Schedule D, item 3)

2

3 Cash bequest under Paragraph Six of will 

Instructions for Schedule

M—Bequests, etc., to

Surviving Spouse (Marital

Deduction)

General

The marital deduction is authorized by

section 2056 for certain property

interests that pass from the decedent to

the surviving spouse. You may claim the

deduction only for property interests that

are included in the decedent’s gross

estate (Schedules A through I).

Note. The marital deduction is generally

not allowed if the surviving spouse is

not a U.S. citizen. The marital deduction

is allowed for property passing to such a

surviving spouse in a “qualified domestic

trust” or if such property is transferred

or irrevocably assigned to such a trust

before the estate tax return is filed. The

executor must elect qualified domestic

trust status on this return. See the

instructions that follow, on pages 29–30,

for details on the election.

Property Interests That You May

List on Schedule M

For the rules on common disaster and

survival for a limited period, see section

2056(b)(3).

You may list on Schedule M only

those interests that the surviving spouse

takes:

1. As the decedent’s legatee, devisee,

heir, or donee;

2. As the decedent’s surviving tenant

by the entirety or joint tenant;

3. As an appointee under the

decedent’s exercise of a power or as a

4. As a beneficiary of insurance on the

decedent’s life;

5. As the surviving spouse taking

under dower or curtesy (or similar

statutory interest); and

6. As a transferee of a transfer made

by the decedent at any time.

Property Interests That You May

Not List on Schedule M

1. The value of any property that does

not pass from the decedent to the

surviving spouse;

2. Property interests that are not

included in the decedent’s gross estate;

3. The full value of a property interest

for which a deduction was claimed on

Schedules J through L. The value of the

property interest should be reduced by

the deductions claimed with respect to

it;

4. The full value of a property interest

that passes to the surviving spouse

subject to a mortgage or other

encumbrance or an obligation of the

surviving spouse. Include on 

Schedule M only the net value of the

interest after reducing it by the amount

of the mortgage or other debt;

5. Nondeductible terminable interests

(described below); or

6. Any property interest disclaimed by

the surviving spouse.

Terminable Interests

The ownership of a bond, note, or

other contractual obligation, which when

discharged would not have the effect of

an annuity for life or for a term, is not

considered a terminable interest.

Nondeductible terminable interests.

A terminable interest is nondeductible,

and should not be entered on

Schedule M (unless you are making a

QTIP election) if:

1. Another interest in 

property passed from t

some other person for 

adequate and full cons

money or money’s wor

2. By reason of its pa

person or that person’s 

part of the property aft

of the surviving spouse

This rule applies eve

interest that passes fro

to a person other than 

spouse is not included 

estate, and regardless 

interest passes. The ru

regardless of whether t

spouse’s interest and t

interest pass from the 

same time.

For example, a dece

property to his wife for 

remainder to his childre

interest that passed to 

qualify for the marital d

it will terminate at her d

children will thereafter 

the property.

However, if the dece

joint and survivor annu

his wife who survived h

the survivor’s annuity, t

it is included in the gro

qualifies for the marital 

because even though t

terminate on the wife’s 

else will possess or enj

property.

You must complete Schedule M and file

it with the return if you claim a

deduction on item 20 of Part 5,

Recapitulation.

Generally, you may list on Schedule M

all property interests that pass from the

decedent to the surviving spouse and

are included in the gross estate.

However, you should not list any

“Nondeductible terminable interests”

(described below) on Schedule M unless

you are making a QTIP election. The

property for which you make this

election must be included on

Schedule M. See “Qualified terminable

interest property” on the following page.

You should not list on Schedule M:

Certain interests in property passing

from a decedent to a surviving spouse

are referred to as terminable interests.

These are interests that will terminate or

fail after the passage of time, or on the

occurrence or nonoccurrence of some

contingency. Examples are: life estates,

annuities, estates for terms of years,

and patents.

The marital deductio

for an interest that the 

directed the executor o

convert, after death, in

interest for the survivin

marital deduction is no

an interest even if there 

Property interests tha

to pass to a person oth

surviving spouse are an

interest that: (a) passes 

decedent’s will or intes

transferred by a deced

(c) is held by or passed 

person as a decedent’s 

appointee under a dec

of a power, as taker in 

decedent’s release or n

power, or as a benefici

on the decedent’s life.

taker in default at the decedent’s

nonexercise of a power;
Form 706 (Rev. 8-2005)

If any property interest passing from

the decedent to the surviving spouse

may be paid or otherwise satisfied out of

any of a group of assets, the value of

the property interest is, for the entry on

Schedule M, reduced by the value of

any asset or assets that, if passing from

the decedent to the surviving spouse,

would be nondeductible terminable

interests. Examples of property interests

that may be paid or otherwise satisfied

out of any of a group of assets are a

bequest of the residue of the decedent’s

estate, or of a share of the residue, and

a cash legacy payable out of the general

estate.

Example: A decedent bequeathed

$100,000 to the surviving spouse. The

general estate includes a term for years

(valued at $10,000 in determining the

value of the gross estate) in an office

building, which interest was retained by

the decedent under a deed of the

building by gift to a son. Accordingly, the

value of the specific bequest entered on

Schedule M is $90,000.

Life Estate With Power of

Appointment in the Surviving Spouse.

A property interest, whether or not in

trust, will be treated as passing to the

surviving spouse, and will not be treated

as a nondeductible terminable interest if:

(a) the surviving spouse is entitled for

life to all of the income from the entire

interest; (b) the income is payable

annually or at more frequent intervals;

(c) the surviving spouse has the power,

exercisable in favor of the surviving

spouse or the estate of the surviving

spouse, to appoint the entire interest;

(d) the power is exercisable by the

surviving spouse alone and (whether

exercisable by will or during life) is

exercisable by the surviving spouse in all

events; and (e) no part of the entire

interest is subject to a power in any

other person to appoint any part to any

person other than the surviving spouse

(or the surviving spouse’s legal

representative or relative if the surviving

spouse is disabled. See Rev. Rul. 85-35,

1985-1 C.B. 328). If these five conditions

are satisfied only for a specific portion of

the entire interest, see the section

2056(b) regulations to determine the

amount of the marital deduction.

Life Insurance, Endowment, or Annuity

Payments, With Power of Appointment

in Surviving Spouse. A property interest

consisting of the entire proceeds under

Charitable Remainder Trusts. An

interest in a charitable remainder trust

will not be treated as a nondeductible

terminable interest if:

1. The interest in the trust passes from

the decedent to the surviving spouse;

and

2. The surviving spouse is the only

beneficiary of the trust other than

charitable organizations described in

section 170(c).

A “charitable remainder trust” is either

a charitable remainder annuity trust or a

charitable remainder unitrust. (See

section 664 for descriptions of these

trusts.)

Election To Deduct Qualified

Terminable Interests (QTIP)

If you file a Form 706 in which you do

not make this election, you may not file

an amended return to make the election

The effect of the elec

property (interest) will b

passing to the surviving 

not be treated as a non

terminable interest. All 

marital deduction requi

be satisfied before you 

election. For example, 

make this election for p

property interests that 

in the decedent’s gross 

Qualified terminable i

Qualified terminable int

property (a) that passe

decedent, and (b) in w

spouse has a qualifying 

for life.

The surviving spouse 

income interest for life 

spouse is entitled to al

from the property paya

more frequent intervals

usufruct interest for life 

and during the survivin

lifetime no person has 

appoint any part of the 

person other than the s

An annuity is treated as 

interest regardless of w

property from which th

payable can be separa

The QTIP election m

or any part of qualified 

interest property. A par

relate to a fractional or 

of the property so that 

will reflect its proportio

increase or decline in t

property when applying 

2519. Thus, if the intere

surviving spouse in a tr

property in which the s

qualified life estate) is q

terminable interest prop

make an election for a 

(or other property) only 

relates to a defined fra

percentage of the entir

property). The fraction 

may be defined by mea

Qualified Domestic 

(QDOT)

in the property passing to another

person and even if the terminable

interest would otherwise have been

deductible under the exceptions

described below for life estate and life

insurance and annuity payments with

powers of appointment. For more

information, see Regulations sections

20.2056(b)-1(f) and 20.2056(b)-1(g),

Example (7).

The marital deduction i

transfers to a surviving 

not a U.S. citizen only 

passes to the surviving 

“qualified domestic trus

You may elect to claim a marital

deduction for qualified terminable

interest property or property interests.

You make the QTIP election simply by

listing the qualified terminable interest

property on Schedule M and deducting

its value. You are presumed to have

made the QTIP election if you list the

property and deduct its value on

Schedule M. If you make this election,

the surviving spouse’s gross estate will

include the value of the “qualified

terminable interest property.” See the

instructions for line 6 of Part 4, General

Information, for more details. The

election is irrevocable.

unless you file the ame

before the due date for 

Form 706.

a life insurance, endowment, or annuity

contract is treated as passing from the

decedent to the surviving spouse, and

will not be treated as a nondeductible

terminable interest if: (a) the surviving

spouse is entitled to receive the

proceeds in installments, or is entitled to

interest on them, with all amounts

payable during the life of the spouse,

payable only to the surviving spouse;

(b) the installment or interest payments

are payable annually, or more frequently,

beginning not later than 13 months after

the decedent’s death; (c) the surviving

spouse has the power, exercisable in

favor of the surviving spouse or of the

estate of the surviving spouse, to

appoint all amounts payable under the

contract; (d) the power is exercisable by

the surviving spouse alone and (whether

exercisable by will or during life) is

exercisable by the surviving spouse in all

events; and (e) no part of the amount

payable under the contract is subject to

a power in any other person to appoint

any part to any person other than the

surviving spouse. If these five conditions

are satisfied only for a specific portion of

the proceeds, see the section 2056(b)

regulations to determine the amount of

the marital deduction.

Amendments to Reg

20.2044-1, 20.2056(b)-

20.2056(b)-10 clarify th

property is eligible for Q

the income interest is c

the executor’s election 

portion of the property 

election is made will pa

benefit of beneficiaries 

surviving spouse.
Form 706 (Rev. 8-2005)

Page 30

The determination of whether a trust

qualifies as a QDOT will be made as of

the date the decedent’s Form 706 is

filed. If, however, judicial proceedings

are brought before the Form 706’s due

Line 3

The executor can elect out of QTIP

treatment, however, by checking the

“Yes” box on line 3. Once made, the

election is irrevocable. If there is more

than one such joint and survivor annuity,

you are not required to make the

election for all of them.

If you make the election out of QTIP

treatment by checking “Yes” on line 3,

you cannot deduct the amount of the

annuity on Schedule M. If you do not

make the election out, you must list 

the joint and survivor annuities on

Schedule M.

Listing Property Interests on

Schedule M

Enter the value of ea

taking into account the 

or any other death tax

dates used in determin

of the gross estate ap

Schedule M.

If Schedule M includ

the residue or a part o

the decedent’s estate, 

the computation show

of the residue was det

statement showing:

● The value of all prop

included in the decede

(Schedules A through 

of the decedent’s prob

as lifetime transfers, jo

property that passed t

decedent’s death, and 

payable to specific be

● The values of all spe

legacies or devises, w

applicable clause or p

decedent’s will or cod

made to each member 

example, $1,000 to ea

employees, only the nu

class and the total val

received by them need 

● The date of birth of 

length of whose lives m

value of the residuary 

the surviving spouse; a

● Any other important 

as that relating to any 

of the estate not arisin

Lines 5a, b, and c. Th

values listed on Sched

reduced by the amoun

estate tax, the federal 

amount of state or oth

taxes paid out of the p

involved. If you enter a

state or other death or 

lines 5b or 5c, identify 

attach your computatio

Attachments. If you li

interests passing by th

on Schedule M, attach 

of the order admitting 

probate. If, when you f

court of probate jurisd

any decree interpreting 

its provisions affecting 

interests listed on Sch

entered any order of d

a copy of the decree o

addition, the IRS may 

evidence to support th

deduction claimed.

2. That requires that no distribution of

corpus from the trust can be made

unless such a trustee has the right to

withhold from the distribution the tax

imposed on the QDOT;

3. That meets the requirements of any

applicable regulations; and

4. For which the executor has made

an election on the estate tax return of

the decedent.

You make the QDOT election simply

by listing the qualified domestic trust or

the entire value of the trust property on

Schedule M and deducting its value. You

are presumed to have made the QDOT

election if you list the trust or trust

property and deduct its value on

Schedule M. Once made, the election

is irrevocable.

If an election is made to deduct

qualified domestic trust property under

section 2056A(d), provide the following

information for each qualified domestic

trust on an attachment to this schedule:

Section 2056(b)(7) creates an automatic

QTIP election for certain joint and

survivor annuities that are includible in

the estate under section 2039. To

qualify, only the surviving spouse can

have the right to receive payments

before the death of the surviving spouse.

List each property interest included in

the gross estate that passes from the

decedent to the surviving spouse and

for which a marital deduction is claimed.

This includes otherwise nondeductible

terminable interest property for which

you are making a QTIP election. Number

each item in sequence and describe

each item in detail. Describe the

instrument (including any clause or

paragraph number) or provision of law

under which each item passed to the

surviving spouse. If possible, show

where each item appears (number and

schedule) on Schedules A through I.

In listing otherwise nondeductible

property for which you are making a

QTIP election, unless you specifically

identify a fractional portion of the trust

or other property as not subject to the

election, the election will be considered

made for all of the trust or other

property.

1. The name and address of every

trustee;

2. A description of each transfer

passing from the decedent that is the

source of the property to be placed in

trust; and

3. The employer identification number

(EIN) for the trust.

The election must be made for an

entire QDOT trust. In listing a trust for

which you are making a QDOT election,

unless you specifically identify the trust

as not subject to the election, the

election will be considered made for the

entire trust.

Line 1

If property passes to the surviving

spouse as the result of a qualified

disclaimer, check “Yes” and attach a

copy of the written disclaimer required

by section 2518(b).

Note. For trusts created by an

instrument executed before November 5,

1990, paragraphs 1 and 2 above will be

treated as met if the trust instrument

requires that all trustees be individuals

who are citizens of the United States or

domestic corporations.

A QDOT is any trust:

1. That requires at least one trustee to

be either an individual who is a citizen of

the United States or a domestic

corporation;

such property is transferred or

irrevocably assigned to a QDOT before

the decedent’s estate tax return is filed.

date (including extensions) to have the

trust revised to meet the QDOT

requirements, then the determination will

not be made until the court-ordered

changes to the trust are made.
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE O—Charitable, Public, and Similar Gifts and Beques

If the transfer was made by will, has any action been instituted to have interpreted or to contest the will o

of its provisions affecting the charitable deductions claimed in this schedule?

1a

If ‘‘Yes,’’ full details must be submitted with this schedule.

b According to the information and belief of the person or persons filing this return, is any such action plan

If ‘‘Yes,’’ full details must be submitted with this schedule.

2 Did any property pass to charity as the result of a qualified disclaimer?

If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b).

Item

number Name and address of beneficiary Character of institution 

1

Total from continuation schedules (or additional sheets) attached to this schedule

3 Total 3

4a Federal estate tax payable out of property interests listed above 4a

b Other death taxes payable out of property interests listed above 4b

c Federal and state GST taxes payable out of property interests listed above 4c

d Add items 4a, b, and c 4d

5

Net value of property interests listed above (subtract 4d from 3). Also enter on Part 5, Recapitulation,

page 3, at item 21

5

(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of 

(The instructions to Schedule O are in the separate instructions.)

Sched
Form 706 (Rev. 8-2005)

Estate of:

SCHEDULE P—Credit for Foreign Death Taxes

List all foreign countries to which death taxes have been paid and for which a credit is claimed on this return.

If a credit is claimed for death taxes paid to more than one foreign country, compute the credit for taxes paid to one country

on this sheet and attach a separate copy of Schedule P for each of the other countries.

The credit computed on this sheet is for the

(Name of death tax or taxes)

imposed in

(Name of country)

Credit is computed under the

(Insert title of treaty or “statute”)

Citizenship (nationality) of decedent at time of death

(All amounts and values must be entered in United States money.)

Total of estate, inheritance, legacy, and succession taxes imposed in the country named above attributable to

property situated in that country, subjected to these taxes, and included in the gross estate (as defined by statute)

1

2 Value of the gross estate (adjusted, if necessary, according to the instructions for item 2)

Value of property situated in that country, subjected to death taxes imposed in that country, and included in the

gross estate (adjusted, if necessary, according to the instructions for item 3)

3

4 Tax imposed by section 2001 reduced by the total credits claimed under sections 2010 and 2012 (see instructions)

Amount of Federal estate tax attributable to property specified at item 3. (Divide item 3 by item 2 and multiply the

result by item 4.)

5

Credit for death taxes imposed in the country named above (the smaller of item 1 or item 5). Also enter on line 13

of Part 2, Tax Computation

6

SCHEDULE Q—Credit for Tax on Prior Transfers

Part 1—Transferor Information

IRS office where estate

tax return was filed Name of transferor Social security number Date of death

A

B

C

if section 2013(f) (special valuation of farm, etc., real property) adjustments to the computation of the credit were made (see

page 20 of the instructions).

Check here 

Part 2—Computation of Credit (see instructions beginning on page 20)

Transferor Total

A, B, & C Item

A B C

1 Transferee’s tax as apportioned (from worksheet,

(line 7  line 8) line 35 for each column)

2 Transferor’s tax (from each column of worksheet,

line 20)

3 Maximum amount before percentage requirement

(for each column, enter amount from line 1 or 2,

whichever is smaller)

4 Percentage allowed (each column) (see instructions) % % %

5 Credit allowable (line 3 line 4 for each column)

TOTAL credit allowable (add columns A, B, and C

of line 5). Enter here and on line 14 of Part 2,

Tax Computation

6

Schedules P and Q—Page 32 (The instructions to Schedules P and Q are in the separate instructions.)

1

2

3

4

5

6
Form 706 (Rev. 8-2005)

SCHEDULE R—Generation-Skipping Transfer Tax

Note. To avoid application of the deemed allocation rules, Form 706 and Schedule R should be filed to allocate t

to trusts that may later have taxable terminations or distributions under section 2612 even if the form is not r

to report estate or GST tax.

Part 1—GST Exemption Reconciliation (Section 2631) and Section 2652(a)(3) (Special QTIP

You no longer need to check a box to make a section 2652(a)(3) (special QTIP) election. If you

list qualifying property in Part 1, line 9, below, you will be considered to have made this election.

See page 23 of the separate instructions for details.

1 Maximum allowable GST exemption 1

2 2 Total GST exemption allocated by the decedent against decedent’s lifetime transfers

3

Total GST exemption allocated by the executor, using Form 709, against decedent’s lifetime

transfers

3

4 GST exemption allocated on line 6 of Schedule R, Part 2 4

5 GST exemption allocated on line 6 of Schedule R, Part 3 5

6 Total GST exemption allocated on line 4 of Schedule(s) R-1 6

7 Total GST exemption allocated to inter vivos transfers and direct skips (add lines 2–6) 7

8

GST exemption available to allocate to trusts and section 2032A interests (subtract line 7 from

line 1)

8

9 Allocation of GST exemption to trusts (as defined for GST tax purposes):

A B C D 

Tr

rati

Additional GST

exemption allocated

(see instructions)

GST exemption

allocated on lines 2–6,

above (see instructions)

Trust’s

EIN (if any)

Name of trust

9D Total. May not exceed line 8, above 9D

10 GST exemption available to allocate to section 2032A interests received by individual beneficiaries

(subtract line 9D from line 8). You must attach special use allocation schedule (see instructions). 10

(The instructions to Schedule R are in the separate instructions.) Sched

The GST tax is imposed on taxable transfers of interests in property located outside the United States a

located inside the United States.

See instructions beginning on page 21.
Form 706 (Rev. 8-2005)

Estate of:

Part 2—Direct Skips Where the Property Interests Transferred Bear the GST Tax on

the Direct Skips

Name of skip person Description of property interest transferred 

1 Total estate tax values of all property interests listed above 1

2 Estate taxes, state death taxes, and other charges borne by the property interests listed above 2

GST taxes borne by the property interests listed above but imposed on direct skips other than

those shown on this Part 2 (see instructions)

3

3

4 Total fixed taxes and other charges (add lines 2 and 3) 4

5 Total tentative maximum direct skips (subtract line 4 from line 1) 5

6 GST exemption allocated 6

7 Subtract line 6 from line 5 7

8 GST tax due (divide line 7 by 3.127659) 8

9 Enter the amount from line 8 of Schedule R, Part 3 9

Total GST taxes payable by the estate (add lines 8 and 9). Enter here and on line 17 of

Part 2—Tax Computation, on page 1

10

10

Schedule R—Page 34
Form 706 (Rev. 8-2005)

Estate of:

Part 3—Direct Skips Where the Property Interests Transferred Do Not Bear the GST

Tax on the Direct Skips

Name of skip person Description of property interest transferred E

1 Total estate tax values of all property interests listed above 1

2 Estate taxes, state death taxes, and other charges borne by the property interests listed above 2

GST taxes borne by the property interests listed above but imposed on direct skips other than

those shown on this Part 3 (see instructions)

3

3

4 Total fixed taxes and other charges (add lines 2 and 3) 4

5 Total tentative maximum direct skips (subtract line 4 from line 1) 5

6 GST exemption allocated 6

7 Subtract line 6 from line 5 7

8 GST tax due (multiply line 7 by .47). Enter here and on Schedule R, Part 2, line 9 8

Sched
SCHEDULE R-1 Generation-Skipping Transfer Tax (Form 706) Direct Skips From a Trust O

(Rev. August 2005)

Department of the Treasury

Internal Revenue Service Payment Voucher

Executor: File one copy with Form 706 and send two copies to the fiduciary. Do not pay the tax shown. See the sep

Fiduciary: See instructions on the following page. Pay the tax shown on line 6.

Name of trust Trust’s EIN

Name and title of fiduciary Name of decedent

Address of fiduciary (number and street) Decedent’s SSN Service Center 

City, state, and ZIP code Name of executor

Address of executor (number and street) City, state, and ZIP code

Date of decedent’s death Filing due date of Schedule R, Form 706 (with exten

Part 1—Computation of the GST Tax on the Direct Skip

Description of property interests subject to the direct skip E

1 1 Total estate tax value of all property interests listed above

2 Estate taxes, state death taxes, and other charges borne by the property interests listed above 2

3 3 Tentative maximum direct skip from trust (subtract line 2 from line 1)

4 GST exemption allocated 4

5 Subtract line 4 from line 3 5

GST tax due from fiduciary (divide line 5 by 3.127659). (See instructions if property will not

bear the GST tax.)

6

6

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my 

it is true, correct, and complete.

Signature(s) of executor(s)

Signature of fiduciary or officer representing fiduciary Date

Schedule R-1 (Form 706)—Page 36

Date

Date
Form 706 (Rev. 8-2005)

Schedule R-1 (Form 

Instructions for the Trustee

Introduction Schedule R-1 (Form 706) serves as a payment voucher for the Generation-Skip

(GST) tax imposed on a direct skip from a trust, which you, the trustee of the t

The executor completes the Schedule R-1 (Form 706) and gives you 2 copies. 

and keep one for your records.

How to pay You can pay by check or money order.

● Make it payable to the “United States Treasury.”

● Make the check or money order for the amount on line 6 of Schedule R-1.

● Write “GST Tax” and the trust’s EIN on the check or money order.

Signature You must sign the Schedule R-1 in the space provided.

What to mail Mail your check or money order and the copy of Schedule R-1 that you signed

Where to mail Mail to the Service Center shown on Schedule R-1.

When to pay The GST tax is due and payable 9 months after the decedent’s date of death (

Schedule R-1). You will owe interest on any GST tax not paid by that date.

Automatic

extension

You have an automatic extension of time to file Schedule R-1 and pay the GST 

automatic extension allows you to file and pay by 2 months after the due date 

extensions) for filing the decedent’s Schedule R (shown on the Schedule R-1).

If you pay the GST tax under the automatic extension, you will be charged in

penalties).

Additional

information

For more information, see Code section 2603(a)(2) and the instructions for Form 

States Estate (and Generation-Skipping Transfer) Tax Return.
4

Form 706 (Rev. 8-2005)

Schedule U—Page 38

Estate tax value of the land subject to the qualified conservation easement (see separate

instructions)

Deduction under section 2055(f) for the conservation easement (see

separate instructions)

Amount of indebtedness on the land (see separate instructions)

Net value of land (subtract line 17 from line 4)

Value of qualified conservation easement for which the exclusion is

being claimed (see instructions)

Multiply line 12 by 2

Divide line 10 by line 8. Figure to 3 decimal places (e.g., .123)

Subtract line 11 from .300. Enter the answer in hundredths by rounding

any thousandths up to the next higher hundredth (i.e., .030 = .03; but

.031 = .04)

Multiply line 18 by line 14

Subtract line 13 from .40

Enter the smaller of line 19 or the exclusion limitation (see instructions). Also enter this amount

on item 11, Part 5, Recapitulation, page 3

Part 3—Computation of Exclusion

10

11

12

6

14

15

16

5

13

7

8

9

17

1

SCHEDULE U. Qualified Conservation Easement Exclusion

Part 1—Election

Note. The executor is deemed to have made the election under section 2031(c)(6) if he or she files Schedule U 

qualifying conservation easements from the gross estate.

Part 2—General Qualifications

Describe the land subject to the qualified conservation easement (see separate instructions)

Estate of:

2 Did the decedent or a member of the decedent’s family own the land described above during the 3-year

period ending on the date of the decedent’s death? 

3 Describe the conservation easement with regard to which the exclusion is being claimed (see separate ins

6

5

7

10

11

4

13

14

15

16

17

Value of retained development rights on the land (see instructions)

Subtract line 7 from line 6

18

19

20

8

9

12

18

19

20

Date of death value of any easements granted prior to decedent’s

death and included on line 10 below (see instructions)

Add lines 4 and 5

Multiply line 8 by 30% (.30)

Note: If line 10 is less than line 9, continue with line 11. If line 10 is

equal to or more than line 9, skip lines 11 through 13, enter “.40”

on line 14, and complete the schedule.

If line 11 is equal to or less than .100, stop here; the estate does

not qualify for the conservation easement exclusion.

Total reductions in value (add lines 7, 15, and 16)
Form 706 (Rev. 8-2005) (Make copies of this schedule before completing it if you will need m

Estate of:

CONTINUATION SCHEDULE

Continuation of Schedule

(Enter letter of schedule you are continuing.)

Alternate

valuation date

Description

For securities, give CUSIP number.

Item

number

Unit value

(Sch. B, E, or G 

only)

Alternate value

TOTAL. (Carry forward to main schedule.)

Continuation Sch

See the instructions on the reverse side.
Form 706 (Rev. 8-2005)

Instructions for Continuation Schedule

Continuation Schedule—Page 40

When you need to list more assets or deductions than you have room for on o

schedules, use the Continuation Schedule on page 39. It provides a uniform fo

additional assets from Schedules A through I and additional deductions from S

L, M, and O.

Please keep the following points in mind:

● Use a separate Continuation Schedule for each main schedule you are conti

combine assets or deductions from different schedules on one Continuation Sc

● Make copies of the blank schedule before completing it if you expect to nee

one.

● Use as many Continuation Schedules as needed to list all the assets or dedu

● Enter the letter of the schedule you are continuing in the space at the top of 

Continuation Schedule.

● Use the Unit value column only if continuing Schedule B, E, or G. For all oth

use this space to continue the description.

● Carry the total from the Continuation Schedules forward to the appropriate li

schedule.

If continuing Report Where on C

Sche

Schedule E, Pt. 2 Percentage includible Alternate valua

Schedule K Amount unpaid to date Alternate valua

Schedule K Amount in contest Alternate value

Schedules J, L, M Description of deduction

continuation

Alternate valua

Alternate value

Schedule O Character of institution Alternate valua

Alternate value

Schedule O Amount of each deduction Amount deduc