United States Estate (and Generation-Skipping Transfer)

Tax Return Form 706

OMB No. 1545-0015 (Rev. April 1997) Estate of a citizen or resident of the United States (see separate instructions). To be

filed for decedents dying after October 8, 1990. For Paperwork Reduction Act Notice,

see page 1 of the separate instructions.

Department of the Treasury

Internal Revenue Service

1a Decedent’s first name and middle initial (and maiden name, if any) 1b Decedent’s social security no. Decedent’s last name 2

3a Legal residence (domicile) at time of death (county, state, and 3b Year domicile established 4 Date of birth Date of death 5

ZIP code, or foreign country)

6a Name of executor (see page 2 of the instructions) Executor’s address (number and street including apartment or suite no. or rural

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

6b

6c Executor’s social security number (see page 2 of the instructions)

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

8 If decedent died testate, check here © and attach a certified copy of the will. 9 If Form 4768 is attached, check here ©

Part 1.

—Decedent and Executor

10 If Schedule R-1 is attached, check here ©

1 Total gross estate (from Part 5, Recapitulation, page 3, item 10) 1

2 Total allowable deductions (from Part 5, Recapitulation, page 3, item 20) 2

3 Taxable estate (subtract line 2 from line 1) 3

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 3 and 4 5

6 Tentative tax on the amount on line 5 from Table A on page 10 of the instructions 6

7a If line 5 exceeds $10,000,000, enter the lesser of line 5 or $21,040,000. If

line 5 is $10,000,000 or less, skip lines 7a and 7b and enter -0- on line 7c 7a

b Subtract $10,000,000 from line 7a 7b

c Enter 5% (.05) of line 7b 7c

8 Total tentative tax (add lines 6 and 7c) 8

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)

9

9

10 Gross estate tax (subtract line 9 from line 8) 10

11 Maximum unified credit against estate tax 11

Adjustment to unified credit. (This adjustment may not exceed $6,000.

See page 7 of the instructions.)

12

12

13 Allowable unified credit (subtract line 12 from line 11) 13

Part 2.

—Tax Computation

14 Subtract line 13 from line 10 (but do not enter less than zero) 14

15 Credit for state death taxes. Do not enter more than line 14. Figure the credit by using the amount on

line 3 less $60,000. See Table B in the instructions and attach credit evidence (see instructions) 15

16 Subtract line 15 from line 14 16

17 Credit for Federal gift taxes on pre-1977 gifts (section 2012) (attach computation) 17

18 Credit for foreign death taxes (from Schedule(s) P). (Attach Form(s) 706-CE.) 18

19 Credit for tax on prior transfers (from Schedule Q) 19

20 Total (add lines 17, 18, and 19) 20

21 Net estate tax (subtract line 20 from line 16) 21

22 Generation-skipping transfer taxes (from Schedule R, Part 2, line 10) 22

23 Section 4980A increased estate tax (from Schedule S, Part I, line 17) (see page 20 of the instructions) 23

24 Total transfer taxes (add lines 21, 22, and 23) 24

25 Prior payments. Explain in an attached statement 25

26 United States Treasury bonds redeemed in payment of estate tax 26

27 Total (add lines 25 and 26) 27

28 Balance due (or overpayment) (subtract line 27 from line 24) 28

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

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

Signature(s) of executor(s) Date

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

Cat. No. 20548R

192,800 00
I declare that I am the attorney/ certified public accountant/ enrolled agent (you must check the applicable box) for the executor and prepared

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

state shown above.

Form 706 (Rev. 4-97)

Estate of:

Part 3.—Elections by the Executor

Please check the “Yes” or “No” box for each question. (See instructions beginning on page 3.) Yes No

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 5 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 Regulations section 601.504(b)(2)(i), to act as the estate’s representative before the Internal Revenue

Service, and to make written 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 ZIP code)

Signature CAF number Date Telephone number

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 6 of the instructions)

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

shown in Schedule O) (see instructions). For Privacy Act Notice (applicable to individual beneficiaries only), see the Instructions for Form 1040.

5

Name of individual, trust, or estate receiving $5,000 or more Identifying number Relationship to decedent Amount (see instructions)

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

Total

(continued on next page) Page 2

(Note: Please attach the necessary supplemental documents. You must attach the death certificate.)

(See instructions beginning on page 6.)
Form 706 (Rev. 4-97)

Part 4.—General Information (continued)

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

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

estate) (see page 6 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

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 more

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

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 inactive

or closely held corporation?

10

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

beginning on page 11 of the separate instructions)? If “Yes,” you must complete and attach Schedule G

12 Were there in existence at the time of the decedent’s death:

a Any trusts created by the decedent during his or her lifetime?

b Any trusts not created by the decedent under which the decedent possessed any power, beneficial interest, or trusteeship?

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

14 Was the marital deduction computed under the transitional rule of Public Law 97-34, section 403(e)(3) (Economic Recovery Tax Act of 1981)?

If “Yes,” attach a separate computation of the marital deduction, enter the amount on item 18 of the Recapitulation, and note

on item 18 “computation attached.”

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

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

15

Did the decedent have a total “excess retirement accumulation” (as defined in section 4980A(d)) in qualified employer plans

and individual retirement plans? If “Yes,” you must complete and attach Schedule S

16

Part 5.—Recapitulation

Item

number Gross estate Alternate value Value at date of death

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 (attach Form(s) 712 for life insurance)

8 Schedule H—Powers of Appointment

9 Schedule I—Annuities

Total gross estate (add items 1 through 9). Enter here and on line 1 of the Tax

Computation

10

Item

number Deductions Amount

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

12 Schedule K—Debts of the Decedent

13 Schedule K—Mortgages and Liens

14 Total of items 11 through 13

15 Allowable amount of deductions from item 14 (see the instructions for item 15 of the Recapitulation)

16 Schedule L—Net Losses During Administration

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

18 Schedule M—Bequests, etc., to Surviving Spouse

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

20 Total allowable deductions (add items 15 through 19). Enter here and on line 2 of the Tax Computation

Page 3
Form 706 (Rev. 4-97)

Estate of:

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

● 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 Value at date of death

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 of the same size.)

Schedule A— Page 4

(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 shown on

Schedule G.

● Real estate that is included in the gross estate under section 2041 should be shown on Schedule H.
Form 706 (Rev. 4-97)

Instructions for Schedule A—Real Estate Enter the amount of the mortgage under

‘‘Description’’ on this schedule. The unpaid amount of

the mortgage may be deducted on Schedule K. If the

decedent’s estate is NOT liable for the amount of the

mortgage, report only the value of the equity of

redemption (or value of the property less the

indebtedness) in the value column as part of the gross

estate. Do not enter any amount less than zero. Do not

deduct the amount of indebtedness on Schedule K.

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 the decedent

contracted to purchase. Report the full value of the

property and not the equity in the value column.

Deduct the unpaid part of the purchase price on

Schedule K.

Report the value of real estate without reducing it for

homestead or other exemption, or the value of dower,

curtesy, or a statutory estate created instead of dower

or 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 column.

Explain how the reported values were determined

and attach copies of any appraisals.

Schedule A Examples

In this example, alternate valuation is not adopted; the date of death is January 1, 1997.

Value at 

date of death

Alternate

valuation date

Item

number

Alternate

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

108,000

Rent due on item 1 for quarter ending November 1, 1996, but not collected at date

of death 2,700

Rent accrued on item 1 for November and December 1996 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

2

96,000

Rent due on item 2 for December 1996, but not collected at date of death 600

In this example, alternate valuation is adopted; the date of death is January 1, 1997.

Value at 

date of death

Alternate

valuation date

Item

number

Alternate

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

7/1/97 90,000 108,000

Rent due on item 1 for quarter ending November 1, 1996, but not collected until

February 1, 1997 2/1/97 2,700 2,700

Rent accrued on item 1 for November and December 1996, collected on February

1, 1997 2/1/97 1,800 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, 1997

2

5/1/97 90,000 96,000

Rent due on item 2 for December 1996, but not collected until February 1, 1997 2/1/97 600 600

Schedule A— Page 5
Form 706 (Rev. 4-97)

If the skip person received interests in specially valued

property that were shown on Schedule R-1, show these interests

on the Schedule R, Parts 2 and 3 worksheets, as appropriate.

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 Worksheets.—On lines 2–4

and 6, enter -0-.

Completing the Fair Market Value Worksheets.—Lines 2 and

3, fixed taxes and other charges.—If valuing the interests at their

fair market value (instead of special use value) causes any of

these taxes and charges to increase, enter the increased amount

(only) on these lines and attach an explanation of the increase.

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 10 of Schedule

R, Part 1, enter on line 6 the amount shown for the skip person

on the line 10 special use allocation schedule you attached to

Schedule R. If you did not complete line 10 of Schedule R, 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, subtract the tax

amount on line 10, Part 2 of the special use value worksheet

from the tax amount on line 10, Part 2 of the fair market value

worksheet. This difference is the skip person’s total GST tax

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 Valuation Under

Section 2032A

The agreement to special valuation by persons with an interest

in property is required under section 2032A(a)(1)(B) and (d)(2)

and must be signed by all parties who have any interest in the

property being valued based on its qualified use as of the date

of the decedent’s death.

An interest in property is an interest that, as of the date of the

decedent’s death, can be asserted under applicable local law so

as to affect the disposition of the specially valued property by

the estate. Any person who at the decedent’s death has any

such interest in the property, whether present or future, or

vested or contingent, must enter into the agreement. Included

are owners of remainder and executory interests; the holders of

general or special powers of appointment; beneficiaries of a gift

over in default of exercise of any such power; joint tenants and

holders of similar undivided interests when the decedent held

only a joint or undivided interest in the property or when only an

undivided interest is specially valued; and trustees of trusts and

representatives of other entities holding title to, or holding any

interests in the property. An heir who has the power under local

law to caveat (challenge) a will and thereby affect disposition of

the property is not, however, considered to be a person with an

interest in property under section 2032A solely by reason of that

right. Likewise, creditors of an estate are not such persons

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 agreement either

desires that an agent act for him or her or cannot legally bind

himself or herself due to infancy or other incompetency, or due

to death before the election under section 2032A is timely

exercised, a representative authorized by local law to bind the

person in an agreement of this nature may sign the agreement

Because the GST tax depends on the executor’s allocation of on his or her behalf.

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 the agent

designated in the agreement on all matters relating to continued

qualification under section 2032A of the specially valued real

property and on all matters relating to the special lien arising

under section 6324B. It is the duty of the agent as

attorney-in-fact for the parties with interests in the specially

valued property to furnish the IRS with any requested

information and to notify the IRS of any disposition or cessation

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

specially valued property received by the skip person at their

special use value and one showing the same interests at their

fair market value. Schedule A-1— Page 6

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.
Form 706 (Rev. 4-97)

Page 7

Checklist for Section 2032A Election.—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.

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 include a statement

as to whether there were any periods during the 8-year

period preceding the decedent’s date of death during

which the decedent or a member of his or her family

(a) did not own the property to be specially valued,

(b) use it in a qualified use, or (c) materially participate

in the operation of the farm or other business? (See

section 2032A(e)(6).)

12. Does the notice of election include, for each item

of specially valued property, the name of every person

taking an interest in that item of specially valued

property and the following information about each

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

taxpayer identification number, (c) the person’s

relationship to the decedent, and (d) the value of the

property interest passing to that person based on both

fair market value and qualified use?

13. Does the notice of election include affidavits

describing the activities constituting material

participation and the identity of the material

participants?

14. Does the notice of election include a legal

description of each item of specially valued property?

(In the case of an election made for qualified

woodlands, the information included in the notice of

election must include the reason for entitlement to the

woodlands election.)

Any election made under section 2032A will not be

valid unless a properly executed agreement (Schedule

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

ensure that the agreement satisfies the requirements

for a valid election, use the following checklist.

1. Has the agreement been signed by each and

every qualified heir having an interest in the property

being specially valued?

2. Has every qualified heir expressed consent to

personal liability under section 2032A(c) in the event of

an early disposition or early cessation of qualified use?

3. Is the agreement that is actually signed by the

qualified heirs in a form that is binding on all of the

qualified heirs having an interest in the specially valued

property?

4. Does the agreement designate an agent to act for

the parties to the agreement in all dealings with the

IRS on matters arising under section 2032A?

5. Has the agreement been signed by the designated

agent and does it give the address of the agent?

least 5 years of the 8 years immediately preceding the

date of the decedent’s death?
Form 706 (Rev. 4-97)

Decedent’s Social Security Number

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 instructions.)

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, as applicable.

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 D

Schedule and item number

from Form 706

Value based on qualified use

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

adjustment)

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 listed on line 3.

(continued on next page) Schedule A-1— Page 8

Full value 

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

adjustment)

A B C D

Schedule and item number

from Form 706

Value based on qualified use

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

adjustment)

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 included to make

a valid election.

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

● 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. 4-97)

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

A B A (continued) B (continued)

Adjusted value (with

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

adjustment)

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

Yes No

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

Yes No

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 section

2032A(e)(6)?

c

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

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

Attach affidavits describing the activities constituting material participation and the identity and relationship to the

decedent of the material participants.

9

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

Name Address

A

B

C

D

E

F

G

H

Identifying number Relationship to decedent Fair market value Special use 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 person. (See instructions.)

Woodlands election.—Check here © if you wish to make a woodlands election as described in section 2032A(e)(13). Enter the

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 regulations that require more

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 agreement must be filed

with this return.)
Form 706 (Rev. 4-97)

Part 3.—Agreement to Special Valuation Under Section 2032A

Estate of: Date of Death Decedent’s Social Security Number

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 section 2032A of the

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 and do hereby enter

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 to all the property

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

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

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

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

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

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 GST taxes imposed

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 qualified use of any

specially valued property which passes or passed to him or her, each of the undersigned heirs agrees to file a Form 706-A, United States

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

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

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

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 section 6324B of the

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

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

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

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

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

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 specially valued

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

● To furnish the Service with any requested information concerning the property.

● To notify the 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, or interest.

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

notice of disallowance of a claim for credit or refund.

● To execute closing agreements under section 7121.

Schedule A-1— Page 10

● 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:

(continued on next page)
Form 706 (Rev. 4-97)

Part 3.—Agreement to Special Valuation Under Section 2032A ( Continued)

Estate of: Date of Death Decedent’s Social Security Number

● Other acts (specify) ©

By signing this agreement, the agent agrees to provide the Service with any requested information concerning this property and to notify

the Service of any disposition or cessation of the qualified use of any part of this property.

Name of Agent Signature Address

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

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

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

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. 4-97)

Estate of:

SCHEDULE B—Stocks and Bonds

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

Alternate

valuation date

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

value where needed for identification. Give 9-digit CUSIP number.

Item

number Unit value Alternate value Value at date of death

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 same size.)

(The instructions to Schedule B are in the separate instructions.) Schedule B— Page 12
Form 706 (Rev. 4-97)

Estate of:

SCHEDULE C—Mortgages, Notes, and Cash

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

Alternate

valuation date

Item

number Description Alternate value Value at date of death

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 of the same size.)

Schedule C— Page 13

(See the instructions on the reverse side.)
Form 706 (Rev. 4-97)

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:

● mortgages,

● promissory notes,

● contracts by decedent to sell land,

● cash in possession, and

● 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” column:

“Bond and mortgage of $50,000, unpaid balance:

$24,000; dated: January 1, 1980; John Doe to Richard

Roe; premises: 22 Clinton Street, Newark, NJ; due:

January 1, 1997; interest payable at 10% a

year--January 1 and July 1.”

For promissory notes, list:

● in the same way as mortgages.

For contracts by the decedent to sell land, list:

● 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 deposits.

For cash in banks, savings and loan associations, and

other types of financial organizations, list:

● name and address of each financial organization,

● amount in each account,

● serial or account number,

● nature of account--checking, savings, time

deposit, etc., and

● unpaid interest accrued from date of last interest

payment to the date of death.

Important: If you obtain statements from the financial

organizations, keep them for IRS inspection.
Form 706 (Rev. 4-97)

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 policy.

Alternate

valuation date

Item

number Description Alternate value Value at date of death

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 of the same size.)

Schedule D— Page 15

(See the instructions on the reverse side.)
Form 706 (Rev. 4-97)

Instructions for Schedule D.—Insurance on

the Decedent’s Life

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 the policy;

● The power to assign the policy or to revoke an

assignment;

● The power to pledge the policy for a loan;

● The power to obtain from the insurer a loan

against the surrender value of the policy;

● A reversionary interest if the value of the

reversionary interest was more than 5% of the

value of the policy immediately before the

decedent died. (An interest in an insurance policy

is considered a reversionary interest if, for

example, the proceeds become payable to the

insured’s estate or payable as the insured directs if

the beneficiary dies before the insured.)

Life insurance not includible in the gross estate

under section 2042 may be includible under some

other section of the Code. For example, a life

insurance policy could be transferred by the decedent

in such a way that it would be includible in the gross

estate under section 2036, 2037, or 2038. (See the

instructions to Schedule G for a description of these

sections.)

Completing the Schedule

You must list every policy of insurance on the life of

the decedent, whether or not it is included in the gross

estate.

Under ‘‘Description’’ list:

● Name of the insurance company and

● Number of the policy.

For every policy of life insurance listed on the

schedule, you must request a statement on Form 712,

Life Insurance Statement, from the company that 

issued the policy. Attach the Form 712 to the back of

Schedule D.

If part or all of the policy proceeds are not included

in the gross estate, you must explain why they were

not included.

If the policy proceeds are paid in one sum, enter the

net proceeds received (from Form 712, line 24) in the

value (and alternate value) columns of Schedule D. If

the policy proceeds are not paid in one sum, enter the

value of the proceeds as of the date of the decedent’s

death (from Form 712, line 25).
Form 706 (Rev. 4-97)

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 Only Joint Tenants

(Section 2040(b)(2))

Description

For securities, give CUSIP number, if available.

Alternate

valuation date

Item

number Alternate value Value at date of death

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 additional co-tenants

on an attached sheet.

Name Address (number and street, city, state, and ZIP code)

A.

B.

C.

Enter

letter for

co-tenant

Description 

(including alternate valuation date if any) For

securities, give CUSIP number, if available.

Includible value at

date of death

Includible

alternate value

Percentage

includible

Item

number

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

2b Total other joint interests

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

3, at item 5

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

(See the instructions on the reverse side.) Schedule E— Page 17
Form 706 (Rev. 4-97)

Schedule E— Page 18

For each item of property, enter the appropriate

letter A, B, C, etc., from line 2a to indicate the name

and address of the surviving co-tenant.

Under “Description,” describe the property as

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

F for the type of property involved.

In the “Percentage includible” column, enter the

percentage of the total value of the property that you

intend to include in the gross estate.

Generally, you must include the full value of the

jointly owned property in the gross estate. However,

the full value should not be included if you can show

that a part of the property originally belonged to the

other tenant or tenants and was never received or

acquired by the other tenant or tenants from the

decedent for less than adequate and full consideration

in money or money’s worth, or unless you can show

that any part of the property was acquired with

consideration originally belonging to the surviving joint

tenant or tenants. In this case, you may exclude from

the value of the property an amount proportionate to

the consideration furnished by the other tenant or

tenants. Relinquishing or promising to relinquish dower,

curtesy, or statutory estate created instead of dower or

curtesy, or other marital rights in the decedent’s

property or estate is not consideration in money or

money’s worth. See the Schedule A instructions for the

value to show for real property that is subject to a

mortgage.

If the property was acquired by the decedent and

another person or persons by gift, bequest, devise, or

inheritance as joint tenants, and their interests are not

otherwise specified by law, include only that part of the

value of the property that is figured by dividing the full

value of the property by the number of joint tenants.

If you believe that less than the full value of the

entire property is includible in the gross estate for tax

purposes, you must establish the right to include the

smaller value by attaching proof of the extent, origin,

and nature of the decedent’s interest and the

interest(s) of the decedent’s co-tenant or co-tenants.

In the “Includible alternate value” and “Includible

value at date of death” columns, you should enter only

the values that you believe are includible in the gross

estate.

Part 2—Other joint interests.—All joint interests that

were not entered in Part 1 must be entered in Part 2. 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. 4-97)

Estate of:

SCHEDULE F—Other Miscellaneous Property Not Reportable Under Any Other Schedule

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

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

Yes No 1 Did the decedent at the time of death own any articles of artistic or collectible value in excess of $3,000 or any

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 result

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 joint

depositor.

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

omitted.

Description 

For securities, give CUSIP number, if available.

Alternate

valuation date

Item

number Alternate value Value at date of death

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 of the same size.)

(See the instructions on the reverse side.)

Schedule F— Page 19

If “Yes,” submit full details on this schedule.
Form 706 (Rev. 4-97)

● 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

● 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

● 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 56 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 reported on

Schedule F unless the partnership interest, itself, is

jointly owned. Jointly owned partnership interests

should be reported on Schedule E.

If real estate is owned by the sole proprietorship, it

should be reported on Schedule F and not on

Schedule A. Describe the real estate with the same

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 date of death

articles with artistic or intrinsic value (e.g., jewelry, furs,

silverware, books, statuary, vases, oriental rugs, coin or

stamp collections), check the “Yes” box on line 1 and

provide full details. If any one article is valued at more

than $3,000, or any collection of similar articles is

valued at more than $10,000, attach an appraisal by

an expert under oath and the required statement

regarding the appraiser’s qualifications (see

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 Spouse

If the decedent was a surviving spouse, he or she may

have received qualified terminable interest property

(QTIP) from the predeceased spouse for which the

marital deduction was elected either on the

predeceased spouse’s estate tax return or on a gift tax

return, Form 709. The election was available for gifts

made and decedents dying after December 31, 1981.

If this election was made and the surviving spouse

retained his or her interest in the QTIP property at

death, the full value of the QTIP property is includible

in his or her estate, even though the qualifying income

interest terminated at death. It is valued as of the date

of the surviving spouse’s death, or alternate valuation

date, if applicable. Do not reduce the value by any

annual exclusion that may have applied to the transfer

creating the interest.

The value of such property included in the surviving

spouse’s gross estate is treated as passing from the

surviving spouse. It therefore qualifies for the charitable

and marital deductions on the surviving spouse’s

estate tax return if it meets the other requirements for

those deductions.

For additional details, see Regulations section

20.2044-1.

statements of the net earnings for the same 5 years.

You must account for goodwill in the valuation. In

general, furnish the same information and follow the

methods used to value close corporations. See the

instructions for Schedule B.
Form 706 (Rev. 4-97)

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, if available.

Alternate

valuation date

Item

number Alternate value Value at date of death

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(c))

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 of the same size.)

(The instructions to Schedules G and H are in the separate instructions.) Schedules G and H— Page 21

Description Alternate

valuation date

Item

number Alternate value Value at date of death

(Include “5 and 5 lapsing” powers (section 2041(b)(2)) held by the decedent.)
Form 706 (Rev. 4-97)

Estate of:

SCHEDULE I—Annuities

Note: Generally, no exclusion is allowed for the estates of decedents dying after December 31, 1984 (see page 13 of the instructions).

Yes No Are you excluding from the decedent’s gross estate the value of a lump-sum distribution described in section

2039(f)(2)?

A

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

Includible 

value at date of death

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 same size.)

(The instructions to Schedule I are in the separate instructions.) Schedule I— Page 22
Form 706 (Rev. 4-97)

Estate of:

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

Note: Do not list on this schedule expenses of administering property not subject to claims. For those expenses, see the instructions

for Schedule L.

If executors’ commissions, attorney fees, etc., are claimed and allowed as a deduction for estate tax purposes, they are not

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

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

Item

number Description Expense amount Total amount

A. Funeral expenses:

1

Total funeral expenses

B. Administration expenses:

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

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 11.)

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

Schedule J— Page 23 (See the instructions on the reverse side.)
Form 706 (Rev. 4-97)

Instructions for Schedule J.—

Funeral Expenses and Expenses Incurred

in Administering Property Subject to

Claims

General.—You must complete and file Schedule J if

you claim a deduction on item 11 of Part 5,

Recapitulation.

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 amounts paid as

trustees’ commissions whether received by you acting in

the capacity of a trustee or by a separate trustee. If such

amounts were paid in administering property not subject

to claims, deduct them on Schedule L.

Note: Executors’ commissions are taxable income to the

executors. Therefore, be sure to include them as income

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 attorney fees that

have actually been paid or that you reasonably expect to

be paid. If on the final examination of the return the fees

claimed have not been awarded by the proper court and

paid, the deduction will be allowed provided the District

Director is reasonably satisfied that the amount claimed

will be paid and that it does not exceed a reasonable

payment for the services performed, taking into account

the size and character of the estate and the local law and

practice. If the fees claimed have not been paid at the

time of final examination of the return, the amount

deducted must be supported by an affidavit, or statement

signed under the penalties of perjury, by the executor or

the attorney stating that the amount has been agreed

upon and will be paid.

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 District Director 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;

Do not deduct attorney fees incidental to litigation

incurred by the beneficiaries. These expenses are charged

against the beneficiaries personally and are not

administration expenses authorized by the Code.

● 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

support the amount you deducted with an affidavit or

statement signed under the penalties of perjury that the

amount has been agreed upon and will be paid.

Schedule J— Page 24

Miscellaneous Expenses.—Miscellaneous administration

expenses necessarily incurred in preserving and

distributing the estate are deductible. These expenses

include appraiser’s and accountant’s fees, certain court

costs, and costs of storing or maintaining assets of the

estate.

The expenses of selling assets are deductible only if

the sale is necessary to pay the decedent’s debts, the

expenses of administration, or taxes, or to preserve the

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 incurred after the

decedent’s death are generally allowed as a deduction if

they are reasonable, necessary to the administration of

the estate, and allowable under local law.

Interest incurred as the result of a Federal estate tax

deficiency is a deductible administrative expense.

Penalties are not deductible even if they are allowable

under local law.

If you elect to pay the estate tax in installments, you

may deduct the interest payable as it accrues. For more

information, see the instructions for Question 3, Elections

by the Executor, on page 5 of the separate instructions.

You may not deduct a bequest or devise made to

you instead of commissions. If, however, the decedent

fixed by will the compensation payable to you for

services to be rendered in the administration of the

estate, you may deduct this amount to the extent it is not

more than the compensation allowable by the local law or

practice.
Form 706 (Rev. 4-97)

Estate of:

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

Amount claimed as

a deduction

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 12.)

Mortgages and Liens—Description Amount

1

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

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 of the same size.)

(The instructions to Schedule K are in the separate instructions.) Schedule K— Page 25

Item

number
Form 706 (Rev. 4-97)

Estate of:

SCHEDULE L—Net Losses During Administration and 

Expenses Incurred in Administering Property Not Subject to Claims

Item Net losses during administration

number Amount (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 16.)

Expenses incurred in administering property not subject to

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

Item

number Amount

1

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

TOTAL. (Also enter on Part 5, Recapitulation, page 3, at item 17.)

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

Schedule L— Page 26 (The instructions to Schedule L are in the separate instructions.)
Form 706 (Rev. 4-97)

Estate of:

SCHEDULE M—Bequests, etc., to Surviving Spouse

Yes No

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

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

would otherwise 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 Amount

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 of the same size.)

(See the instructions on the reverse side.)

Schedule M— Page 27

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

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 property to be

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

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 is entered as a

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

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

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

4

5a

6

b

c

d

Federal estate taxes (including section 4980A taxes) payable out of property

interests listed on Schedule M

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

Add items a, 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 18

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 requirements of a qualified

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

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 deemed to have

made an election to have the entire trust treated as qualified domestic trust property.
Form 706 (Rev. 4-97)

Page 28

Examples of Listing of Property Interests on Schedule M

Item

number Description of property interests passing to surviving spouse Amount

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

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

1

$132,500

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

D, item 3)

2

200,000

3 Cash bequest under Paragraph Six of will 100,000

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 on pages 28–30 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

taker in default at the decedent’s

nonexercise of a power;

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);

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 the same

property passed from the decedent to

some other person for less than

adequate and full consideration in

money or money’s worth; and

2. By reason of its passing, the other

person or that person’s heirs may enjoy

part of the property after the termination

of the surviving spouse’s interest.

This rule applies even though the

interest that passes from the decedent

to a person other than the surviving

spouse is not included in the gross

estate, and regardless of when the

interest passes. The rule also applies

regardless of whether the surviving

spouse’s interest and the other person’s

interest pass from the decedent at the

same time.

For example, a decedent devised real

property to his wife for life, with

remainder to his children. The life

interest that passed to the wife does not

qualify for the marital deduction because

it will terminate at her death and the

children will thereafter possess or enjoy

the property.

However, if the decedent purchased a

joint and survivor annuity for himself and

his wife who survived him, the value of

the survivor’s annuity, to the extent that

it is included in the gross estate,

qualifies for the marital deduction

because even though the interest will

terminate on the wife’s death, no one

else will possess or enjoy any part of the

property.

You must complete Schedule M and file

it with the return if you claim a

deduction on item 18 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 deduction is not allowed

for an interest that the decedent

directed the executor or a trustee to

convert, after death, into a terminable

interest for the surviving spouse. The

marital deduction is not allowed for such

an interest even if there was no interest

Property interests that are considered

to pass to a person other than the

surviving spouse are any property

interest that: (a) passes under a

decedent’s will or intestacy; (b) was

transferred by a decedent during life; or

(c) is held by or passed on to any

person as a decedent’s joint tenant, as

appointee under a decedent’s exercise

of a power, as taker in default at a

decedent’s release or nonexercise of a

power, or as a beneficiary of insurance

on the decedent’s life.
Form 706 (Rev. 4-97)

Page 29

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 a life insurance, endowment, or

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 election is that the

property (interest) will be treated as

passing to the surviving spouse and will

not be treated as a nondeductible

terminable interest. All of the other

marital deduction requirements must still

be satisfied before you may make this

election. For example, you may not

make this election for property or

property interests that are not included

in the decedent’s gross estate.

Qualified terminable interest

property is property (a) that passes

from the decedent, and (b) in which the

surviving spouse has a qualifying income

interest for life.

The surviving spouse has a qualifying

income interest for life if the surviving

spouse is entitled to all of the income

from the property payable annually or at

more frequent intervals, or has a

usufruct interest for life in the property,

and during the surviving spouse’s

lifetime no person has a power to

appoint any part of the property to any

person other than the surviving spouse.

An annuity is treated as an income

interest regardless of whether the

property from which the annuity is

payable can be separately identified.

The QTIP election may be made for all

or any part of a qualified terminable

interest property. A partial election must

relate to a fractional or percentile share

of the property so that the elective part

will reflect its proportionate share of the

increase or decline in the whole of the

property when applying sections 2044 or

2519. Thus, if the interest of the

surviving spouse in a trust (or other

property in which the spouse has a

qualified life estate) is qualified

terminable interest property, you may

make an election for a part of the trust

(or other property) only if the election

relates to a defined fraction or

percentage of the entire trust (or other

property). The fraction or percentage

may be defined by means of a formula.

Qualified Domestic Trust Election

(QDOT)

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;

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 is allowed for

transfers to a surviving spouse who is

not a U.S. citizen only if the property

passes to the surviving spouse in a

“qualified domestic trust” (QDOT) or if

such property is transferred or

irrevocably assigned to a QDOT before

the decedent’s estate tax return is filed.

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.

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 General

Information for more details. The

election is irrevocable.

unless you file the amended return on or

before the due date for filing the original

Form 706.
Form 706 (Rev. 4-97)

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

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.

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 each interest before

taking into account the Federal estate

tax or any other death tax. The valuation

dates used in determining the value 

of the gross estate apply also on

Schedule M.

If Schedule M includes a bequest of

the residue or a part of the residue of

the decedent’s estate, attach a copy of

the computation showing how the value

of the residue was determined. Include a

statement showing:

● The value of all property that is

included in the decedent’s gross estate

(Schedules A through I) but is not a part

of the decedent’s probate estate, such

as lifetime transfers, jointly owned

property that passed to the survivor on

decedent’s death, and the insurance

payable to specific beneficiaries.

● The values of all specific and general

legacies or devises, with reference to the

applicable clause or paragraph of the

decedent’s will or codicil. (If legacies are

made to each member of a class, for

example, $1,000 to each of decedent’s

employees, only the number in each

class and the total value of property

received by them need be furnished.)

● The date of birth of all persons, the

length of whose lives may affect the

value of the residuary interest passing to

the surviving spouse.

● Any other important information such

as that relating to any claim to any part

of the estate not arising under the will.

Lines 5a, b, and c.—The total of the

values listed on Schedule M must be

reduced by the amount of the Federal

estate tax, the Federal GST tax, and the

amount of state or other death and GST

taxes paid out of the property interest

involved. If you enter an amount for

state or other death or GST taxes on

lines 5b or 5c, identify the taxes and

attach your computation of them.

Attachments.—If you list property

interests passing by the decedent’s will

on Schedule M, attach a certified copy

of the order admitting the will to

probate. If, when you file the return, the

court of probate jurisdiction has entered

any decree interpreting the will or any of

its provisions affecting any of the

interests listed on Schedule M, or has

entered any order of distribution, attach

a copy of the decree or order. In

addition, the District Director may

request other evidence to support the

marital 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), the following

information should be provided 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

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).
Form 706 (Rev. 4-97)

Estate of:

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

Yes No

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

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 planned?

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 Amount

1

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

3 Total 3

Federal estate tax (including section 4980A taxes) payable out of property

interests listed above

4a

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 a, 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 19

5

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

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

Schedule O— Page 31
Form 706 (Rev. 4-97)

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, 2011, 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 18 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 17 of the instructions).

Check here ©

Part 2.—Computation of Credit (see instructions beginning on page 17)

Transferor Total

A, B, & C Item

A B C

1 Transferee’s tax as apportioned (from worksheet,

(line 7 4 line 8) 3 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 3 line 4 for each column)

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

of line 5). Enter here and on line 19 of Part 2, Tax

Computation

6

Schedules P and Q— Page 32 (The instructions to Schedules P and Q are in the separate instructions.)
Form 706 (Rev. 4-97)

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 the GST exemption

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

filed to report estate or GST tax.

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

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 19 of the separate instructions for details.

1 Maximum allowable GST exemption 1 $1,000,000

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 intervivos 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 E

Trust’s inclusion

ratio (optional—see

instructions)

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.) Schedule R— Page 33

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

located inside the United States.

See instructions beginning on page 17.
Form 706 (Rev. 4-97)

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 Estate tax value

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 2.818182) 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 22 of the Tax

Computation on page 1

10

10

Schedule R— Page 34
Form 706 (Rev. 4-97)

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 Estate tax value

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 .55). Enter here and on Schedule R, Part 2, line 9 8

Schedule R— Page 35
SCHEDULE R-1 Generation-Skipping Transfer Tax (Form 706) Direct Skips From a Trust OMB No. 1545-0015 (Rev. April 1997)

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 separate instructions.

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 where Form 706 was filed

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 extensions)

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

Description of property interests subject to the direct skip Estate tax value

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 2.818182) (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 knowledge and belief,

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. 4-97)

Schedule R-1 (Form 706)— Page 37

Instructions for the Trustee

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

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

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

and keep one for your records.

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

● Make it payable to the “Internal Revenue Service.” (DO NOT abbreviate Internal Revenue

Service.)

● 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 (shown on the

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 tax. The

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

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 interest (but no

penalties).

Additional

information

For more information, see Code section 2603(a)(2) and the instructions for Form 706, United

States Estate (and Generation-Skipping Transfer) Tax Return.
Form 706 (Rev. 4-97)

Estate of:

SCHEDULE S—Increased Estate Tax on Excess Retirement Accumulations

(Under section 4980A(d) of the Internal Revenue Code)

Tax Computation

1 Check this box if a section 4980A(d)(5) spousal election is being made ©

You must attach the statement described in the instructions.

Enter the name and employer identification number (EIN) of each qualified employer plan and individual retirement account in

which the decedent had an interest at the time of death:

2

Name EIN

Plan #1

Plan #2

Plan #3

IRA #1

IRA #2

IRA #3

A B D C

Plan #1 All IRAs

3 Value of decedent’s interest

4 Amounts rolled over after death

5 Total value (add lines 3 and 4)

6 Amounts payable to certain alternate payees (see page

20 of the instructions)

7 Decedent’s investment in the contract under section 72(f)

8 Excess life insurance amount

9 Decedent’s interest as a beneficiary

10 Total reductions in value (add lines 6, 7, 8, and 9)

Net value of decedent’s interest (subtract line 10 from 

line 5)

11

12 Decedent’s aggregate interest in all plans and IRAs (add columns A–D of line 11) © 12

13 Present value of hypothetical life annuity (from Part III, line 4) 13

14 Remaining unused grandfather amount (from Part II, line 4) 14

15 Enter the greater of line 13 or line 14 15

16 Excess retirement accumulation (subtract line 15 from line 12) 16

17

Increased estate tax (multiply line 16 by 15%). Enter here and on line 23 of the Tax Computation on

page 1

17

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

Schedule S— Page 38

Plan #2 Plan #3

Part I
Form 706 (Rev. 4-97)

Grandfather Election

1 Was a grandfather election made on a previously filed Form 5329? © Yes No

If “Yes,” complete lines 2–4 below. You may not make or revoke the grandfather election after

the due date (with extensions) for filing the decedent’s 1988 income tax return. If “No,” enter

-0- on line 4 and skip to Part III.

2 Initial grandfather amount 2

3 Total amount previously recovered 3

4 Remaining unused grandfather amount (subtract line 3 from line 2). Enter here and on Part I, line 14,

on page 38 4

Computation of Hypothetical Life Annuity

1 Decedent’s attained age at date of death (in whole years, rounded down) 1

2 Applicable annual annuity amount (see page 21 of the instructions) 2

3 Present value multiplier (see page 21 of the instructions) 3

Present value of hypothetical life annuity (multiply line 2 by line 3). Enter here and on Part I, line 13,

on page 38

4

4

Schedule S— Page 39

Part II

Part III
Form 706 (Rev. 4-97) (Make copies of this schedule before completing it if you will need more than one schedule.)

Estate of:

CONTINUATION SCHEDULE

Continuation of Schedule

(Enter letter of schedule you are continuing.)

Value at date of

death or amount

deductible

Alternate

valuation date

Description

For securities, give CUSIP number, if available.

Item

number

Unit value

(Sch. B, E, or G 

only)

Alternate value

TOTAL. (Carry forward to main schedule.)

See the instructions on the reverse side. Continuation Schedule— Page 40
Form 706 (Rev. 4-97)

Instructions for Continuation Schedule

Continuation Schedule— Page 41

When you need to list more assets or deductions than you have room for on one of the main

schedules, use the Continuation Schedule on page 40. It provides a uniform format for listing

additional assets from Schedules A through I and additional deductions from Schedules J, K,

L, M, and O.

Please keep the following points in mind:

● Use a separate Continuation Schedule for each main schedule you are continuing. Do not

combine assets or deductions from different schedules on one Continuation Schedule.

● Make copies of the blank schedule before completing it if you expect to need more than

one.

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

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

Continuation Schedule.

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

use this space to continue the description.

● Carry the total from the Continuation Schedule(s) forward to the appropriate line on the main

schedule.

If continuing Report Where on Continuation

Schedule

Schedule E, Pt. 2 Percentage includible Alternate valuation date

Schedule K Amount unpaid to date Alternate valuation date

Schedule K Amount in contest Alternate value

Schedules J, L, M Description of deduction

continuation

Alternate valuation date and

Alternate value

Schedule O Character of institution Alternate valuation date and

Alternate value

Schedule O Amount of each deduction Amount deductible