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                                 NewMailingAddresses                     
Addressesformailingcertainformshavechangedsincetheformswerelastpublished.            Thenewmailing          
addressesareshownbelow.    

Mailingaddressfor   Forms706 A,706‐  GS(D),706‐  GS(T),706‐ NA,706 ‐ QDT,8612,8725,8831,8842, ‐          
8892,8924,8928:   

 DepartmentoftheTreasury     
 InternalRevenueServiceCenter    
 KansasCity,MO64999      
 
Mailingaddressfor   Forms2678,8716,8822   B,8832,8855:‐        

 TaxpayersintheStatesBelow                                                       MailtheFormtoThisAddress       
 Connecticut,Delaware,DistrictofColumbia,Georgia,Illinois,Indiana,                
 Kentucky,Maine,Maryland,Massachusetts,Michigan,NewHampshire,                    DepartmentoftheTreasury     
 NewJersey,NewYork,NorthCarolina,Ohio,Pennsylvania,RhodeIsland,                  InternalRevenueServiceCenter    
 SouthCarolina,Vermont,Virginia,WestVirginia,Wisconsin                           KansasCity,MO64999       
 Alabama,Alaska,Arizona,Arkansas,California,Colorado,Florida,Hawaii,              
 Idaho,Iowa,Kansas,Louisiana,Minnesota,Mississippi,Missouri,                     DepartmentoftheTreasury     
 Montana,Nebraska,Nevada,NewMexico,NorthDakota,Oklahoma,                         InternalRevenueServiceCenter    
 Oregon,SouthDakota,Tennessee,Texas,Utah,Washington,Wyoming                      Ogden,UT84201        
 
This update supplements these forms’ instructions. Filers should rely on this update for 
the changes described, which will be incorporated into the next revision of the forms’ 
instructions.

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Department of the Treasury
Instructions for Form 706-A Internal Revenue Service

(Rev. September 2016)
United States Additional Estate Tax Return
( For use with Form 706-A (Rev September 2013))
To report dispositions or cessations of qualified use under section 2032A of the Internal Revenue Code

Section references are to the Internal Revenue and write “Form 706-A” and the qualified derived), whichever is greater, for the
Code unless otherwise noted. heir's social security number on the preparation of each such return. See
check or money order. section 6694, T.D. 9436; 2009-3 I.R.B.
If you are making an election to 268, Notice 2008-11, 2008-3 I.R.B. 279;
Future Developments increase basis, see Basis on page 2 for Notice 2008-13, 2008-3 I.R.B. 282; and
For the latest information about information on paying interest. Notice 2008-46, 2008-18 I.R.B. 868 for
developments related to Form 706 and more details.
its instructions, such as legislation Where To File
Definitions
enacted after they were published, go to File Form 706-A at the following
www.irs.gov/form706-A. address. Specially valued property. The term
“specially valued property” means farm
General Instructions Department of the Treasury or closely held business property that
Internal Revenue Service Center the executor elected to value at actual
Purpose of Form Cincinnati, OH 45999 use rather than fair market value (FMV)
An heir must use Form 706-A to report (defined on page 3). The executor
the additional estate tax imposed by Statute of Limitations makes the election on Form 706, United
section 2032A(c) for an early disposition The additional estate tax may be States Estate (and Generation-Skipping
of specially valued property or for an assessed until 3 years after the IRS Transfer) Tax Return, filed for the
early cessation of a qualified use of receives notice that the qualified heir decedent. Specially valued property
specially valued property. disposed of the specially valued refers to the qualified real property
The recapture tax is limited to the tax property or ceased to use it for the described in section 2032A and
savings attributable to the property qualified use. includes qualified real property owned
indirectly, such as interests in certain
actually disposed of (or for which However, if the property was partnerships, corporations, and trusts as
qualified use ceased) rather than to the disposed of in an involuntary conversion described in section 2032A.
tax savings attributable to all the or in an exchange, the tax may be
If special valuation was elected on
specially valued property received by assessed up to 3 years after the IRS
Form 706, each qualified heir consented
the heir. receives notice that the property was
in writing to his or her personal liability
replaced or will not be replaced. See
for the additional estate tax attributable
Who Must File section 2032A(f) for details.
to his or her interest in the specially
The qualified heir must file Form 706-A valued property.
if there was any taxable event (see Lien
Taxable Events later) with respect to the If the estate elected special-use Qualified heir. The term “qualified
specially valued property even if no tax valuation, section 6324B establishes a heir” means, for any property, a member
is ultimately due. Further, the qualified special lien against the specially valued of the decedent's family who acquired
heir must file Form 706-A if there was property equal to the adjusted tax the property (or to whom the property
any involuntary conversion or exchange difference attributable to the special-use passes) from the decedent. If a qualified
of the specially valued property even if valuation. heir disposes of any interest in qualified
the conversion or exchange is real property to any member of his or
nontaxable. Penalties her family, that member shall thereafter
be treated as the qualified heir for the
When To File and Pay Return preparer. The Small Business interest.
File Form 706-A and pay any additional and Work Opportunity Tax Act of 2007
taxes due within 6 months after the (Act) extends the application of return Taxable Events
taxable disposition or cessation of the preparer penalties to preparers of estate The qualified heir causes a taxable
qualified use unless an extension of tax returns. Under section 6694, as event by disposing of any interest in the
time has been granted. amended by the Act, and the transitional specially valued property or ceasing to
relief provided by Notice 2007-54, use the specially valued property for its
Use Form 4768, Application for 2007-27 I.R.B. 12, and the final qualified use if:
Extension of Time To File a Return Regulations contain in Treasury The disposition or cessation of
and/or Pay U.S. Estate (and Decision 9436; 2009-1 CB 268, estate qualified use was before the death of
Generation-Skipping Transfer) Taxes, to tax return preparers, who prepare any the qualified heir and
apply for an automatic extension of time return or claim for refund which reflects The disposition or cessation was
to file. Check the “Form 706-A” box in an understatement of tax liability due to within 10 years after the decedent's
Part II of Form 4768. willful or reckless conduct, are subject death. (But see Two-Year Grace
Make the check or money order to a penalty of $5,000 or 75% of the
payable to the “United States Treasury” income derived (or income to be

Nov 08, 2016 Cat. No. 10142D

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Period—Commencement Date on                  1. Neither the decedent nor any              Required activities for material par-
page 3.)                                     member of the decedent's family              ticipation. See the Instructions for 
                                             materially participated in the operation     Form 706.
Only one additional estate tax will be       of the farm or other business (while the 
imposed with respect to any one part of      decedent held the property) and              Basis
specially valued property. For example, 
if additional estate tax is imposed for      2. Neither the qualified heir nor any        See section 1014(a) for the basis of 
early cessation of a qualified use, a        member of the qualified heir's family        property acquired from a decedent.
second additional estate tax will not be     materially participated in the operation 
imposed for a subsequent early               of the farm or other business (while the     Election to increase basis.    A 
disposition of the same part of the          heir held the property).                     qualified heir may elect to increase the 
                                                                                          basis of specially valued property when 
specially valued property.                   If the decedent was retired or               a taxable event (as defined on page 1) 
Disposition to family member.      A         disabled before death, there are special     occurs. If this election is made, the 
disposition of an interest in property to a  rules for applying the 8-year period to      basis of the property shall increase to 
family member of the qualified heir is a     paragraph (1) above. See section             the excess of the FMV amount on the 
taxable event that must be reported on       2032A(b)(4) and the Instructions for         decedent's date of death (or alternate 
Form 706-A. If the transferee enters into    Form 706.                                    valuation date, if applicable) over the 
an agreement to be personally liable for     Member of family.    The term “member        value amount determined under section 
any additional tax under section             of the family” includes only:                2032A. Once the election is made, it is 
2032A(c), the disposition is nontaxable      An ancestor (parent, grandparent,            irrevocable.
and you should enter it on Schedule C.       etc.) of the individual (where individual    To make the election, the qualified 
If the family member does not enter          refers to either the decedent or a           heir must:
into the agreement, the disposition is       qualified heir);                             Check the box on line 7 of Part I,
taxable and you should enter it on           The spouse of the individual;                Enter on line 20 of Part II the amount 
Schedule A.                                  A lineal descendant (child, stepchild,       of interest being paid on the additional 
                                             grandchild, etc.) of the individual, the     estate tax due, and
Disposition of timber.  If the executor 
                                             individual's spouse, or a parent of the      File with Form 706-A, a statement 
made a qualified woodlands election 
                                             individual; or                               that:
(section 2032A(e)(13)(A)), the 
                                             The spouse, widow, or widower of 
disposition or severing of timber from                                                      a. Contains the name, address, and 
                                             any lineal descendant described above.
the woodland is a disposition of a                                                            taxpayer identification number of the 
portion of the interest in the property.     A legally adopted child of an                    qualified heir and of the estate;
The disposition of a right to sever is       individual is treated as a child of that       b. Identifies the election as the 
treated as a disposition of the standing     individual by blood.                             election under section 1016(c); and
                                                                                            c. Specifies the property with 
timber.                                      Period of material participation. 
                                                                                              respect to which the election is 
The additional estate tax on this            To determine whether the material 
                                                                                              made.
disposition is the amount equal to the       participation requirement is satisfied, 
lesser of:                                   include periods during which the             A qualified heir who makes this 
The amount realized on the                   decedent's estate held the property.         election must pay interest on the 
                                                                                          additional estate tax calculated from the 
disposition (or, if other than a sale or     If a qualified heir dies before the 
                                                                                          date that is 9 months after the date of 
exchange at arm's length, the FMV of         required period has passed, any 
                                                                                          the decedent's death to the date of the 
the interest disposed of) or                 material participation requirement ends 
                                                                                          payment of the additional estate tax.
The amount of additional estate tax          for that heir's portion of the property, 
that would have been imposed if the          provided the heir received a separate or 
entire interest of the qualified heir in the other undivided interest from the            Two-Year Grace 
qualified woodland had been disposed         decedent.                                    Period—Commencement 
of, minus any additional estate tax 
imposed on all earlier transactions          If qualified heirs receive successive        Date
involving the woodland.                      interests in specially valued property       For the two years immediately following 
                                             (for example, a life estate and              the date of the decedent's death, the 
Cessation of qualified use.  The             remainder interests), the material           failure by the qualified heir to begin 
specially valued real property must be       participation requirement does not end       using the property in a qualified use will 
used as a farm for farming purposes, or      for any part of the property until the later not be considered a cessation of 
used in a trade or business other than       of the expiration of the recapture period    qualified use and therefore will not 
the trade or business of farming. For        or the death of the last qualified heir.     trigger the additional estate tax. The 
more details, see the Instructions for       In determining whether the required          date on which the qualified heir begins 
Form 706.                                    participation has occurred, disregard        to use the property in a qualified use is 
The qualified use ceases if the              brief periods (30 days or less) during       the commencement date.
specially valued real property is not        which there was no material 
used for the qualified use described         participation. But you may disregard         The 10-year recapture period is 
earlier. Use of the property as a farm or    these periods only if they were both         extended by the period after the 
other business is also considered to         preceded and followed by substantial         decedent's death and before the 
cease if, during any 8-year period that      periods (more than 120 days) in which        commencement date.
ends after the decedent's death, there       there was uninterrupted material 
                                                                                          For example, if the decedent died 
were periods totaling more than 3 years      participation.
during which:                                                                             February 28, 2011, and the 
                                                                                          commencement date is August 1, 2012, 

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the recapture period would begin Column C. Report in column C the Schedule B. Involuntary
August 1, 2012, and end July 31, 2022. date that the qualified heir disposed of Conversions or
the specially valued property or
How To Complete Form discontinued the qualified use. Exchanges
Involuntary conversions of qualified real
706-A Column D. If the qualified heir property (under the rules of section
You may file Form 706-A for only one disposed of the specially valued 1033) and exchanges of qualified real
qualified heir. If a disposition, cessation, property in an arm's length transaction, property (under the rules of section
involuntary conversion, or exchange report in column D the amount realized. 1031) are treated similarly when
involves more than one qualified heir,
each heir must file a separate Form Arm's length transaction. An arm's computing the additional estate tax on
706-A. length transaction is a transaction where Form 706-A.
there is no bargain or gift element for The rules later apply to all qualified
Complete Form 706-A in this order: affection or other reasons. heirs, whether or not they made an
1. Part I, election, for involuntary conversions and
Amount realized. The amount
2. Schedules A and B, realized is the sum of the money exchanges occurring after 1981.
3. Part II, received plus the FMV of property (other If you are reporting an involuntary
4. Schedule C. than money) received. For the real conversion or exchange, you may not
property taxes that must be taken into use the same Form 706-A to report any
Note. The qualified heir must sign the account, see section 1001(b). cessations or other dispositions that are
return. If the qualified heir owned only a part not involuntary conversions or
of the specially valued property, report exchanges. Use a separate Form 706-A
in column D the pro rata share of the for the cessations or other dispositions.
Specific Instructions amount realized that is allocable to the
part owned by the qualified heir. You may report conversions and
Valuation exchanges together on the same return.
If the specially valued property is
When computing the amounts to enter Nontaxable Involuntary
disposed of by the qualified heir in other
on Form 706-A, use the same values
than an arm's length transaction, or if
and estate tax that the executor Conversions or Exchanges
the qualified use is discontinued by the
reported on the Form 706 filed for the If the qualified heir reinvests all of the
qualified heir, report in column D the
decedent. However, if the IRS has involuntary conversion proceeds in
FMV of the specially valued property as
completed the audit of the estate tax qualified replacement property or if the
of the date of disposition or cessation of
return, use the agreed values and tax qualified heir exchanges qualified real
qualified use.
rather than the reported values and tax. property solely for qualified exchange
Fair market value. Fair market property, then there is no additional
Schedule A. Disposition of value (FMV) is the price at which the estate tax.
Specially Valued Property property would change hands between You should complete Form 706-A,
a willing buyer and a willing seller, even though there is no tax, to notify the
or Cessation of Qualified neither being under any compulsion to IRS that the involuntary conversion or
Use buy or to sell and both having exchange took place. However, you
On Schedule A, list every specially reasonable knowledge of relevant facts. must complete only Part I, Schedule B,
valued property interest that the For additional information and and Schedule A. Write “nontaxable” on
qualified heir disposed of or examples, see Regulations section line 19 of Part II.
discontinued use of since the date of the 20.2031-1(b). If the qualified heir owned
decedent's death and for which a Form only a part of the specially valued Partially Taxable Involuntary
706-A has not been previously filed. Do property, report in column D the pro rata Conversions or Exchanges
not list any interests that have already share of the FMV allocable to the part If the cost of the qualified replacement
been reported on Schedule A or B of a owned by the qualified heir. property is less than the amount
previously filed Form 706-A. In general, realized in the involuntary conversion or
do not list property interests disposed of Column E. Report in column E the
to family members of the qualified heir. special-use value at the date of the if other property in addition to qualified
These interests should be listed on decedent's death (or alternate valuation exchange property is received in the
Schedule C. date) of the specially valued property exchange, the conversion or exchange
that passed from the decedent to the is partially taxable. You should complete
Column A. Number and list the qualified heir who disposed of the all of Form 706-A and determine the tax
property interests in chronological order property or discontinued the qualified using Part II.
of disposition or cessation. use. Use the same special-use value List on Schedule A all specially
Column B. Use the same description in that the executor reported on the Form valued property that the qualified heir
column B that the executor used for the 706 filed for the decedent's estate. If the disposed of or discontinued use of,
specially valued property on the Form IRS has completed the audit of the regardless of whether he or she
706 filed for the decedent. Please estate tax return, use the agreed value received replacement or exchange
include in column B the schedule and rather than the reported value. If the property for it. List on Schedule B only
item number where the specially valued qualified heir owned only a part of the the replacement or exchange property
property was reported on the Form 706 specially valued property, report in the qualified heir actually received.
filed for the decedent's estate. column E the pro rata share of the
special-use value allocable to the part
owned by the qualified heir.

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Qualified Replacement or Line 3a Paid Preparer
Exchange Property Enter the amount of the estate tax for Authorization
Qualified replacement property means the decedent's estate that is If you want to allow the IRS to discuss
any real property that is to be used for recomputed using FMV at the estate tax the tax return with the paid preparer who
the qualified use and that: valuation date rather than actual use signed it, check the “Yes” box in the
Was acquired in an exchange that value. Attach a schedule showing the signature area of the return. This
qualified under section 1031, recomputed estate tax. authorization applies only to the
Was purchased by the qualified heir individual whose signature appears in
within the time specified by section Schedule C. Dispositions the Paid Preparer Use Only section of
1033 to replace the qualified property, to Family Members of the the return. It does not apply to the firm, if
or any, shown in that section. If the “Yes”
Is real property into which the Qualified Heir
box is checked, you are authorizing the
qualified real property has been Agreement by transferee. You may IRS to call the paid preparer to answer
converted. enter a disposition to a family member any questions that may arise during the
of the qualified heir on Schedule C only processing of its return. You are also
Qualified exchange property means if you file this Form 706-A on time authorizing the paid preparer to:
any real property that is to be used for (including extensions) and attach an Give the IRS any information that is
the same qualified use that the property agreement by the transferee to be missing from your return,
for which it was exchanged was used. personally liable for any additional Call the IRS for information about the
estate tax under section 2032A(c) on processing of your return or the status of
The period of the decedent's or the interest received. For a format of the any refund or payment(s), and
family member's ownership, qualified agreement, see Form 706, Respond to certain IRS notices that
use, or material participation with Schedule A-1. you may have shared with the preparer
respect to replaced or exchanged about math errors, offsets, and return
property is treated as the period of If you are not filing this Form 706-A
ownership, qualified use, or material on time, or if the transferee does not preparation.
participation with respect to the qualified enter into the agreement, you must The notices will not be sent to the
replacement or exchange property. This enter the disposition(s) on Schedule A preparer. You are not authorizing the
applies only to that part of the FMV of instead of Schedule C. paid preparer to receive any refund
check, bind you to anything (including
the replacement or exchange property How To Complete any additional tax liability), or otherwise
(at the date of acquisition) that does not Schedule C represent you before the IRS. If you
exceed the FMV of the replaced or want to expand the paid preparer’s
exchanged property (at the date of See the instructions for completing
disposition). columns A, B, and C of Schedule A on authorization, see Pub. 947, Practice
page 3. Before the IRS and Power of Attorney.
Note. The 10-year recapture period is However, the authorization will
extended under certain circumstances. Signature(s) automatically end no later than the due
date (excluding extensions) for filing the
See Two-Year Grace Form 706-A must be signed. The
tax return. If you want to revoke the
Period—Commencement Date earlier. taxpayer (or person filing on his or her
authorization before it ends, see Pub.
behalf) must verify and sign the
947.
How To Complete declaration on page 1 under penalties of
Schedule B perjury. The taxpayer may use Form Privacy Act and Paperwork Reduc-
Column A. Make one entry for each 2848, Power of Attorney and tion Act Notice. We ask for the
item of qualified replacement or Declaration of Representative, to information on this form to carry out the
exchange property. authorize another person to act for him Internal Revenue laws of the United
or her before the Internal Revenue States. We need it to figure and collect
Column B. Describe the qualified Service. the right amount of tax. Subtitle B,
replacement property with enough detail
so that the IRS can locate and value it. Generally, anyone who is paid to Estate and Gift Taxes, of the Internal
For more information, see the prepare the return must sign the return Revenue Code, imposes a tax in some
instructions to Schedule A of Form 706. in the space provided and fill in the Paid cases on qualified heirs who dispose of
Preparer's Use Only area. See section property valued under special valuation
Column C. For an involuntary 7701(a)(36)(B) for exceptions. rules. This form is used to determine the
conversion, enter the cost of the amount of the taxes that you owe.
replacement property. For an exchange, In addition to signing and completing Section 6011 requires you to provide
enter the FMV of the replacement the required information, the paid the requested information if the tax is
property. preparer must give a copy of the applicable to you. Section 6109 requires
completed return to the taxpayer. you to provide your identifying number.
Part II—Tax Computation
Note. A paid preparer may sign original Generally, tax returns and return
Line 2 or amended returns by rubber stamp, information are confidential, as required
Enter the total value at the estate tax mechanical device, or computer by section 6103. However, section 6103
valuation date of all specially valued software program. allows or requires the Internal Revenue
property that the executor elected, on Service to disclose or give such
the Form 706 filed for the decedent's information shown on your Form 706-A
estate, to value at actual use rather than to the Department of Justice to enforce
FMV. the tax laws, both civil and criminal, and

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to cities, states, the District of Columbia, may become material in the If you have comments concerning the
U.S. commonwealths or possessions, administration of any Internal Revenue accuracy of these time estimates or
and certain foreign governments for use law. suggestions for making this form
in administering their tax laws. We may simpler, we would be happy to hear
also disclose this information to other The time needed to complete and file from you. You can send your comments
countries under a tax treaty, to federal this form will vary depending on to:
nontax criminal laws, or to federal law individual circumstances. The estimated
enforcement and intelligence agencies average time is: Internal Revenue Service
to combat terrorism. If you fail to provide Tax Forms and Publications
this information in a timely manner, you Recordkeeping 3 hr., 17 min. Division
may be subject to penalties and interest. Learning about the law 1111 Constitution Ave. NW,
You are not required to provide the or the form 2 hr., 11 min. IR-6526
Washington, DC 20224
information requested on a form that is Preparing the form 1 hr., 39 min.
subject to the Paperwork Reduction Act
Copying, assembling, Do not send the tax form to this office.
unless the form displays a valid OMB and sending the form Instead, see Where To File.
control number. Books or records to the IRS 1 hr., 3 min.
relating to a form or its instructions must
be retained as long as their contents

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