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                                                                                            Department of the Treasury
                                                                                            Internal Revenue Service
Instructions for Form 706

(Rev. September 2023)

For decedents dying after December 31, 2022
United States Estate (and Generation-Skipping Transfer) Tax Return

Section references are to the Internal Revenue Code unless      certain estates to obtain an extension of time to file a return 
otherwise noted.                                                on or before the fifth anniversary of the decedent’s death to 
                                                                elect portability of the deceased spousal unused exclusion 
Revisions of Form 706                                           (DSUE) amount. See Extension to elect portability, later, for 
                                                                more information.
            For Decedents Dying           Use Revision of 
   After              and Before          Form 706 Dated
December 31, 1998     January 1, 2001     July 1999             General Instructions
December 31, 2000     January 1, 2002     November 2001
December 31, 2001     January 1, 2003     August 2002           Purpose of Form
December 31, 2002     January 1, 2004     August 2003
December 31, 2003     January 1, 2005     August 2004           The executor of a decedent's estate uses Form 706 to figure 
December 31, 2004     January 1, 2006     August 2005           the estate tax imposed by chapter 11 of the Internal Revenue 
December 31, 2005     January 1, 2007     October 2006          Code. This tax is levied on the entire taxable estate and not 
December 31, 2006     January 1, 2008     September 2007        just on the share received by a particular beneficiary. Form 
December 31, 2007     January 1, 2009     August 2008           706 is also used to figure the generation-skipping transfer 
December 31, 2008     January 1, 2010     September 2009        (GST) tax imposed by chapter 13 on direct skips (transfers to 
December 31, 2009     January 1, 2011     July 2011             skip persons of interests in property included in the 
December 31, 2010     January 1, 2012     August 2011
December 31, 2011     January 1, 2013     August 2012           decedent's gross estate).
December 31, 2012     January 1, 2017     August 2013
December 31, 2016     January 1, 2018     August 2017           Which Estates Must File
December 31, 2017     January 1, 2019     November 2018         For decedents who died in 2023, Form 706 must be filed by 
December 31, 2018                         August 2019           the executor of the estate of every U.S. citizen or resident:
                                                                  a. Whose gross estate, plus adjusted taxable gifts and 
Future Developments                                               specific exemption, is more than $12,920,000; or
                                                                  b. Whose executor elects to transfer the deceased 
For the latest information about developments related to          spousal unused exclusion (DSUE) amount to the 
Form 706 and its instructions, such as legislation enacted        surviving spouse, regardless of the size of the decedent's 
after they were published, go to IRS.gov/Form706.                 gross estate. See the instructions for Part 6—Portability 
                                                                  of Deceased Spousal Unused Exclusion, later, and 
                                                                  sections 2010(c)(4) and (c)(5).
What's New                                                       To determine whether you must file a return for the estate 
Various dollar amounts and limitations in Form 706 are          under (a) above, add:
indexed for inflation. For decedents dying in 2023, the         1. The adjusted taxable gifts (as defined in section 2503) 
following amounts are applicable.                                 made by the decedent after December 31, 1976;
•  The basic exclusion amount is $12,920,000.
•  The ceiling on special-use valuation is $1,310,000.          2. The total specific exemption allowed under section 2521 
•  The amount used in figuring the 2% portion of estate tax       (as in effect before its repeal by the Tax Reform Act of 
   payable in installments is $1,750,000.                         1976) for gifts made by the decedent after September 8, 
•  The basic credit amount is $5,113,800.                         1976; and
The IRS will publish amounts for future years in annual         3. The decedent's gross estate valued as of the date of 
revenue procedures.                                               death.

Reminders                                                       Gross Estate
Schedule R-1 is a separate form.  Schedule R-1 isn’t part       The gross estate includes all property in which the decedent 
of Form 706; instead, you will need to obtain a separate        had an interest (including property outside the United 
Schedule R-1 to complete and file with Form 706.                States). It also includes:
                                                                • Certain transfers made during the decedent's life without 
Identifying exhibits. Copies of tax returns filed with Form       an adequate and full consideration in money or money's 
706 must be identified as exhibits to the Form 706.               worth,
Estate tax closing letter fee.    Effective October 28, 2021, a • Annuities,
user fee of $67 was established for persons requesting the      • The includible portion of joint estates with right of 
issuance of an estate tax closing letter (ETCL). See ETCL         survivorship (see the instructions for Schedule E),
fee, later, for more information.                               • The includible portion of tenancies by the entirety (see 
                                                                  the instructions for Schedule E),
Extension of time to elect portability. Effective July 8, 
2022, Rev. Proc. 2022-32 provides a simplified method for 

Sep 5, 2023                                              Cat. No. 16779E

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• Certain life insurance proceeds (even though payable to 
                                                                      When To File
  beneficiaries other than the estate) (see the instructions 
  for Schedule D),                                                    You must file Form 706 to report estate and/or GST tax within 
• Digital assets (see the instructions for Schedule F),               9 months after the date of the decedent's death. If you are 
• Property over which the decedent possessed a general                unable to file Form 706 by the due date, you may receive an 
  power of appointment,                                               extension of time to file. Use Form 4768, Application for 
• Dower or curtesy (or statutory estate) of the surviving             Extension of Time To File a Return and/or Pay U.S. Estate 
  spouse, and                                                         (and Generation-Skipping Transfer) Taxes, to apply for an 
• Community property to the extent of the decedent's                  automatic 6-month extension of time to file.
  interest as defined by applicable law.                              Portability election. An executor can only elect to transfer 
                                                                      the DSUE amount to the surviving spouse if the Form 706 is 
Note. Under the special rule of Regulations section                   filed timely, that is, within 9 months of the decedent's date of 
20.2010-2(a)(7)(ii), executors of estates who are not required        death or, if you have received an extension of time to file, 
to file Form 706 under section 6018(a), but who are filing to         before the 6-month extension period ends.
elect portability of the DSUE amount to the surviving spouse,         Extension to elect portability.    Executors who did not 
are not required to report the value of certain property eligible     have a filing requirement under section 6018(a) but failed to 
for the marital deduction under section 2056 or 2056A or the          timely file Form 706 to make the portability election may be 
charitable deduction under section 2055. However, the value           eligible for an extension under Rev. Proc. 2022-32, 2022-30 
of those assets must be estimated and included in the total           I.R.B. 101 (superseding Rev. Proc. 2017-34, 2017-26 I.R.B. 
value of the gross estate. See the instructions for Part              1282). Executors filing to elect portability may now file Form 
5—Recapitulation, items 10 and 23, later, for more                    706 on or before the fifth anniversary of the decedent’s death.
information.
                                                                      An executor wishing to elect portability under this 
For more specific information, see the instructions for               extension must state at the top of the Form 706 being filed 
Schedules A through I.                                                that the return is “Filed Pursuant to Rev. Proc. 2022-32 to 
                                                                      Elect Portability under section 2010(c)(5)(A).” For more 
U.S. Citizens or Residents; Nonresident                               information on this extension, see Rev. Proc. 2022-32.
Noncitizens
                                                                      Note. Any estate that is filing an estate tax return only to 
File Form 706 for the estates of decedents who were either            elect portability and did not file timely or within the extension 
U.S. citizens or U.S. residents at the time of death. For estate      provided in Rev. Proc. 2022-32 may seek relief under 
tax purposes, a resident is someone who had a domicile in             Regulations section 301.9100-3 to make the portability 
the United States at the time of death. A person acquires a           election.
domicile by living in a place for even a brief period of time, as 
long as the person had no intention of moving from that               Where To File
place. See Regulations section 20.0-1(b).                             File Form 706 at the following address.
Decedents who were neither U.S. citizens nor U.S.                     Department of the Treasury
residents at the time of death file Form 706-NA, United               Internal Revenue Service
States Estate (and Generation-Skipping Transfer) Tax Return,          Kansas City, MO 64999
Estate of nonresident not a citizen of the United States.
Residents of U.S. Possessions                                         If you’re using a private delivery service (PDS), file at this 
                                                                      address.
All references to citizens of the United States are subject to 
the provisions of sections 2208 and 2209, relating to                 Internal Revenue Submission Processing Center
decedents who were U.S. citizens and residents of a U.S.              333 W. Pershing Road
possession on the date of death. If such decedents became             Kansas City, MO 64108
U.S. citizens only because of their connections with a 
possession, then the decedents are considered nonresidents            If you’re filing an amended Form 706, use the following 
not citizens of the United States for estate tax purposes, and        address.
you should file Form 706-NA. If such decedents became U.S. 
citizens wholly independently of their connections with a             Internal Revenue Service Center
possession, then the decedents are considered U.S. citizens           Attn: E&G, Stop 824G
for estate tax purposes, and you should file Form 706.                7940 Kentucky Drive
                                                                      Florence, KY 41042-2915
Executor
The term “executor” includes the executor, personal                   If you’re using a PDS for your amended Form 706, use this 
representative, or administrator of the decedent's estate. If         address.
none of these is appointed, qualified, and acting in the United 
States, every person in actual or constructive possession of          Internal Revenue Service Center
any property of the decedent is considered an executor and            Attn: E&G, Stop 824G
must file a return.                                                   7940 Kentucky Drive
                                                                      Florence, KY 41042-2915
Executors must provide documentation proving their 
status. Documentations will vary but may include documents 
such as certified copies of wills or court orders designating 
the executor(s). Statements by executors attesting to their 
status are insufficient.

                                                                  -2-          Instructions for Form 706 (Rev. 09-2023)

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                                                                     The executor who files the return must, in every case, sign 
Paying the Tax
                                                                     the declaration on page 1 under penalties of perjury.
The estate and GST taxes are due within 9 months of the 
date of the decedent's death. You may request an extension           Generally, anyone who is paid to prepare the return must 
of time for payment by filing Form 4768. You may also elect          sign the return in the space provided and fill in the Paid 
under section 6166 to pay in installments or under section           Preparer Use Only area. See section 7701(a)(36)(B) for 
6163 to postpone the part of the tax attributable to a               exceptions.
reversionary or remainder interest. These elections are made 
                                                                     In addition to signing and completing the required 
by checking “Yes” on lines 3 and 4 (respectively) of Part 
                                                                     information, the paid preparer must give a copy of the 
3—Elections by the Executor and attaching the required 
                                                                     completed return to the executor.
statements.
If the tax paid with the return is different from the balance        Note. A paid preparer may sign original or amended returns 
due as figured on the return, explain the difference in an           by rubber stamp, mechanical device, or computer software 
attached statement. If you have made prior payments to the           program.
IRS, attach a statement to Form 706 including these facts.
                                                                     Amending Form 706
Paying by check. Make the check payable to “United States 
Treasury.” Please write the decedent's name, social security         If you find that you must change something on a return that 
number (SSN), and “Form 706” on the check to assist us in            has already been filed, you should:
posting it to the proper account.                                    • File another Form 706;
No checks of $100 million or more accepted.          The IRS         • Enter “Supplemental Information” across the top of 
cannot accept a single check (including a cashier's check) for         page 1 of the form;
amounts of $100,000,000 ($100 million) or more. If you're            • Include a statement of what has changed, along with the 
sending $100 million or more by check, you'll need to spread           supporting information; and
the payments over 2 or more checks, with each check made             • Attach a copy of pages 1, 2, 3, and 4 of the original Form 
out for an amount less than $100 million. The $100 million or          706 that has already been filed.
more amount limit does not apply to other methods of                 For the mailing address for supplemental Form 706, see 
payment (such as electronic payments). Please consider a             Filing Estate and Gift Tax Returns.
method of payment other than a check if the amount of the 
payment is over $100 million.                                        File the amended Form 706 at the following address.
Paying electronically. Payment of the tax due shown on                 Internal Revenue Service Center
Form 706 may be submitted electronically through the                   Attn: E&G, Stop 824G
Electronic Federal Tax Payment System (EFTPS). EFTPS is                7940 Kentucky Drive
a free service of the Department of the Treasury.                      Florence, KY 41042-2915
To be considered timely, payments made through EFTPS 
must be completed no later than 8 p.m. Eastern time the day          If you’re using a PDS, file at this address.
before the due date. All EFTPS payments must be scheduled 
in advance of the due date and, if necessary, may be                   Internal Revenue Service Center
changed or canceled up to 2 business days before the                   Attn: E&G, Stop 824G
scheduled payment date.                                                7940 Kentucky Drive
                                                                       Florence, KY 41042-2915
To get more information about EFTPS or to enroll in 
EFTPS, visit EFTPS.gov or call 800-555-4477. To contact 
EFTPS using Telecommunications Relay Service (TRS) for               If you have already been notified that the return has been 
people who are deaf, hard of hearing, or have a speech               selected for examination, you should provide the additional 
disability, dial 711 and then provide the TRS assistant the          information directly to the office conducting the examination.
800-555-4477 number, above, or 800-733-4829. Additional 
                                                                     Supplemental Documents
information about EFTPS is available in Pub. 966, Electronic 
Federal Tax Payment System: A Guide to Getting Started.              Note. You must attach the death certificate to the return.
                                                                     If the decedent was a citizen or resident of the United 
Signature and Verification                                           States and died testate (leaving a valid will), attach a certified 
        If there is more than one executor, all listed executors     copy of the will to the return. If you cannot obtain a certified 
                                                                     copy, attach a copy of the will and an explanation of why it is 
!       are responsible for the return. However, it is sufficient    not certified. Other supplemental documents may be 
CAUTION for only one of the co-executors to sign the return.
                                                                     required, as explained later. Examples include Form 712, Life 
All executors are responsible for the return as filed and are        Insurance Statement; Form 709, United States Gift (and 
liable for penalties imposed for erroneous or false returns.         Generation-Skipping Transfer) Tax Return; Form 706-CE, 
If two or more persons are liable for filing the return, they        Certificate of Payment of Foreign Death Tax; trust and power 
should all join together in filing one complete return.              of appointment instruments; and state certification of 
However, if they are unable to join in making one complete           payment of death taxes. If you do not file these documents 
return, each is required to file a return disclosing all the         with the return, the processing of the return will be delayed.
information the person has about the estate, including the           If the decedent was a U.S. citizen but not a resident of the 
name of every person holding an interest in the property and 
                                                                     United States, you must attach the following documents to 
a full description of the property. If the appointed, qualified,     the return.
and acting executor is unable to make a complete return, 
then every person holding an interest in the property must, on       1. A copy of the inventory of property and the schedule of 
notice from the IRS, make a return regarding that interest.            liabilities, claims against the estate, and expenses of 

Instructions for Form 706 (Rev. 09-2023)                          -3-

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administration filed with the foreign court of probate 
                                                                       Consistent Basis Reporting
jurisdiction, certified by a proper official of the court.
                                                                       Certain estates are required to report to the IRS and the 
2. A copy of the return filed under the foreign inheritance,           recipient, the estate tax value of each asset included in the 
estate, legacy, succession tax, or other death tax act,                gross estate within 30 days of the due date (including 
certified by a proper official of the foreign tax                      extensions) of Form 706 or the date of filing Form 706 if the 
department, if the estate is subject to such a foreign tax.            return is filed late. The basis of certain assets when sold or 
3. If the decedent died testate, a certified copy of the will.         otherwise disposed of must be consistent with the basis 
                                                                       (estate tax value) of the asset when it was received by the 
Rounding Off to Whole Dollars                                          beneficiary. To satisfy the consistent basis reporting 
                                                                       requirements, the estate must file Form 8971, Information 
You may round off cents to whole dollars on the return and             Regarding Beneficiaries Acquiring Property From a 
schedules. If you do round to whole dollars, you must round            Decedent, separately from the Form 706. Failure to file Form 
all amounts. To round, drop amounts under 50 cents and                 8971, when required, is subject to information return 
increase amounts from 50 to 99 cents to the next dollar. For           penalties under sections 6721 and 6722. See Form 8971 and 
example, $1.39 becomes $1 and $2.50 becomes $3.                        its instructions for more information.

Penalties                                                              Estate Tax Closing Letters
Late filing and late payment.     Section 6651 provides for            An estate tax closing letter (ETCL) will not be issued unless a 
penalties for both late filing and for late payment unless there       request is made via Pay.gov. To allow time for processing, 
is reasonable cause for the delay. The law also provides for           please wait at least 9 months after filing Form 706 to request 
penalties for willful attempts to evade payment of tax. The            an ETCL.
late filing penalty will not be imposed if the taxpayer can show 
                                                                       ETCL fee. Effective October 28, 2021, final regulations TD 
that the failure to file a timely return is due to reasonable 
                                                                       9957 established a user fee of $67 for persons requesting the 
cause.
                                                                       issuance of an ETCL. To make an ETCL request after 
Reasonable-cause determinations.      If you receive a notice          October 28, 2021, you must go to Pay.gov to submit a 
about penalties after you file Form 706, send an explanation           request and pay the user fee. Go to Frequently Asked 
and we will determine if you meet reasonable-cause criteria.           Questions on the Estate Tax Closing Letter, for instructions 
Do not attach an explanation when you file Form 706.                   and more information related to ETCLs.
Explanations attached to the return at the time of filing will not 
                                                                       Account transcript in lieu of ETCL.   Instead of an ETCL, 
be considered.
                                                                       the executor of the estate may request an account transcript, 
Valuation understatement. Section 6662 provides a 20%                  which reflects transactions including the acceptance of Form 
penalty for the underpayment of estate tax that exceeds                706 or the completion of an examination. Account transcripts 
$5,000 when the underpayment is attributable to valuation              are available online to registered tax professionals using the 
understatements. A valuation understatement occurs when                Transcript Delivery System (TDS) or to authorized 
the value of property reported on Form 706 is 65% or less of           representatives making requests using Form 4506-T. Go to 
the actual value of the property.                                      Transcripts in Lieu of Estate Tax Closing Letters for specific 
This penalty increases to 40% if there is a gross valuation            instructions to request online transcripts using the TDS or 
understatement. A gross valuation understatement occurs if             hardcopy transcripts using Form 4506-T.
any property on the return is valued at 40% or less of the 
value determined to be correct.                                        Note. For information about the release of nonresident U.S. 
                                                                       citizen decedents' assets using transfer certificates under 
Penalties also apply to late filing, late payment, and 
                                                                       Regulations section 20.6325-1, go to Transfer Certificate 
underpayment of GST taxes.
                                                                       Filing Requirements for the Estates of Nonresident Citizens 
Return preparer. Estate tax return preparers who prepare               of the United States or write to:
any return or claim for refund which reflects an 
understatement of tax liability due to an unreasonable                   Internal Revenue Service Center
position are subject to a penalty equal to the greater of                Attn: E&G, Stop 824G
$1,000 or 50% of the income earned (or to be earned) for the             7940 Kentucky Drive
preparation of each such return.                                         Florence, KY 41042-2915
Estate tax return preparers who prepare a return or claim 
for refund which reflects an understatement of tax liability due       Obtaining Forms and Publications To 
to willful or reckless conduct are subject to a penalty of 
$5,000 or 75% of the income earned (or income to be                    File or Use
earned), whichever is greater, for the preparation of each             Internet. You can access the IRS website at IRS.gov 24 
such return.                                                           hours a day, 7 days a week to:
Estate tax return preparers who prepare any return or                  • Download forms, including talking tax forms, instructions, 
claim for a refund are required to furnish a copy to the                 and publications;
taxpayer, sign the return, and provide their PTIN, but who fail        • Order IRS products online;
to do so, are subject to a penalty of $50 for such failure,            • Research your tax questions online;
unless it is shown that such failure is due to reasonable              • Search publications online by topic or keyword;
cause and not due to willful neglect.                                  • Use the online Internal Revenue Code, regulations, or 
See sections 6694 and 6695, the related regulations, and                 other official guidance;
Announcement 2009-15, 2009-11 I.R.B. 687, available at                 • View Internal Revenue Bulletins (IRBs) published in the 
Announcement 2009-15, for more information.                              last few years; and

                                                                   -4-                     Instructions for Form 706 (Rev. 09-2023)

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• Sign up to receive local and national tax news by email.                   IF . . .                       THEN . . .
Other forms that may be required.                                            there is not enough space on a attach a Continuation Schedule (or 
• Form SS-5, Application for a Social Security Card.                         schedule to list all the items additional sheets of the same size) to 
• Form 706-CE, Certificate of Payment of Foreign Death                                                      the back of the schedule (see the 
  Tax.                                                                                                      Continuation Schedule at the end of 
• Form 706-NA, United States Estate (and                                                                    Form 706); photocopy the blank 
  Generation-Skipping Transfer) Tax Return, Estate of                                                       schedule before completing it, if you 
  nonresident not a citizen of the United States.                                                           will need more than one copy.
• Form 709, United States Gift (and Generation-Skipping 
  Transfer) Tax Return.
• Form 712, Life Insurance Statement.                                         Also consider the following.
• Form 2848, Power of Attorney and Declaration of                            • Form 706 has 29 numbered pages.
  Representative.                                                            • Number the items you list on each schedule, beginning 
• Form 4768, Application for Extension of Time To File a                       with the number “1” each time, or using the numbering 
  Return and/or Pay U.S. Estate (and Generation-Skipping                       convention as indicated on the schedule (for example, 
  Transfer) Taxes.                                                             Schedule M).
• Form 4808, Computation of Credit for Gift Tax.                             • Total the items listed on the schedule and its 
• Form 8821, Tax Information Authorization.                                    attachments, Continuation Schedules, etc.
• Form 8822, Change of Address.                                              • Enter the total of all attachments, Continuation 
• Form 8971, Information Regarding Beneficiaries                               Schedules, etc., at the bottom of the printed schedule, 
  Acquiring Property From a Decedent.                                          but do not carry the totals forward from one schedule to 
                                                                               the next.
Additional Information.         Pub. 559, Survivors, Executors,                Enter the total, or totals, for each schedule on page 3, 
                                                                             •
and Administrators, may assist you in learning about and                       Part 5—Recapitulation.
preparing Form 706.                                                            Do not complete the “Alternate valuation date” or 
                                                                             •
                                                                               “Alternate value” columns of any schedule unless you 
Specific Instructions                                                          elected alternate valuation on Part 3—Elections by the 
                                                                               Executor, line 1.
You must file the first four pages of Form 706 and all required              • When you complete the return, staple all the required 
schedules. File Schedules A through I, as appropriate, to                      pages together in the proper order.
support the entries in items 1 through 9 of Part 
5—Recapitulation.
                                                                             Part 1—Decedent and Executor
         Make sure to complete the required pages and 
!        schedules in their entirety. Returns filed without                  Line 2
CAUTION  entries in each field will not be processed.
                                                                             Enter the SSN assigned specifically to the decedent. You 
                                                                             cannot use the SSN assigned to the decedent's spouse. If 
IF . . .                          THEN . . .                                 the decedent did not have an SSN, the executor should 
                                                                             obtain one for the decedent by filing Form SS-5 with a local 
you enter zero on any item of the you need not file the schedule             Social Security Administration (SSA) office.
Recapitulation                    (except for Schedule F) referred to on 
                                  that item.                                 Line 6a. Name of Executor
you are estimating the value of   you must report the asset on the           If there is more than one executor, enter the name of the 
one or more assets pursuant to    appropriate schedule, but you are not      executor to be contacted by the IRS and see line 6d.
the special rule of Regulations   required to enter a value for the 
section 20.2010-2(a)(7)(ii)       asset. Include the estimated value of      Line 6b. Executor's Address
                                  the asset in the totals entered on Part 
                                  5—Recapitulation, items 10 and 23.         Use Form 8822 to report a change of the executor's address.

you claim an exclusion on item 12 complete and attach Schedule U.            Line 6c. Executor's Social Security Number
                                                                             Only one executor should complete this line. If there is more 
you claim any deductions on items  complete and attach the appropriate       than one executor, see line 6d.
14 through 22 of the Recapitulation schedules to support the claimed 
                                  deductions.                                Line 6d. Multiple Executors
you claim credits for foreign death  complete and attach Schedule P or       Check here if there is more than one executor. On an 
taxes or tax on prior transfers   Q.                                         attached statement, provide the name, address, telephone 
                                                                             number, and SSN of any executor other than the one named 
                                                                             on line 6a.

                                                                             Line 11. Special Rule
                                                                             If the estate is estimating the value of assets under the 
                                                                             special rule of Regulations section 20.2010-2(a)(7)(ii), check 
                                                                             here and see the instructions for Part 5—Recapitulation, 
                                                                             items 10 and 23.

Instructions for Form 706 (Rev. 09-2023)                                  -5-

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                                      Table A—Unified Rate Schedule

        Column A                      Column B                               Column C                   Column D
      Taxable amount over             Taxable amount not over         Tax on amount in column A Rate of tax on excess over amount 
                                                                                                        in column A
        $0                                 $10,000                           $0                              18%
        10,000                             20,000                            1,800                           20%
        20,000                             40,000                            3,800                           22%
        40,000                             60,000                            8,200                           24%
        60,000                             80,000                            13,000                          26%
        80,000                             100,000                           18,200                          28%
        100,000                            150,000                           23,800                          30%
        150,000                            250,000                           38,800                          32%
        250,000                            500,000                           70,800                          34%
        500,000                            750,000                           155,800                         37%
        750,000                       1,000,000                              248,300                         39%
        1,000,000                           – – – –                          345,800                         40%

                                                                      Send the following evidence to the IRS.
Part 2—Tax Computation                                                1. Certificate of the proper officer of the taxing state, or the 
In general, the estate tax is figured by applying the unified         District of Columbia, showing the following.
rates shown in Table A to the total of transfers both during life 
and at death, and then subtracting the gift taxes, as refigured       a. Total amount of tax imposed (before adding interest 
based on the date of death rates. See Worksheet TG, the                      and penalties and before allowing discount).
Line 4 Worksheet, and the Line 7 Worksheet.                           b. Amount of discount allowed.
Note. You must complete Part 2—Tax Computation.                       c. Amount of penalties and interest imposed or 
                                                                             charged.
Line 1
If you elected alternate valuation on Part 3—Elections by the         d. Total amount actually paid in cash.
Executor, line 1, enter the amount you entered in the                 e. Date of payment.
“Alternate value” column of Part 5—Recapitulation, item 13. 
Otherwise, enter the amount from the “Value at date of death”         2. Any additional proof the IRS specifically requests.
column.                                                                      File the evidence requested above with the return, if 
                                                                      possible. Otherwise, send it as soon as possible after 
Line 3b. State Death Tax Deduction                                    the return is filed.

You may take a deduction on line 3b for estate,                       Line 6
inheritance, legacy, or succession taxes paid on any property 
included in the gross estate as the result of the decedent's          To figure the tentative tax on the amount on line 5, use Table 
death to any state or the District of Columbia.                       A—Unified Rate Schedule and put the result on this line.

You may claim an anticipated amount of deduction and                  Lines 4 and 7
figure the federal estate tax on the return before the state          Three worksheets are provided to help you figure the entries 
death taxes have been paid. However, the deduction cannot             for these lines. Worksheet TG—Taxable Gifts Reconciliation 
be finally allowed unless you pay the state death taxes and           allows you to reconcile the decedent's lifetime taxable gifts to 
claim the deduction within 4 years after the return is filed, or      figure totals that will be used for the Line 4 Worksheet and 
later (see section 2058(b)) if:                                       the Line 7 Worksheet.
• A petition is filed with the Tax Court of the United States,
• You have an extension of time to pay, or                            You must have all of the decedent's gift tax returns (Forms 
• You file a claim for refund or credit of an overpayment             709) before completing Worksheet TG—Taxable Gifts 
  which extends the deadline for claiming the deduction.              Reconciliation. The amounts needed for Worksheet TG can 
                                                                      usually be found on the filed returns that were subject to tax. 
Note. The deduction is not subject to dollar limits.                  However, if any of the returns were audited by the IRS, use 
If you make a section 6166 election to pay the federal                the amounts that were finally determined as a result of the 
estate tax in installments and make a similar election to pay         audits.
the state death tax in installments, see section 2058(b) for 
exceptions and periods of limitation.                                 In addition, you must make a reasonable effort to discover 
                                                                      any gifts in excess of the annual exclusion made by the 
If you transfer property other than cash to the state in              decedent (or on behalf of the decedent under a power of 
payment of state inheritance taxes, the amount you may                attorney) for which no Forms 709 were filed. Include the value 
claim as a deduction is the lesser of the state inheritance tax       of such gifts in column b of Worksheet TG. The annual 
liability discharged or the fair market value (FMV) of the            exclusion per donee is as follows.
property on the date of the transfer. For more information on 
the application of such transfers, see the principles 
discussed in Rev. Rul. 86-117, 1986-2 C.B. 157, prior to the 
repeal of section 2011.

                                                                  -6-                 Instructions for Form 706 (Rev. 09-2023)

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          Period                  Annual Exclusion Amount Per                Taxable Gift Amount Table
                                                     Donee
        1977 through 1981                            $3,000                  Column A                                           Column B         Column C                    Column D
        1981 through 2001                            $10,000                 Amount in Row                                      Amount in Row Property Value                 Rate (Divisor) 
                                                                             (p), Line 7                                        (p), Line 7   on Amount in                   on Excess of 
        2002 through 2005                            $11,000                 Worksheet over...                                  Worksheet not    Column A                    Amount in 
        2006 through 2008                            $12,000                                                                      over...                                    Column A
        2009 through 2012                            $13,000                 0                                                    1,800                              0       18%
        2013 through 2017                            $14,000                 1,800                                                3,800                              10,000  20%
        2018 through 2021                            $15,000                 3,800                                                8,200                              20,000  22%
          2022                                       $16,000                 8,200                                                13,000                             40,000  24%
          2023                                       $17,000                 13,000                                               18,200                             60,000  26%
                                                                             18,200                                               23,800                             80,000  28%
                                                                             23,800                                               38,800                             100,000 30%
                                                                             38,800                                               70,800                             150,000 32%
                                                                             70,800                                             155,800                              250,000 34%
                                                                             155,800                                            248,300                              500,000 37%
                                                                             248,300                                            345,800                              750,000 39%
                                                                             345,800                                            – – – – – –      1,000,000                   40%

                                                                             How to complete the Line 7 Worksheet. 
                                                                             Row (a). Beginning with the earliest year in which the taxable 
                                                                             gifts were made, enter the tax period of prior gifts. If you filed 
                                                                             returns for gifts made after 1981, enter the calendar year in 
                                                                             Row (a) as (YYYY). If you filed returns for gifts made after 
                                                                             1976 and before 1982, enter the calendar quarters in Row (a) 
                                                                             as (YYYY-Q).

Worksheet TG—Taxable Gifts Reconciliation
Worksheet TG—Taxable Gifts Reconciliation
(To be used for lines 4 and 7 of the Tax Computation)
          a.                             b.            Note. For the definition of a taxable gift, see section 2503. Follow Form 709. That is, include only 
  Gifts Calendar year or       Total taxable gifts for the decedent’s one-half of split gifts, whether the gifts were made by the decedent or the 
made    calendar quarter       period (see Note)       decedent’s spouse. In addition to gifts reported on Form 709, you must include any taxable gifts 
  after                                                in excess of the annual exclusion that were not reported on Form 709.
June 6,                                                      c.                              d.                                               e.                             f.
1932,                                                  Taxable amount        Taxable amount included                              Gift tax paid by                           Gift tax paid by 
  and                                                  included in column b  in column b for gifts that                           decedent on gifts in                       decedent's spouse 
before                                                 for gifts included in qualify for “special                                           column d                         on gifts in column c
  1977  1. Total taxable gifts                            the gross estate   treatment of split gifts” 
          made before 1977                                                   described below
  Gifts 
made 
  after 
  1976
2. Totals for gifts made after 
  1976
Line 4 Worksheet—Adjusted Taxable Gifts Made After 1976
1. Taxable gifts made after 1976. Enter the amount from Worksheet TG, line 2, column b . . . . . . . . . . . . . . . . . . . . . . . . .                               1.
2. Taxable gifts made after 1976 reportable on Schedule G. Enter the amount from Worksheet 
   TG, line 2, column c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.
3. Taxable gifts made after 1976 that qualify for “special treatment.” Enter the amount from 
   Worksheet TG, line 2, column d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         3.
4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4.
5. Adjusted taxable gifts. Subtract line 4 from line 1. Enter here and on Part 2—Tax Computation, line 4                        . . . . . . . . . . . . . .            5.

Instructions for Form 706 (Rev. 09-2023)                                  -7-

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Line 7 Worksheet—Submit a copy with Form 706
Line 7 Worksheet, Part A—Used to determine Applicable Credit Allowable for Prior Periods after 1976
      (a) Tax Period1                                                                                                       Pre-1977
      (b) Taxable Gifts for Applicable Period
      (c) Taxable Gifts for Prior Periods2
      (d) Cumulative Taxable Gifts Including Applicable 
          Period (add Row (b) and Row (c))
      (e) Tax at Date of Death Rates for Prior Gifts (from 3
          Row (c))
      (f) Tax at Date of Death Rates for Cumulative 
          Taxable Gifts Including Applicable Period (from 
          Row (d))
      (g) Tax at Date of Death Rates for Gifts in 
          Applicable Period (subtract Row (e) from Row 
          (f))
      (h) Total DSUE applied and Restorable Exclusion 
          Amount from Prior Periods and Applicable 
          Period (see instructions later)
      (i) Basic Exclusion for Applicable Period (Enter the 
          amount from the Table of Basic Exclusion 
          Amounts)
      (j) Applicable Exclusion Amount (add Row (h) and 
          Row (i)) 
      (k) Maximum Applicable Credit amount based on 
          Row (j) (Using Table A—Unified Rate 4
          Schedule)
      (l) Applicable Credit amount used in Prior Periods 
          (add Row (l) and Row (n) from prior period)
      (m) Available Credit in Applicable Period (subtract 
          Row (l) from Row (k))
      (n) Credit Allowable (lesser of Row (g) or Row (m))
      (o) Tax paid or payable at Date of Death rates for 
          Applicable Period (subtract Row (n) from Row 
          (g))
      (p) Tax on Cumulative Gifts less tax paid or payable 
          for Applicable Period (subtract Row (o) from 
          Row (f))
      (q) Cumulative Taxable Gifts less Gifts in the 
          Applicable Period on which tax was paid or 
          payable based on Row (p) (Using the Taxable 
          Gift Amount Table)
      (r) Gifts in the Applicable Period on which tax was 
          payable (subtract Row (q) from Row (d))
Line 7 Worksheet, Part B
      1   Total gift taxes payable on gifts after 1976 (sum of amounts in Row (o)).
      2   Gift taxes paid by the decedent on gifts that qualify for “special treatment.” Enter the amount from Worksheet TG, line 2, col. e.
      3   Subtract line 2 from line 1.
      4   Gift tax paid by decedent's spouse on split gifts included on Schedule G. Enter amount from Worksheet TG, line 2, col. f.
      5   Add lines 3 and 4. Enter here and on Part 2—Tax Computation, line 7.
      6   Cumulative lifetime gifts on which tax was paid or payable. Enter this amount on Form 706, Part 6–Portability of Deceased 
          Spousal Unused Exclusion (DSUE), Section C, line 3 (sum of amounts in Row (r)).

23 4 1 Row (c): Enter amount from Row (d) of the previous column.  Row (a): For annual returns, enter the tax period as (YYYY). For quarterly returns, enter tax period as (YYYY-Q).Row (e): Enter amount from Row (f) of the previous column.Row (k): Figure the applicable credit on the amount in Row (j), using Table A—Unified Rate Schedule, and enter here. (For each column in Row (k), subtract 20% of any 
amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977.)

Row (b). Enter all taxable gifts made in the specified year.                                                                            Row (h). Complete this row only if a DSUE amount was 
Enter all pre-1977 gifts in the pre-1977 column.                                                                                        received from predeceased spouse(s) and was applied to 
Row (c). Enter the amount from Row (d) of the previous                                                                                  lifetime gifts or if a Restored Exclusion Amount on taxable 
column.                                                                                                                                 gifts to a same-sex spouse was applied to lifetime gifts (or 
Row (d). Enter the sum of Row (b) and Row (c) from the                                                                                  both). Enter the sum of lines 2 and 3 from Schedule C on the 
current column.                                                                                                                         Form 709 filed for the year listed in Row (a) for the amount to 
Row (e). Enter the amount from Row (f) of the previous                                                                                  be entered in this row.
column.                                                                                                                                 Row (i). Enter the applicable amount from the Table of Basic 
Row (f). Enter the tax based on the amount in Row (d) of the                                                                            Exclusion Amounts.
current column using Table A—Unified Rate Schedule.                                                                                     Row (j). Enter the sum of Row (h) and Row (i).
Row (g). Subtract the amount in Row (e) from the amount in                                                                              Row (k). Figure the applicable credit on the amount in Row 
Row (f) for the current column.                                                                                                         (j) using Table A—Unified Rate Schedule, and enter here.

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Note. The entries in each column of Row (k) must be               Table of Basic Exclusion Amounts
reduced by 20% of the amount allowed as a specific 
exemption for gifts made after September 8, 1976, and                     Period          Basic Exclusion Credit Equivalent 
before January 1, 1977 (but no more than $6,000).                                         Amount          at 2023 Rates
Row (l). Add the amounts in Row (l) and Row (n) from the          1977 (Quarters 1 and 2) $30,000               $6,000
previous column.
                                                                  1977 (Quarters 3 and 4) $120,667              $30,000
Row (m). Subtract the amount in Row (l) from the amount in 
Row (k) to determine the amount of any available credit.          1978                    $134,000              $34,000
Enter the result in Row (m).                                      1979                    $147,333              $38,000
Row (n). Enter the lesser of the amounts in Row (g) or Row 
(m).                                                              1980                    $161,563              $42,500
Row (o). Subtract the amount in Row (n) from the amount in        1981                    $175,625              $47,000
Row (g) for the current column.                                   1982                    $225,000              $62,800
Row (p). Subtract the amount in Row (o) from the amount in 
Row (f) for the current column.                                   1983                    $275,000              $79,300
Row (q). Enter the Cumulative Taxable Gift amount based on        1984                    $325,000              $96,300
the amount in Row (p) using the Taxable Gift Amount Table.        1985                    $400,000              $121,800
Row (r). If Row (o) is greater than zero in the applicable 
period, subtract Row (q) from Row (d). If Row (o) is not          1986                    $500,000              $155,800
greater than zero, enter -0-.                                     1987 through 1997       $600,000              $192,800
Repeat for each year in which taxable gifts were made.            1998                    $625,000              $202,050
        Remember to submit a copy of the Line 7 Worksheet         1999                    $650,000              $211,300
!       when you file Form 706. If additional space is needed     2000 and 2001           $675,000              $220,550
CAUTION to report prior gifts, please attach additional sheets.
                                                                  2002 through 2010       $1,000,000            $345,800
                                                                  2011                    $5,000,000            $1,945,800
                                                                  2012                    $5,120,000            $1,993,800
                                                                  2013                    $5,250,000            $2,045,800
                                                                  2014                    $5,340,000            $2,081,800
                                                                  2015                    $5,430,000            $2,117,800
                                                                  2016                    $5,450,000            $2,125,800
                                                                  2017                    $5,490,000            $2,141,800
                                                                  2018                    $11,180,000           $4,417,800
                                                                  2019                    $11,400,000           $4,505,800
                                                                  2020                    $11,580,000           $4,577,800
                                                                  2021                    $11,700,000           $4,625,800
                                                                  2022                    $12,060,000           $4,769,800
                                                                  2023                    $12,920,000           $5,113,800

                                                                  Note.   In figuring the line 7 amount, do not include any tax 
                                                                  paid or payable on gifts made before 1977. The line 7 amount 
                                                                  is a hypothetical figure used to figure the estate tax.
                                                                  Special treatment of split gifts. These special rules apply 
                                                                  only if:
                                                                  • The decedent's spouse predeceased the decedent;
                                                                  • The decedent's spouse made gifts that were “split” with 
                                                                    the decedent under the rules of section 2513;
                                                                  • The decedent was the “consenting spouse” for those split 
                                                                    gifts, as that term is used on Form 709; and
                                                                  • The split gifts were included in the decedent's spouse's 
                                                                    gross estate under section 2035.
                                                                  If all four conditions above are met, do not include these 
                                                                  gifts on line 4 of the Tax Computation and do not include the 
                                                                  gift taxes payable on these gifts on line 7 of the Tax 
                                                                  Computation. These adjustments are incorporated into the 
                                                                  worksheets.

Instructions for Form 706 (Rev. 09-2023)                       -9-

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Lines 9a Through 9e. Applicable Credit Amount                          However, you may also use line 15 to report credit taken 
(Formerly Unified Credit Amount)                                  for federal gift taxes imposed by chapter 12 of the Code, and 
                                                                  the corresponding provisions of prior laws, on certain 
The applicable credit amount is allowable credit against          transfers the decedent made before January 1, 1977, that are 
estate and gift taxes. It is figured by determining the tentative included in the gross estate. The credit cannot be more than 
tax on the applicable exclusion amount, which is the amount       the amount figured by the following formula.
that can be transferred before an estate tax liability will be 
incurred.                                                              Gross estate tax minus (the sum of the state          
                                                                       death taxes and unified credit)                   Value of 
The applicable exclusion amount equals the total of lines              Value of gross estate minus (the sum of the    x  included
9a, 9b, and 9c. See Lines 9d and 9e, applicable exclusion              deductions for charitable, public, and similar     gift
and credit amount, later, for more information.                        gifts and bequests and marital deduction)
Line 9a, basic exclusion amount. In 2023, the basic 
exclusion amount, as adjusted for inflation under section 
2010(c)(3), is $12,920,000.                                            When taking the credit for pre-1977 federal gift taxes:
Line 9b, DSUE. If the decedent had a spouse who died after             • Include the credit in the amount on line 15; and
2010, whose estate did not use all of its applicable exclusion         • Identify and enter the amount of the credit you are taking 
against gift or estate tax liability, a DSUE amount may be               on the dotted line to the left of the entry space for line 15 
available for use by the decedent's estate. If the predeceased           on page 1 of Form 706 with a notation, “Section 2012 
spouse died in 2011, the DSUE amount was figured and                     credit.”
attached to the predeceased spouse’s Form 706. If the                  For more information, see the regulations under section 
predeceased spouse died in 2012 or after, this amount is          2012. This computation may be made using Form 4808. 
found in Part 6, Section C, of the Form 706 filed by the estate   Attach a copy of a completed Form 4808 or the computation 
of the decedent's predeceased spouse. The amount to be            of the credit. Also, attach all available copies of Forms 709 
entered on line 9b is figured in Part 6, Section D.               filed by the decedent, with "Exhibit to Estate Tax Return" 
Line 9c, restored exclusion amount.    If a decedent made a       entered across the top of the first page of each, to help verify 
taxable gift during the decedent's lifetime to the decedent's     the amounts entered on lines 4 and 7, and the amount of 
same-sex spouse and that transfer resulted in a reduction of      credit taken (on line 15) for pre-1977 federal gift taxes.
the decedent's available applicable exclusion amount, the         Canadian marital credit.             In addition to using line 15 to 
amount of the applicable exclusion that was reduced can be        report credit for federal gift taxes on pre-1977 gifts, you may 
restored. If the applicable exclusion was previously restored     also use line 15 to claim the Canadian marital credit, where 
on a Form 709, enter the value on Schedule C, line 3, of Form     applicable.
709. If the applicable exclusion has not yet been previously 
                                                                       When taking the marital credit under the 1995 Canadian 
restored, follow the directions in the instructions for Form 
                                                                  Protocol:
709, Schedule C, to determine the Restored Exclusion 
Amount. The Restored Exclusion Amount is entered on                    • Include the credit in the amount on line 15; and
line 9c.                                                               • Identify and enter the amount of the credit you are taking 
                                                                         on the dotted line to the left of the entry space for line 15 
Lines 9d and 9e, applicable exclusion and credit                         on page 1 of Form 706 with a notation, “Canadian marital 
amount.   The total of lines 9a, 9b, and 9c is entered on                credit.”
line 9d. If the amounts entered on both lines 9b and 9c are            Also, attach a statement to the return that refers to the 
zero, enter $5,113,800 on line 9e. Otherwise, determine the       treaty, waives qualifying domestic trust (QDOT) rights, and 
applicable credit on the amount on line 9d by using Table         shows the computation of the marital credit. See the 1995 
A—Unified Rate Schedule and enter the result on line 9e.          Canadian income tax treaty protocol for details on figuring the 
                                                                  credit.
Line 10. Adjustment to Applicable Credit
If the decedent made gifts (including gifts made by the 
decedent's spouse and treated as made by the decedent by          Part 3—Elections by the Executor
reason of gift splitting) after September 8, 1976, and before 
January 1, 1977, for which the decedent claimed a specific        Note.    The election to allow the decedent's surviving spouse 
exemption, the applicable credit amount on this estate tax        to use the decedent's unused exclusion amount is made by 
return must be reduced. The reduction is figured by entering      filing a timely and complete Form 706. See the instructions 
20% of the specific exemption claimed for these gifts.            for Part 6—Portability of Deceased Spousal Unused 
                                                                  Exclusion, later, and sections 2010(c)(4) and (c)(5).
Note. The specific exemption was allowed by section 2521 
for gifts made before January 1, 1977.                            Line 1. Alternate Valuation
If the decedent did not make any gifts between September                   See the example showing the use of Schedule B 
8, 1976, and January 1, 1977, or if the decedent made gifts            TIP where the alternate valuation is adopted, later.
during that period but did not claim the specific exemption, 
enter zero.                                                            Unless you elect at the time the return is filed to adopt 
                                                                  alternate valuation, as authorized by section 2032, value all 
Line 15. Total Credits                                            property included in the gross estate as of the date of the 
Generally, line 15 is used to report the total of credit for      decedent's death. Alternate valuation cannot be applied to 
foreign death taxes (line 13) and credit for tax on prior         only a part of the property.
transfers (line 14).                                                   You may elect special-use valuation (line 2) in addition to 
                                                                  alternate valuation.

                                                                  -10-                Instructions for Form 706 (Rev. 09-2023)

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You may not elect alternate valuation unless the election            stockholders of record after the date of the decedent's death 
will decrease both the value of the gross estate and the sum         so that the shares of stock at the later valuation date do not 
(reduced by allowable credits) of the estate and GST taxes           reasonably represent the same property at the date of the 
payable by reason of the decedent's death for the property           decedent's death, include those dividends (except dividends 
includible in the decedent's gross estate.                           paid from earnings of the corporation after the date of the 
                                                                     decedent's death) in the alternate valuation.
Elect alternate valuation by checking “Yes” on line 1 and 
filing Form 706. You may make a protective alternate                 On Schedules A through I, you must show the following.
valuation election by checking “Yes” on line 1, writing the          1. What property is included in the gross estate on the date 
word “protective,” and filing Form 706 using regular values.         of the decedent's death.
Once made, the election may not be revoked. The election             2. What property was distributed, sold, exchanged, or 
may be made on a late-filed Form 706, provided it is not filed       otherwise disposed of within the 6-month period after the 
later than 1 year after the due date (including extensions           decedent's death, and the dates of these distributions, 
actually granted). Relief under Regulations sections                 etc. (These two items should be entered in the 
301.9100-1 and 301.9100-3 may be available to make an                “Description” column of each schedule. Briefly explain 
alternate valuation election or a protective alternate valuation     the status or disposition governing the alternate 
election, provided a Form 706 is filed no later than 1 year          valuation date, such as “Not disposed of within 6 months 
after the due date of the return (including extensions actually      following death,” “Distributed,” “Sold,” “Bond paid on 
granted).                                                            maturity,” etc. In this same column, describe each item of 
                                                                     principal and includible income.)
If alternate valuation is elected, value the property 
included in the gross estate as of the following dates, as           3. The date of death value, entered in the appropriate value 
applicable.                                                          column with items of principal and includible income 
• Any property distributed, sold, exchanged, or otherwise            shown separately.
  disposed of or separated or passed from the gross estate 
                                                                     4. The alternate value, entered in the appropriate value 
  by any method within 6 months after the decedent's 
                                                                     column with items of principal and includible income 
  death is valued on the date of distribution, sale, 
                                                                     shown separately. (In the case of any interest or estate, 
  exchange, or other disposition. Value this property on the 
                                                                     the value of which is affected by lapse of time, such as 
  date it ceases to be a part of the gross estate; for 
                                                                     patents, leaseholds, estates for the life of another, or 
  example, on the date the title passes as the result of its 
                                                                     remainder interests, the value shown under the heading 
  sale, exchange, or other disposition.
                                                                     “Alternate value” must be the adjusted value, for 
• Any property not distributed, sold, exchanged, or 
                                                                     example, the value as of the date of death with an 
  otherwise disposed of within the 6-month period is 
                                                                     adjustment reflecting any difference in its value as of the 
  valued as of 6 months after the date of the decedent's 
                                                                     later date not due to lapse of time.)
  death.
• Any property, interest, or estate that is affected by mere         Note. If any property on Schedules A through I is being 
  lapse of time is valued as of the date of the decedent's           valued pursuant to the special rule of Regulations section 
  death or on the date of its distribution, sale, exchange, or       20.2010-2(a)(7)(ii), values for those assets are not required 
  other disposition, whichever occurs first. However, you            to be reported on the schedule. See Part 5—Recapitulation, 
  may change the date of death value to account for any              item 10, later.
  change in value that is not due to a “mere lapse of time” 
  on the date of its distribution, sale, exchange, or other          Distributions, sales, exchanges, and other dispositions of 
  disposition.                                                       the property within the 6-month period after the decedent's 
                                                                     death must be supported by evidence. If the court issued an 
The property included in the alternate valuation and                 order of distribution during that period, you must submit a 
valued as of 6 months after the date of the decedent's death,        certified copy of the order as part of the evidence. The IRS 
or as of some intermediate date (as described above), is the         may require you to submit additional evidence, if necessary.
property included in the gross estate on the date of the             If the alternate valuation method is used, the values of life 
decedent's death. Therefore, you must first determine what           estates, remainders, and similar interests are figured using 
property was part of the gross estate at the decedent's death.       the age of the recipient on the date of the decedent's death 
Interest. Interest accrued to the date of the decedent's             and the value of the property on the alternate valuation date.
death on bonds, notes, and other interest-bearing obligations 
is property of the gross estate on the date of death and is          Line 2. Special-Use Valuation of Section 2032A
included in the alternate valuation.                                 In general. Under section 2032A, you may elect to value 
Rent. Rent accrued to the date of the decedent's death on            certain farm and closely held business real property at its 
leased real or personal property is property of the gross            farm or business use value rather than its FMV. Both 
estate on the date of death and is included in the alternate         special-use valuation and alternate valuation may be elected.
valuation.                                                           To elect special-use valuation, check “Yes” on line 2 and 
Dividends.  Outstanding dividends that were declared to              complete and attach Schedule A-1 and its required additional 
stockholders of record on or before the date of the                  statements. You must file Schedule A-1 and its required 
decedent's death are considered property of the gross estate         attachments with Form 706 for this election to be valid. You 
on the date of death and are included in the alternate               may make the election on a late-filed return so long as it’s the 
valuation. Ordinary dividends declared to stockholders of            first return filed.
record after the date of the decedent's death are not included       The total value of the property valued under section 2032A 
in the gross estate on the date of death and are not eligible        may not be decreased from FMV by more than $1,310,000 
for alternate valuation. However, if dividends are declared to       for decedents dying in 2023.

Instructions for Form 706 (Rev. 09-2023)                         -11-

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Real property may qualify for the section 2032A election if:         Directly owned property leased by the decedent to a 
                                                                separate closely held business is considered qualified real 
1. The decedent was a U.S. citizen or resident at the time of 
                                                                property if the business entity to which it was rented was a 
death;
                                                                closely held business (as defined by section 6166) for the 
2. The real property is located in the United States;           decedent on the date of the decedent's death and for 
                                                                sufficient time to meet the “5 in 8 years” test explained above.
3. At the decedent's death, the real property was used by 
the decedent or a family member for farming or in a trade       Structures and other real property improvements. 
or business, or was rented for such use by either the           Qualified real property includes residential buildings and 
surviving spouse or a lineal descendant of the decedent         other structures and real property improvements regularly 
to a family member on a net cash basis;                         occupied or used by the owner or lessee of real property (or 
                                                                by the employees of the owner or lessee) to operate a farm or 
4. The real property was acquired from or passed from the       other closely held business. A farm residence that the 
decedent to a qualified heir of the decedent;                   decedent occupied is considered to have been occupied for 
5. The real property was owned and used in a qualified          the purpose of operating the farm even when a family 
manner by the decedent or a member of the decedent's            member and not the decedent was the person materially 
family during 5 of the 8 years before the decedent's            participating in the operation of the farm.
death;                                                               Qualified real property also includes roads, buildings, and 
6. There was material participation by the decedent or a        other structures and improvements functionally related to the 
member of the decedent's family during 5 of the 8 years         qualified use.
before the decedent's death; and                                     Elements of value such as mineral rights that are not 
                                                                related to the farm or business use are not eligible for 
7. The property meets the following percentage                  special-use valuation.
requirements.
                                                                Property acquired from the decedent.       Property is 
a. At least 50% of the adjusted value of the gross estate       considered to have been acquired from or to have passed 
must consist of the adjusted value of real or personal          from the decedent if one of the following applies.
property that was being used as a farm or in a closely               • The property is considered to have been acquired from 
held business and that was acquired from, or passed                    or to have passed from the decedent under section 
from, the decedent to a qualified heir of the                          1014(b) (relating to basis of property acquired from a 
decedent.                                                              decedent).
b. At least 25% of the adjusted value of the gross estate            • The property is acquired by any person from the estate.
must consist of the adjusted value of qualified farm or              • The property is acquired by any person from a trust, to 
closely held business real property.                                   the extent the property is includible in the gross estate.
For this purpose, adjusted value is the value of property       Qualified heir.  A person is a qualified heir of property if the 
determined without regard to its special-use value. The value   person is a member of the decedent's family and acquired or 
is reduced for unpaid mortgages on the property or any          received the property from the decedent. If a qualified heir 
indebtedness against the property, if the full value of the     disposes of any interest in qualified real property to any 
decedent's interest in the property (not reduced by such        member of the qualified heir’s family, that person will then be 
mortgage or indebtedness) is included in the value of the       treated as the qualified heir for that interest.
gross estate. The adjusted value of the qualified real and           A member of the family includes only:
personal property used in different businesses may be                • An ancestor (parent, grandparent, etc.) of the individual;
combined to meet the 50% and 25% requirements.                       • The spouse of the individual;
                                                                     • The lineal descendant (child, stepchild, grandchild, etc.) 
Qualified Real Property                                                of the individual, the individual's spouse, or a parent of 
                                                                       the individual; or
Qualified use. Qualified use means use of the property as a          • The spouse or surviving spouse of any lineal descendant 
farm for farming purposes or in a trade or business other than         described above.
farming. Trade or business applies only to the active conduct 
of a business. It does not apply to passive investment          Note.  A legally adopted child of an individual is treated as a 
activities or the mere passive rental of property to a person   child of that individual by blood.
other than a member of the decedent's family. Also, no trade 
or business is present in the case of activities not engaged in Material Participation
for profit.
Ownership. To qualify as special-use property, the decedent     To elect special-use valuation, either the decedent or a 
or a member of the decedent's family must have owned and        member of the decedent’s family must have materially 
used the property in a qualified use for 5 of the last 8 years  participated in the operation of the farm or other business for 
before the decedent's death. Ownership may be direct or         at least 5 of the 8 years ending on the date of the decedent's 
indirect through a corporation, a partnership, or a trust.      death. The existence of material participation is a factual 
                                                                determination. Passively collecting rents, salaries, draws, 
If the ownership is indirect, the business must qualify as a    dividends, or other income from the farm or other business is 
closely held business under section 6166. The indirect          not sufficient for material participation, nor is merely 
ownership, when combined with periods of direct ownership,      advancing capital and reviewing a crop plan and financial 
must meet the requirements of section 6166 on the date of       reports each season or business year.
the decedent's death and for a period of time that equals at 
least 5 of the 8 years preceding death.

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In determining whether the required participation has                  locality as the property being specially valued. You may not 
occurred, disregard brief periods (that is, 30 days or less)           use:
during which there was no material participation, as long as           • Appraisals or other statements regarding rental value or 
such periods were both preceded and followed by substantial              areawide averages of rentals,
periods (more than 120 days) during which there was                    • Rents paid wholly or partly in-kind, or
uninterrupted material participation.                                  • Property for which the amount of rent is based on 
                                                                         production.
Retirement or disability. If, on the date of death, the time 
period for material participation could not be met because the         The rental must have resulted from an arm's-length 
decedent was retired or disabled, a substitute period may              transaction and the amount of rent may not be reduced by 
apply. The decedent must have retired on social security or            the amount of any expenses or liabilities associated with the 
been disabled for a continuous period ending with death. A             farm operation or the lease.
person is disabled for this purpose if the person was mentally         Comparable property.     Comparable property must be 
or physically unable to materially participate in the operation        situated in the same locality as the qualified real property as 
of the farm or other business.                                         determined by generally accepted real property valuation 
The substitute time period for material participation for              rules. The determination of comparability is based on a 
these decedents is a period totaling at least 5 years out of the       number of factors, none of which carries more weight than 
8-year period that ended on the earlier of:                            the others. It is often necessary to value land in segments 
• The date the decedent began receiving social security                where there are different uses or land characteristics 
  benefits, or                                                         included in the specially valued land.
• The date the decedent became disabled.                               The following list contains some of the factors considered 
                                                                       in determining comparability.
Surviving spouse. A surviving spouse who received                      • Similarity of soil.
qualified real property from the predeceased spouse is                 • Whether the crops grown would deplete the soil in a 
considered to have materially participated if the surviving              similar manner.
spouse was engaged in the active management of the farm                • Types of soil conservation techniques that have been 
or other business. If the surviving spouse died within 8 years           practiced on the two properties.
of the first spouse's death, you may add the period of                 • Whether the two properties are subject to flooding.
material participation of the predeceased spouse to the                • Slope of the land.
period of active management by the surviving spouse to                 • For livestock operations, the carrying capacity of the 
determine if the surviving spouse's estate qualifies for                 land.
special-use valuation. To qualify for this, the property must          • For timbered land, whether the timber is comparable.
have been eligible for special-use valuation in the                    • Whether the property as a whole is unified or segmented. 
predeceased spouse's estate, though it does not have to                  If segmented, the availability of the means necessary for 
have been elected by that estate.                                        movement among the different sections.
For additional details regarding material participation, see           • Number, types, and conditions of all buildings and other 
Regulations section 20.2032A-3(e).                                       fixed improvements located on the properties and their 
                                                                         location as it affects efficient management, use, and 
Valuation Methods                                                        value of the property.
                                                                       • Availability and type of transportation facilities in terms of 
The primary method of valuing special-use property that is               costs and of proximity of the properties to local markets.
used for farming purposes is the annual gross cash rental              You must specifically identify on the return the property 
method. If comparable gross cash rentals are not available,            being used as comparable property. Use the type of 
you can substitute comparable average annual net share                 descriptions used to list real property on Schedule A.
rentals. If neither of these is available, or if you so elect, you     Effective interest rate. See Tables 1 and 2 of Rev. Rul. 
can use the method for valuing real property in a closely held         2023-15, 2023-34 I.R.B. 559, available at Rev. Rul. 2023-15, 
business.                                                              for the average annual effective interest rates in effect for 
Average annual gross cash rental.     Generally, the                   2023.
special-use value of property that is used for farming                 Net share rental.    You may use average annual net share 
purposes is determined as follows.                                     rental from comparable land only if there is no comparable 
                                                                       land from which average annual gross cash rental can be 
1. Subtract the average annual state and local real estate             determined. Net share rental is the difference between the 
  taxes on actual tracts of comparable real property from              gross value of produce received by the lessor from the 
  the average annual gross cash rental for that same                   comparable land and the cash operating expenses (other 
  comparable property.                                                 than real estate taxes) of growing the produce that, under the 
2. Divide the result in (1) by the average annual effective            lease, are paid by the lessor. The production of the produce 
  interest rate charged for all new federal land bank loans.           must be the business purpose of the farming operation. For 
  See Effective interest rate, later.                                  this purpose, produce includes livestock.
The computation of each average annual amount is based                 The gross value of the produce is generally the gross 
on the 5 most recent calendar years ending before the date             amount received if the produce was disposed of in an 
of the decedent's death.                                               arm's-length transaction within the period established by the 
Gross cash rental. Generally, gross cash rental is the                 Department of Agriculture for its price support program. 
total amount of cash received in a calendar year for the use           Otherwise, the value is the weighted average price for which 
of actual tracts of comparable farm real property in the same          the produce sold on the closest national or regional 
                                                                       commodities market. The value is figured for the date or 

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dates on which the lessor received (or constructively             Protective Election
received) the produce.
Valuing a real property interest in a closely held busi-          You may make a protective election to specially value 
ness. Use this method to determine the special-use                qualified real property. Under this election, whether or not you 
valuation for qualifying real property used in a trade or         may ultimately use special-use valuation depends upon final 
business other than farming. You may also use this method         values (as shown on the return determined following 
for qualifying farm property if there is no comparable land or if examination of the return) meeting the requirements of 
you elect to use it. Under this method, the following factors     section 2032A.
are considered.
                                                                       To make a protective election, check “Yes” on line 2 and 
• The capitalization of income that the property can be 
                                                                  complete Schedule A-1 according to the instructions for 
  expected to yield for farming or for closely held business 
                                                                  Protective election, later.
  purposes over a reasonable period of time with prudent 
  management and traditional cropping patterns for the                 If you make a protective election, complete the initial Form 
  area, taking into account soil capacity, terrain                706 by valuing all property at its FMV. Do not use special-use 
  configuration, and similar factors.                             valuation. Usually, this will result in higher estate and GST tax 
• The capitalization of the fair rental value of the land for     liabilities than will be ultimately determined if special-use 
  farming or for closely held business purposes.                  valuation is allowed. The protective election does not extend 
• The assessed land values in a state that provides a             the time to pay the taxes shown on the return. If you wish to 
  differential or use value assessment law for farmland or        extend the time to pay the taxes, file Form 4768 in adequate 
  closely held business.                                          time before the due date of the return. See the Instructions for 
• Comparable sales of other farm or closely held business         Form 4768.
  land in the same geographical area far enough removed 
  from a metropolitan or resort area so that nonagricultural           If the estate qualifies for special-use valuation based on 
  use is not a significant factor in the sales price.             the values as finally determined, you must file an amended 
• Any other factor that fairly values the farm or closely held    Form 706 (with a complete section 2032A election) within 60 
  business value of the property.                                 days after the date of this determination. Prepare the 
                                                                  amended return using special-use values under the rules of 
Making the Election                                               section 2032A, complete Schedule A-1, and attach all of the 
                                                                  required statements.
Include the words “Section 2032A valuation” in the 
“Description” column of any Form 706 schedule if section          Additional Information
2032A property is included in the decedent's gross estate.
                                                                  For definitions and additional information, see section 2032A 
An election under section 2032A need not include all the          and the related regulations.
property in an estate that is eligible for special-use valuation, 
but sufficient property to satisfy the threshold requirements of  Line 3. Section 6166 Installment Payments
section 2032A(b)(1)(B) must be specially valued under the         If the gross estate includes an interest in a closely held 
election.                                                         business, you may be able to elect to pay part of the estate 
                                                                  tax in installments under section 6166.
If joint or undivided interests (that is, interests as joint           The maximum amount that can be paid in installments is 
tenants or tenants in common) in the same property are            that part of the estate tax that is attributable to the closely 
received from a decedent by qualified heirs, an election for      held business; see Determine how much of the estate tax 
one heir's joint or undivided interest need not include any       may be paid in installments under section 6166, later. In 
other heir's interest in the same property if the electing heir's general, that amount is the amount of tax that bears the same 
interest plus other property to be specially valued satisfies     ratio to the total estate tax that the value of the closely held 
the requirements of section 2032A(b)(1)(B).                       business included in the gross estate bears to the adjusted 
                                                                  gross estate.
If successive interests (that is, life estates and remainder 
interests) are created by a decedent in otherwise qualified       Bond or lien. The IRS may require that an estate furnish a 
property, an election under section 2032A is available only for   surety bond when granting the installment payment election. 
that property (or part) in which qualified heirs of the decedent  In the alternative, the executor may consent to elect the 
receive all of the successive interests, and such an election     special lien provisions of section 6324A in lieu of the bond. 
must include the interests of all of those heirs.                 The IRS will contact you regarding the specifics of furnishing 
                                                                  the bond or electing the special lien. The IRS will make this 
For example, if a surviving spouse receives a life estate in      determination on a case-by-case basis, and you may be 
otherwise qualified property and the spouse's sibling             asked to provide additional information.
receives a remainder interest in fee, no part of the property          If you elect the lien provisions, section 6324A requires that 
may be valued under a section 2032A election.                     the lien be placed on property having a value equal to the 
                                                                  total deferred tax plus 4 years of interest. The property must 
Where successive interests in specially valued property           be expected to survive the deferral period, and does not 
are created, remainder interests are treated as being             necessarily have to be property of the estate. In addition, all 
received by qualified heirs only if the remainder interests are   people with an interest in the designated property must 
not contingent on surviving a nonfamily member or are not         consent to the creation of this lien.
subject to divestment in favor of a nonfamily member.             Percentage requirements.    To qualify for installment 
                                                                  payments, the value of the interest in the closely held 

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business that is included in the gross estate must be more         corporation is included in the gross estate of the 
than 35% of the adjusted gross estate (the gross estate less       decedent or the corporation had no more than 45 
expenses, indebtedness, taxes, and losses—Schedules J, K,          shareholders.
and L of Form 706 (do not include any portion of the state         The partnership or corporation must be carrying on a trade 
death tax deduction)).                                             or business at the time of the decedent's death. For further 
Interests in two or more closely held businesses are               information on whether certain partnerships or corporations 
treated as an interest in a single business if at least 20% of     owning real property interests constitute a closely held 
the total value of each business is included in the gross          business, see Rev. Rul. 2006-34, 2006-26 I.R.B. 1171, 
estate. For this purpose, include any interest held by the         available at Rev. Rul. 2006-34.
surviving spouse that represents the surviving spouse's            In determining the number of partners or shareholders, a 
interest in a business held jointly with the decedent as           partnership or stock interest is treated as owned by one 
community property or as joint tenants, tenants by the             partner or shareholder if it is community property or held by 
entirety, or tenants in common.                                    spouses as joint tenants, tenants in common, or tenants by 
Value.  The value used for meeting the percentage                  the entirety.
requirements is the same value used for determining the 
gross estate. Therefore, if the estate is valued under alternate   Property owned directly or indirectly by or for a 
valuation or special-use valuation, you must use those values      corporation, partnership, estate, or trust is treated as owned 
to meet the percentage requirements.                               proportionately by or for its shareholders, partners, or 
                                                                   beneficiaries. For trusts, only beneficiaries with present 
Transfers before death. Generally, gifts made before               interests are considered.
death are not included in the gross estate. However, the 
estate must meet the 35% requirement by both including in          The interest in a closely held farm business includes the 
and excluding from the gross estate any gifts made by the          interest in the residential buildings and related improvements 
decedent in the 3-year period ending on the date of death.         occupied regularly by the owners, lessees, and employees 
Passive assets.   In determining the value of a closely held       operating the farm.
business and whether the 35% requirement is met, do not            Holding company stock.        The executor may elect to treat 
include the value of any passive assets held by the business.      as business company stock the portion of any holding 
A passive asset is any asset not used in carrying on a trade       company stock that represents direct ownership (or indirect 
or business. Any asset used in a qualifying lending and            ownership through one or more other holding companies) in 
financing business is treated as an asset used in carrying on      a business company. A holding company is a corporation 
a trade or business; see section 6166(b)(10) for details.          holding stock in another corporation. A business company is 
Stock in another corporation is a passive asset unless the         a corporation carrying on a trade or business.
stock is treated as held by the decedent because of the            In general, this election applies only to stock that is not 
election to treat holding company stock as business                readily tradable. However, the election can be made if the 
company stock; see Holding company stock, later.                   business company stock is readily tradable, as long as all of 
If a corporation owns at least 20% in value of the voting          the stock of each holding company is not readily tradable.
stock of another corporation, or the other corporation had no      For purposes of the 20%-voting-stock requirement, stock 
more than 45 shareholders and at least 80% of the value of         is treated as voting stock to the extent the holding company 
the assets of each corporation is attributable to assets used      owns voting stock in the business company.
in carrying on a trade or business, then these corporations        If the executor makes this election, the first installment 
will be treated as a single corporation and the stock will not     payment is due when the estate tax return is filed. The 5-year 
be treated as a passive asset. Stock held in the other             deferral for payment of the tax, as discussed later under Time 
corporation is not taken into account in determining the 80%       for payment, does not apply. In addition, the 2% interest rate, 
requirement.                                                       discussed later under Interest computation, will not apply. 
Interest in a closely held business. For purposes of the           Also, if the business company stock is readily tradable, as 
installment payment election, an interest in a closely held        explained above, the tax must be paid in five installments.
business means:                                                    Determine how much of the estate tax may be paid in in-
• Ownership of a trade or business carried on as a                 stallments under section 6166. To determine whether the 
  proprietorship;                                                  election may be made, you must figure the adjusted gross 
• An interest as a partner in a partnership carrying on a          estate. (See the Line 3 Worksheet—Adjusted Gross Estate 
  trade or business, if 20% or more of the total capital           below.) To determine the value of the adjusted gross estate, 
  interest was included in the gross estate of the decedent        subtract the deductions (Schedules J, K, and L) from the 
  or the partnership had no more than 45 partners; or              value of the gross estate.
• Stock in a corporation carrying on a trade or business, if 
  20% or more in value of the voting stock of the 

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Line 3 Worksheet—Adjusted Gross Estate
1. Enter the value of the decedent's interest in closely held business(es) included in the gross estate (less value of 
   passive assets, as mentioned in section 6166(b)(9))        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   
2. Enter the value of the gross estate (Form 706, Part 5, item 13)      . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   
3. Add items 18, 19, and 20 from Form 706, Part 5       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                   
4. Subtract line 3 from line 2 to figure the adjusted gross estate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                       
5. Divide line 1 by line 4 to figure the value the business interest bears to the value of the adjusted gross estate. For 
   purposes of this calculation, carry the decimal to the sixth place; the IRS will make this adjustment for purposes 
   of determining the correct amount. If this amount is less than 0.350000, the estate does not qualify to make the 
   election under section 6166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                    
6. Multiply line 5 by the amount on line 16 of Form 706, Part 2. This is the maximum amount of estate tax that may 
   be paid in installments under section 6166. (Certain GST taxes may be deferred as well; see section 6166(i) for 
   more information.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                 

To determine over how many installments the estate tax                                      Computation.            Interest on the portion of the tax in excess 
may be paid, please refer to sections 6166(a), (b)(7), (b)(8),                          of the 2% portion is figured at 45% of the annual rate of 
and (b)(10).                                                                            interest on underpayments. This rate is based on the federal 
                                                                                        short-term rate and is announced quarterly by the IRS in the 
Time for payment. Under the installment method, the 
                                                                                        Internal Revenue Bulletin.
executor may elect to defer payment of the qualified estate 
tax, but not interest, for up to 5 years from the original                                  If you elect installment payments and the estate tax due is 
payment due date. After the first installment of tax is paid,                           more than the maximum amount to which the 2% interest rate 
you must pay the remaining installments annually by the date                            applies, each installment payment is deemed to comprise 
1 year after the due date of the preceding installment. There                           both tax subject to the 2% interest rate and tax subject to 
can be no more than 10 installment payments.                                            45% of the regular underpayment rate. The amount of each 
                                                                                        installment that is subject to the 2% rate is the same as the 
Interest on the unpaid portion of the tax is not deferred and 
                                                                                        percentage of total tax payable in installments that is subject 
must be paid annually. Interest must be paid at the same time 
                                                                                        to the 2% rate.
as and as a part of each installment payment of the tax.
                                                                                                    The interest paid on installment payments is not 
Acceleration of payments.         If the estate fails to make 
                                                                                                    deductible as an administrative expense of the 
payments of tax or interest within 6 months of the due date,                            CAUTION!
                                                                                                    estate.
the IRS may terminate the right to make installment payments 
and force an acceleration of payment of the tax upon notice                             Making the election.                If you check this line to make a final 
and demand. Upon notice and demand, a penalty will be                                   election, you must attach the notice of election described in 
imposed for an amount that is 5% of the payment multiplied                              Regulations section 20.6166-1(b). If you check this line to 
by the number of months (or fractions thereof) after the due                            make a protective election, you must attach a notice of 
date and before the payment is made.                                                    protective election as described in Regulations section 
Generally, if any portion of the interest in the closely held                           20.6166-1(d). Regulations section 20.6166-1(b) requires that 
business which qualifies for installment payments is                                    the notice of election is made by attaching to a timely filed 
distributed, sold, exchanged, or otherwise disposed of, or                              estate tax return the following information.
money and other property attributable to such an interest is                              •   The decedent's name and taxpayer identification number 
withdrawn, and the aggregate of those events equals or                                        (TIN) as they appear on the estate tax return.
exceeds 50% of the value of the interest, then the right to                               •   The amount of tax that is to be paid in installments.
make installment payments will be terminated, and the                                     •   The date selected for payment of the first installment.
unpaid portion of the tax will be due upon notice and                                     •   The number of annual installments, including first 
demand. See section 6166(g)(1)(A).                                                            installment, in which the tax is to be paid.
Interest computation.     A special interest rate applies to                              •   The properties shown on the estate tax return that are the 
installment payments. For decedents dying in 2023, the                                        closely held business interest (identified by schedule and 
interest rate is 2% on the lesser of:                                                         item number).
•  $700,000, or                                                                           •   The facts that formed the basis for the executor's 
•  The amount of the estate tax that is attributable to the                                   conclusion that the estate qualifies for payment of the 
   closely held business and that is payable in installments.                                 estate tax in installments.
2% portion.  The 2% portion is an amount equal to the                                       You may also elect to pay certain GST taxes in 
amount of the tentative estate tax (on $1 million plus the                              installments. See section 6166(i).
applicable exclusion amount in effect) minus the applicable 
credit amount in effect. However, if the amount of estate tax                           Line 4. Reversionary or Remainder Interests
extended under section 6166 is less than the amount figured                             For details of this election, see section 6163 and the related 
above, the 2% portion is the lesser amount.                                             regulations.
Inflation adjustment.       The $1 million amount used to 
figure the 2% portion is indexed for inflation for the estates of 
decedents who died in a calendar year after 1998. For an 
estate of a decedent who died in 2023, the dollar amount 
used to determine the “2% portion” of the estate tax payable 
in installments under section 6166 is $1,750,000.

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                                                                      Identifying number. Enter the SSN of each individual 
Part 4—General Information                                            beneficiary listed. If the number is unknown, or the individual 
                                                                      has no number, please indicate “unknown” or “none.” For 
Authorization                                                         trusts and other estates, enter the employer identification 
Completing the authorization will authorize one attorney,             number (EIN).
accountant, or enrolled agent to represent the estate and             Relationship. For each individual beneficiary, enter the 
receive confidential tax information, but will not authorize the      relationship (if known) to the decedent by reason of blood, 
representative to enter into closing agreements for the estate.       marriage, or adoption. For trust or estate beneficiaries, 
If you would like to authorize your representative to enter into      indicate “TRUST” or “ESTATE.”
agreements or perform other designated acts on behalf of the 
estate, you must file Form 2848 with Form 706.                        Amount. Enter the amount actually distributed (or to be 
                                                                      distributed) to each beneficiary including transfers during the 
Note. If you intend for the representative to represent the           decedent's life from Schedule G required to be included in 
estate before the IRS, the representative must complete and           the gross estate. The value to be entered need not be exact. 
sign this authorization.                                              A reasonable estimate is sufficient. For example, where 
                                                                      precise values cannot readily be determined, as with certain 
Complete and attach Form 2848 if you would like to                    future interests, a reasonable approximation should be 
authorize:                                                            entered. The total of these distributions should approximate 
• Persons other than attorneys, accountants, or enrolled              the amount of gross estate reduced by funeral and 
  agents to represent the estate;                                     administrative expenses, debts and mortgages, bequests to 
• More than one person to receive confidential information            surviving spouse, charitable bequests, and any federal and 
  or represent the estate; or                                         state estate and GST taxes paid (or payable) relating to the 
• Someone to sign agreements, consents, waivers, or                   benefits received by the beneficiaries listed on lines 4 and 5.
  other documents for the estate.                                     All distributions of less than $5,000 to specific 
Filing a completed Form 2848 with this return may                     beneficiaries may be included with distributions to 
expedite processing of the Form 706.                                  unascertainable beneficiaries on the line provided.

If you wish only to authorize someone to inspect and/or               Line 6. Protective Claim for Refund
receive confidential tax information (but not to represent you        If you answered “Yes,” complete Schedule PC for each claim. 
before the IRS), complete and file Form 8821.                         Two copies of each Schedule PC must be filed with the 
                                                                      return.
Line 3
                                                                      A protective claim for refund may be filed when there is an 
Enter the marital status of the decedent at the time of death         unresolved claim or expense that will not be deductible under 
by checking the appropriate box on line 3a. If the decedent           section 2053 before the expiration of the period of limitation 
was married at the time of death, complete line 4. If the             under section 6511(a). To preserve the estate's right to a 
decedent had one or more prior marriages, complete line 3b            refund once the claim or expense has been finally 
by providing the name and SSN of each former spouse, the              determined, the protective claim must be filed before the end 
date(s) the marriage ended, and specify whether the                   of the limitations period. For more information on how to file a 
marriage ended by annulment, divorce decree, or death of              protective claim for refund with this Form 706, see the 
spouse. If the prior marriage ended in death and the                  instructions for Schedule PC, later.
predeceased spouse died after December 31, 2010, 
complete Part 6—Portability of Deceased Spousal Unused                Line 7. Section 2044 Property
Exclusion, Section D, if the estate of the predeceased 
spouse elected to allow the decedent to use any unused                If you answered “Yes,” these assets must be shown on 
exclusion amount. For more information, see section 2010(c)           Schedule F.
(4) and related regulations.                                          Section 2044 property is property for which a previous 
                                                                      section 2056(b)(7) election (QTIP election) has been made, 
Line 4                                                                or for which a similar gift tax election (section 2523) has been 
Complete line 4 whether or not there is a surviving spouse            made. For more information, see the instructions for 
and whether or not the surviving spouse received any                  Schedule F, later.
benefits from the estate. If there was no surviving spouse on 
the date of the decedent's death, enter “None” on line 4a and         Line 9. Insurance Not Included in the Gross 
leave lines 4b and 4c blank. The value entered on line 4c             Estate
need not be exact. See Amount under line 5, later.                    If you answered “Yes” to either line 9a or 9b, for each policy 
Note. Do not include any DSUE amount transferred to the               you must complete and attach Schedule D, Form 712, and an 
surviving spouse in the total entered on line 4c.                     explanation of why the policy or its proceeds are not 
                                                                      includible in the gross estate.
Line 5
                                                                      Line 11. Partnership Interests and Stock in 
Name. Enter the name of each individual, trust, or estate             Close Corporations
that received (or will receive) benefits of $5,000 or more from 
                                                                      If you answered “Yes” on line 11a, you must include full 
the estate directly as an heir, next-of-kin, devisee, or legatee; 
                                                                      details for partnerships (including family limited 
or indirectly (for example, as beneficiary of an annuity or 
                                                                      partnerships), unincorporated businesses, and limited liability 
insurance policy, shareholder of a corporation, or partner of a 
                                                                      companies (LLCs) on Schedule F (Schedule E if the 
partnership that is an heir, etc.).
                                                                      partnership interest is jointly owned). Also include full details 

Instructions for Form 706 (Rev. 09-2023)                          -17-

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for fractional interests in real estate on Schedule A and for         • Schedule H, if you answered “Yes” to question 14 of Part 
stock of inactive or close corporations on Schedule B.                  4—General Information.
Value these interests using the rules of Regulations                  • Schedule I, if you answered “Yes” to question 16 of Part 
                                                                        4—General information.
section 20.2031-2 (stocks) or 20.2031-3 (other business 
interests).                                                           Item 10.   Under Regulations section 20.2010-2(a)(7)(ii), if 
A close corporation is a corporation whose shares are                 the total value of the gross estate and adjusted taxable gifts 
owned by a limited number of shareholders. Often, one family          is less than the basic exclusion amount (see section 6018(a)) 
holds the entire stock issue. As a result, little, if any, trading of and Form 706 is being filed only to elect portability of the 
the stock takes place. There is, therefore, no established            DSUE amount, the estate is not required to report the value 
market for the stock, and those sales that do occur are at            of certain property eligible for the marital or charitable 
irregular intervals and seldom reflect all the elements of a          deduction. For this property being reported on Schedules A, 
representative transaction as defined by FMV.                         B, C, D, E, F, G, H, and I, the executor must figure the best 
                                                                      estimate of the value. Do not include the estimated value on 
Line 13. Trusts                                                       the line corresponding to the schedule on which the property 
                                                                      was reported. Instead, total the estimated value of the assets 
If you answered “Yes” on either line 13a or line 13b, attach a        subject to the special rule and enter on item 10 the amount 
copy of the trust instrument for each trust.                          from the Table of Estimated Values, later, that corresponds to 
Complete Schedule G if you answered “Yes” on line 13a                 that total.
and Schedule F if you answered “Yes” on line 13b.
                                                                      Note. The special rule does not apply if the valuation of the 
Line 15. Foreign Accounts                                             asset is needed to determine the estate's eligibility for the 
Check “Yes” on line 15 if the decedent at the time of death           provisions of section 2032, 2032A, 2652(a)(3), or 6166, or 
had an interest in or signature or other authority over a             any other provision of the Code or regulations.
financial account in a foreign country, such as a bank                Note. As applies to all other values reported on Form 706, 
account, securities account, an offshore trust, or other              estimates of the value of property subject to the special rule 
financial account.                                                    of Regulations section 20.2010-2(a)(7)(ii) must result from 
                                                                      the executor’s exercise of due diligence and are subject to 
Part 5—Recapitulation                                                 penalties of perjury.

Gross Estate—Items 1 Through 11                                       Exclusion—Item 12
Items 1 through 9. You must make an entry in each of items            Item 12. Conservation easement exclusion.        Complete 
1 through 9.                                                          and attach Schedule U (along with any required attachments) 
                                                                      to claim the exclusion on this line.
If the gross estate does not contain any assets of the type 
specified by a given item, enter zero for that item. Entering         Deductions—Items 14 Through 23
zero for any of items 1 through 9 is a statement by the 
executor, made under penalties of perjury, that the gross             Items 14 through 22. Attach the appropriate schedules for 
estate does not contain any includible assets covered by that         the deductions claimed.
item.                                                                 Item 18.   If item 17 is less than or equal to the value (at the 
Do not enter any amounts in the “Alternate value” column              time of the decedent's death) of the property subject to 
unless you elected alternate valuation on Part 3—Elections            claims, enter the amount from item 17 on item 18.
by the Executor, line 1.                                              If the amount on item 17 is more than the value of the 
Note. If estimating the value of one or more assets pursuant          property subject to claims, enter the greater of:
to the special rule of Regulations section 20.2010-2(a)(7)(ii),       • The value of the property subject to claims, or
do not enter values for those assets in items 1 through 9.            • The amount actually paid at the time the return is filed.
Total the estimated values for those assets and follow the            In no event should you enter more on item 18 than the 
instructions for item 10.                                             amount on item 17. See section 2053 and the related 
                                                                      regulations for more information.
Which schedules to attach for items 1 through 9.        You 
must attach the following.                                            Item 23.   Under Regulations section 20.2010-2(a)(7)(ii), if 
• Schedule F. Answer its questions even if you report no              the total value of the gross estate and adjusted taxable gifts 
  assets on it.                                                       is less than the basic exclusion amount (see section 6018(a)) 
• Schedules A, B, and C, if the gross estate includes any             and Form 706 is being filed only to elect portability of the 
  (1) Real Estate, (2) Stocks and Bonds, or (3) Mortgages,            DSUE amount, the estate is not required to report the value 
  Notes, and Cash, respectively.                                      of certain property eligible for the marital or charitable 
• Schedule D, if the gross estate includes any life                   deduction. For this property being reported on Schedule M or 
  insurance or if you answered “Yes” to question 9a of Part           O, enter on item 23 the amount from item 10.
  4—General Information.
• Schedule E, if the gross estate contains any jointly 
                                                                      Part 6—Portability of Deceased 
  owned property or if you answered “Yes” to question 10 
  of Part 4—General Information.                                      Spousal Unused Exclusion (DSUE)
• Schedule G, if the decedent made any of the lifetime                Section 2010(c)(4) authorizes estates of decedents dying 
  transfers to be listed on that schedule or if you answered          after December 31, 2010, to elect to transfer any unused 
  “Yes” to question 12 or 13a of Part 4—General                       exclusion to the surviving spouse. The amount received by 
  Information.

                                                                -18-                       Instructions for Form 706 (Rev. 09-2023)

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Table of Estimated Values
If the total estimated value of the assets But less than or equal to: Include this amount on lines 10 and 23:
eligible for the special rule under Reg. 
section 20.2010-2(a)(7)(ii) is more than:
              $0                           $250,000                   $250,000
              $250,000                     $500,000                   $500,000
              $500,000                     $750,000                   $750,000
              $750,000                     $1,000,000                 $1,000,000
$1,000,000                                 $1,250,000                 $1,250,000
$1,250,000                                 $1,500,000                 $1,500,000
$1,500,000                                 $1,750,000                 $1,750,000
$1,750,000                                 $2,000,000                 $2,000,000
$2,000,000                                 $2,250,000                 $2,250,000
$2,250,000                                 $2,500,000                 $2,500,000
$2,500,000                                 $2,750,000                 $2,750,000
$2,750,000                                 $3,000,000                 $3,000,000
$3,000,000                                 $3,250,000                 $3,250,000
$3,250,000                                 $3,500,000                 $3,500,000
$3,500,000                                 $3,750,000                 $3,750,000
$3,750,000                                 $4,000,000                 $4,000,000
$4,000,000                                 $4,250,000                 $4,250,000
$4,250,000                                 $4,500,000                 $4,500,000
$4,500,000                                 $4,750,000                 $4,750,000
$4,750,000                                 $5,000,000                 $5,000,000
$5,000,000                                 $5,250,000                 $5,250,000
$5,250,000                                 $5,500,000                 $5,500,000
$5,500,000                                 $5,750,000                 $5,750,000
$5,750,000                                 $6,000,000                 $6,000,000
$6,000,000                                 $6,250,000                 $6,250,000
$6,250,000                                 $6,500,000                 $6,500,000
$6,500,000                                 $6,750,000                 $6,750,000
$6,750,000                                 $7,000,000                 $7,000,000
$7,000,000                                 $7,250,000                 $7,250,000
$7,250,000                                 $7,500,000                 $7,500,000
$7,500,000                                 $7,750,000                 $7,750,000
$7,750,000                                 $8,000,000                 $8,000,000
$8,000,000                                 $8,250,000                 $8,250,000
$8,250,000                                 $8,500,000                 $8,500,000
$8,500,000                                 $8,750,000                 $8,750,000
$8,750,000                                 $9,000,000                 $9,000,000
$9,000,000                                 $9,250,000                 $9,250,000
$9,250,000                                 $9,500,000                 $9,500,000
$9,500,000                                 $9,750,000                 $9,750,000
$9,750,000                                 $10,000,000                $10,000,000
$10,000,000                                $10,250,000                $10,250,000
$10,250,000                                $10,500,000                $10,500,000
$10,500,000                                $10,750,000                $10,750,000
$10,750,000                                $11,000,000                $11,000,000

Instructions for Form 706 (Rev. 09-2023)   -19-

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Table of Estimated Values (continued)
If the total estimated value of the assets             But less than or equal to:  Include this amount on lines 10 and 23:
eligible for the special rule under Reg. 
section 20.2010-2(a)(7)(ii) is more than:
             $11,000,000                                        $11,180,000                         $11,180,000
             $11,180,000                                        $11,400,000                         $11,400,000
             $11,400,000                                        $11,580,000                         $11,580,000
             $11,580,000                                        $11,700,000                         $11,700,000
             $11,700,000                                        $12,060,000                         $12,060,000
             $12,060,000                                        $12,920,000                         $12,920,000

the surviving spouse is called the deceased spousal unused           The timely filing of a complete Form 706 with DSUE will be 
exclusion (DSUE) amount. If the executor of the decedent’s      deemed a portability election if there is a surviving spouse. 
estate elects transfer, or portability, of the DSUE amount, the The election is effective as of the decedent’s date of death, 
surviving spouse can apply the DSUE amount received from        so the DSUE amount received by a surviving spouse may be 
the estate of the surviving spouse’s last deceased spouse       applied to any transfer occurring after the decedent’s death. 
(defined later) against any tax liability arising from          A portability election is irrevocable, unless an adjustment or 
subsequent lifetime gifts and transfers at death.               amendment to the election is made on a subsequent return 
                                                                filed on or before the due date.
Note. A nonresident surviving spouse who is not a citizen of 
the United States may not take into account the DSUE            Note.       Under Regulations section 20.2010-2(a)(5), the 
amount of a deceased spouse, except to the extent allowed       executor of an estate of a nonresident decedent who was not 
by treaty with the nonresident surviving spouse’s country of    a citizen of the United States at the time of death cannot 
citizenship.                                                    make a portability election.
                                                                     If an executor is appointed, qualified, and acting with the 
Last Deceased Spouse Limitation
                                                                United States on behalf of the decedent’s estate, only that 
The last deceased spouse is the most recently deceased          executor may make or opt out of a portability election. If there 
person who was married to the surviving spouse at the time      is no executor, see Regulations section 20.2010-2(a)(6)(ii).
of that person’s death. The identity of the last deceased 
spouse is determined as of the day a taxable gift is made, or   Opting Out
in the case of a transfer at death, the date of the surviving   If an estate files a Form 706 but does not wish to make the 
spouse's death. The identity of the last deceased spouse is     portability election, the executor can opt out of the portability 
not impacted by whether the decedent's estate elected           election by checking the box indicated in Section A of this 
portability or whether the last deceased spouse had any         Part. If no return is required under section 6018(a), not filing 
DSUE amount available. Remarriage also does not affect the      Form 706 will avoid making the election.
designation of the last deceased spouse and does not 
prevent the surviving spouse from applying the DSUE             Figuring the DSUE Amount
amount to taxable transfers.
                                                                Regulations section 20.2010-2(b)(1) requires that a 
When a taxable gift is made, the DSUE amount received           decedent's DSUE be figured on the estate tax return. The 
from the last deceased spouse is applied before the surviving   DSUE amount is the lesser of (a) the basic exclusion amount 
spouse’s basic exclusion amount. A surviving spouse may         in effect on the date of death of the decedent whose DSUE is 
use the DSUE amount of the last deceased spouse to offset       being figured, or (b) the decedent's applicable exclusion 
the tax on any taxable transfer made after the deceased         amount less the amount on line 5 of Part 2—Tax Computation 
spouse's death. A surviving spouse who has more than one        on the Form 706 for the estate of the decedent. Amounts on 
predeceased spouse is not precluded from using the DSUE         which gift taxes were paid are excluded from adjusted taxable 
amount of each spouse in succession. A surviving spouse         gifts for the purpose of this computation.
may not use the sum of DSUE amounts from multiple                    When a surviving spouse applies the DSUE amount to a 
predeceased spouses at one time nor may the DSUE amount         lifetime gift or bequest at death, the IRS may examine any 
of a predeceased spouse be applied after the death of a         return of a predeceased spouse whose executor elected 
subsequent spouse.                                              portability to verify the allowable DSUE amount. The DSUE 
                                                                amount may be adjusted or eliminated as a result of the 
Making the Election
                                                                examination; however, the IRS may only make an 
A timely filed and complete Form 706 is required to elect       assessment of additional tax on the return of the 
portability of the DSUE amount to a surviving spouse. The       predeceased spouse within the applicable limitations period 
filing requirement applies to all estates of decedents          under section 6501.
choosing to elect portability of the DSUE amount, regardless 
of the size of the estate. A timely filed return is one that is Special Rule Where Value of Certain Property 
filed on or before the due date of the return, including        Not Required To Be Reported on Form 706
extensions. See Rev. Proc. 2022-32 (superseding Rev. Proc. 
2017-34) for the simplified procedures for late elections.      The regulations provide that executors of estates who are not 
                                                                otherwise required to file Form 706 under section 6018(a) do 
                                                                not have to report the value of certain property qualifying for 

                                                                -20-              Instructions for Form 706 (Rev. 09-2023)

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the marital or charitable deduction. For such property, the          On line 1, enter the decedent’s applicable exclusion 
executor may estimate the value in good faith and with the           amount from Part 2—Tax Computation, line 9d. The 
due diligence to be afforded all assets includible in the gross      applicable exclusion amount is the sum of the basic exclusion 
estate. The amount reported on Form 706 will correspond to           amount for the year of death, any DSUE amount received 
a range of dollar values and will be included in the value of        from a predeceased spouse, if applicable, and any Restored 
the gross estate shown on Part 2—Tax Computation, line 1.            Exclusion Amount.
See the instructions for Part 5—Recapitulation, items 10 and         Line 2 is reserved.
23, earlier, for more details.
                                                                     On line 3, enter the value of the cumulative lifetime gifts on 
Specific Instructions                                                which gift tax was paid or payable. This amount is figured on 
                                                                     line 6 of the Line 7 Worksheet, Part B, as the total of Row (r) 
Portability Election. If you intend to elect portability of the      from the Line 7 Worksheet, Part A. Enter the amount as it 
DSUE amount, timely filing a complete Form 706 is all that is        appears on line 6 of the Line 7 Worksheet, Part B.
required. Complete Section B if any assets of the estate are         Figure the unused exclusion amount on line 9. The DSUE 
being transferred to a qualified domestic trust and complete         amount available to the surviving spouse will be the lesser of 
Section C of this Part to figure the DSUE amount that will be        this amount or the basic exclusion amount shown on Part 
transferred to the surviving spouse.                                 2—Tax Computation, line 9a. Enter the DSUE amount as 
Section A. Opting Out of Portability. If you are filing Form         determined on line 10.
706 and do not wish to elect portability, then check the box         Section D. DSUE Amount Received From Predeceased 
indicated. Do not complete Section B or C.                           Spouse(s). Complete Section D if the decedent was a 
Section B. Portability and Qualified Domestic Trusts                 surviving spouse who received a DSUE amount from one or 
(QDOTs). A QDOT allows the estate of a decedent to                   more predeceased spouses.
bequeath property to a surviving spouse who is not a citizen         Section D requests information on all DSUE amounts 
of the United States and still receive a marital deduction.          received from the decedent’s last deceased spouse and any 
When property passes to a QDOT, estate tax is imposed                previously deceased spouses. Each line in the chart should 
under section 2056A as distributions are made from the trust.        reflect a different predeceased spouse; enter the calendar 
When a QDOT is established and there is a DSUE amount,               year(s) in column F. In Part 1, provide information on the 
the executor of the decedent’s estate will determine a               decedent’s last deceased spouse. In Part 2, provide 
preliminary DSUE amount for the purpose of electing                  information as requested if the decedent had any other 
portability. This amount will decrease as section 2056A              predeceased spouse whose executor made the portability 
distributions are made. In estates with a QDOT, the DSUE             election. Any remaining DSUE amount which was not used 
amount generally may not be applied against tax arising from         prior to the death of a subsequent spouse is not considered 
lifetime gifts because it will not be available to the surviving     in this calculation and cannot be applied against any taxable 
spouse until it is finally determined, usually upon the death of     transfer. In column E, total only the amounts of DSUE 
the surviving spouse or when the QDOT is terminated.                 received and used from spouses who died before the 
                                                                     decedent’s last deceased spouse. Add this amount to the 
Note. If a surviving spouse who is not a citizen of the United       amount from Part 1, column D, if any, to determine the 
States becomes a citizen and the section 2056A tax no                decedent’s total DSUE amount.
longer applies to the assets of the QDOT, as of the date the 
surviving spouse becomes a U.S. citizen, the DSUE amount 
is considered final and is available for application by the          Schedule A—Real Estate
surviving spouse. See Regulations sections 20.2010-2(c)(4), 
                                                                              If any assets to which the special rule of Regulations 
20.2010-3(c)(3), and 25.2505-2(d)(3).
                                                                              section 20.2010-2(a)(7)(ii) applies are reported on 
Check the appropriate box in this section and see the                CAUTION! this schedule, do not enter any value in the last three 
instructions for Schedule M if more information is needed            columns. See the instructions for Part 5—Recapitulation, item 
about QDOT.                                                          10, for information on how to estimate and report the value of 
Section C. DSUE Amount Portable to Decedent's Surviv-                these assets.
ing Spouse. Complete Section C only if electing portability 
of the DSUE amount to the surviving spouse.

Instructions for Form 706 (Rev. 09-2023)                         -21-

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Schedule A—Example 1
                          In this example, alternate valuation is not adopted; the date of death is January 1, 2023.
  Item                                                  Description                                                       Alternate Alternate Value at 
number                                                                                                                    valuation value     date of 
                                                                                                                          date                death
1      House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100 due at 
       the end of each quarter, February 1, May 1, August 1, and November 1. Value based on appraisal, 
       copy of which is attached  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       $550,000
       Rent due on item 1 for quarter ending November 1, 2022, but not collected at date of death                 . . .                             8,100
       Rent accrued on item 1 for November and December 2022                . . . . . . . . . . . . . . . . . . . . . .                             5,400
2      House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800 payable 
       monthly. Value based on appraisal, copy of which is attached           . . . . . . . . . . . . . . . . . . . . .                       375,000
       Rent due on item 2 for December 2022, but not collected at death             . . . . . . . . . . . . . . . . . .                             1,800

Schedule A—Example 2
                            In this example, alternate valuation is adopted; the date of death is January 1, 2023.
  Item                                                  Description                                                       Alternate Alternate Value at 
number                                                                                                                    valuation value     date of 
                                                                                                                          date                death
1      House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100 due at 
       the 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 of date of death. . . . . . . . . . . . .               7/1/23    $535,000  $550,000
       Rent due on item 1 for quarter ending November 1, 2022, but not collected until February 1, 
       2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2/1/23    8,100           8,100
       Rent accrued on item 1 for November and December 2022, collected on February 1, 2023                     . . . .   2/1/23    5,400           5,400
2      House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800 payable 
       monthly. Value based on appraisal, copy of which is attached. Property exchanged for farm on May 
       1, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5/1/23    369,000   375,000
       Rent due on item 2 for December 2022, but not collected until February 1, 2023 . . . . . . . . . .                 2/1/23    1,800           1,800

  If the total gross estate contains any real estate, complete                          and not the equity in the value column. Deduct the unpaid 
Schedule A and file it with the return. On Schedule A, list real                        part of the purchase price on Schedule K.
estate the decedent owned or had contracted to purchase. 
Number each parcel in the left-hand column.                                                 Report the value of real estate without reducing it for 
                                                                                        homestead or other exemption, or the value of dower, 
  Describe the real estate in enough detail so that the IRS                             curtesy, or a statutory estate created instead of dower or 
can easily locate it for inspection and valuation. For each                             curtesy.
parcel of real estate, report the area and, if the parcel is                                Explain how the reported values were determined and 
improved, describe the improvements. For city or town                                   attach copies of any appraisals.
property, report the street and number, ward, subdivision, 
block and lot, etc. For rural property, report the township, 
range, landmarks, etc.                                                                  Schedule A-1—Section 2032A 
  If any item of real estate is subject to a mortgage for which                         Valuation
the decedent's estate is liable, that is, if the indebtedness                           The election to value certain farm and closely held business 
may be charged against other property of the estate that is                             property at its special-use value is made by checking “Yes” 
not subject to that mortgage, or if the decedent was                                    on Form 706, Part 3—Elections by the Executor, line 2. 
personally liable for that mortgage, you must report the full                           Schedule A-1 is used to report the additional information that 
value of the property in the value column. Enter the amount of                          must be submitted to support this election. In order to make a 
the mortgage under “Description” on this schedule. The                                  valid election, you must complete Schedule A-1 and attach 
unpaid amount of the mortgage may be deducted on                                        all of the required statements and appraisals.
Schedule K.                                                                                 For definitions and additional information concerning 
  If the decedent’s estate is not liable for the amount of the                          special-use valuation, see section 2032A and the related 
mortgage, report only the value of the equity of redemption                             regulations.
(or value of the property less the indebtedness) in the value 
column as part of the gross estate. Do not enter any amount                             Part 1. Type of Election
less than zero. Do not deduct the amount of indebtedness on                             Estate and GST tax elections.     If you elect special-use 
Schedule K.                                                                             valuation for the estate tax, you must also elect special-use 
                                                                                        valuation for the GST tax and vice versa.
  Also list on Schedule A real property the decedent 
contracted to purchase. Report the full value of the property 

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Protective election. To make the protective election                 Completing the fair market value worksheets.
described in the separate instructions for Part 3—Elections          • Schedule R, Parts 2 and 3, lines 2 and 3, fixed taxes and 
by the Executor, line 2, you must complete the following.              other charges. If valuing the interests at FMV (instead of 
• Check the box in Part 1. Type of Election.                           special-use value) causes any of these taxes and 
• Enter the decedent's name and SSN in the spaces                      charges to increase, enter the increased amount (only) 
  provided at the top of Schedule A-1.                                 on these lines and attach an explanation of the increase. 
• Complete Part 2. Notice of Election, line 1, and column A            Otherwise, enter -0-.
  for lines 3 and 4.                                                 • Schedule R, Parts 2 and 3, line 6—GST exemption 
                                                                       allocation. If you completed Schedule R, Part 1, line 10, 
For purposes of the protective election, list on line 3 all of         enter on line 6 the amount shown for the skip person on 
the real property that passes to the qualified heirs even              the line 10 special-use allocation schedule you attached 
though some of the property will be shown on line 2 when the           to Schedule R. If you did not complete Schedule R, Part 
additional notice of election is subsequently filed.                   1, line 10, enter -0- on line 6.
You don’t need to complete columns B through D of lines 3 
and 4 or any other line entries on Schedule A-1.                     Total GST tax savings. For each skip person, subtract the 
                                                                     tax amount on line 10, Part 2, of the special-use value 
Completing Schedule A-1 as described above constitutes               worksheet from the tax amount on line 10, Part 2, of the fair 
a Notice of Protective Election as described in Regulations          market value worksheet. This difference is the skip person's 
section 20.2032A-8(b).                                               total GST tax savings.

Part 2. Notice of Election                                           Part 3. Agreement to Special Valuation Under 
Line 10. Because the special-use valuation election creates          Section 2032A
a potential tax liability for the recapture tax of section           The agreement to special valuation is required under 
2032A(c), you must list each person who receives an interest         sections 2032A(a)(1)(B) and (d)(2) and must be signed by all 
in the specially valued property on Schedule A-1. If there are       parties who have any interest in the property being valued 
more than eight persons who receive interests, use an                based on its qualified use as of the date of the decedent's 
additional sheet that follows the format of line 10. In the          death.
columns “Fair market value” and “Special-use value,” enter 
the total respective values of all the specially valued property     An interest in property is an interest that, as of the date of 
interests received by each person.                                   the decedent's death, can be asserted under applicable law 
                                                                     so as to affect the disposition of the specially valued property 
GST Tax Savings                                                      by the estate. Any person who at the decedent's death has 
To figure the additional GST tax due upon disposition (or            any such interest in the property, whether present, future, 
cessation of qualified use) of the property, each “skip person”      vested, or contingent, must enter into the agreement. 
(as defined in the instructions for Schedule R) who receives         Included are the following.
an interest in the specially valued property must know the           • Owners of remainder and executory interests;
total GST tax savings all interests in specially valued property     • Holders of general or special powers of appointment;
received. The GST tax savings is the difference between the          • Beneficiaries of a gift over in default of exercise of any 
total GST tax that was imposed on all interests in specially           such power;
valued property received by the skip person valued at their          • Joint tenants and holders of similar undivided interests 
special-use value and the total GST tax that would have been           when the decedent held only a joint or undivided interest 
imposed on the same interests received by the skip person              in the property or when only an undivided interest is 
had they been valued at their FMV.                                     specially valued; and
                                                                     • Trustees of trusts and representatives of other entities 
Because the GST tax depends on the executor's                          holding title to or any interests in the property.
allocation of the GST exemption and the grandchild 
exclusion, the skip person who receives the interests is             An heir who has the power under local law to challenge a will 
unable to figure this GST tax savings. Therefore, for each           and thereby affect disposition of the property is not, however, 
skip person who receives an interest in specially valued             considered to be a person with an interest in property under 
property, you must attach a calculation of the total GST tax         section 2032A solely by reason of that right. Likewise, 
savings attributable to that person's interests in specially         creditors of an estate are not such persons solely by reason 
valued property.                                                     of their status as creditors.
How to figure the GST tax savings. Before figuring each              If persons required to enter into the agreement desire that 
skip person's GST tax savings, complete Schedules R and              an agent act for them or cannot legally bind themselves due 
R-1 for the entire estate (using the special-use values).            to infancy or other incompetency, or due to death before the 
For each skip person, complete two Schedules R (Parts 2              election under section 2032A is timely exercised, a 
and 3 only) as worksheets, one showing the interests in              representative authorized by local law to bind persons in 
specially valued property received by the skip person at their       agreements of this nature may sign the agreement on the 
special-use value and one showing the same interests at              person’s behalf.
their FMV.                                                           The IRS will contact the agent designated in the 
If the skip person received interests in specially valued            agreement on all matters relating to continued qualification 
property that were shown on Schedule R-1, show these                 under section 2032A of the specially valued real property and 
interests on the Schedule R, Parts 2 and 3 worksheets, as            on all matters relating to the special lien arising under section 
appropriate. Do not use Schedule R-1 as a worksheet.                 6324B. It is the duty of the agent as attorney-in-fact for the 
Completing the special-use value worksheets.               On        parties with interests in the specially valued property to 
Schedule R, Parts 2 and 3, lines 2 through 4 and 6, enter -0-.       furnish the IRS with any requested information and to notify 

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the IRS of any disposition or cessation of qualified use of any         Does the notice of election include a statement that 
part of the property.                                                   the decedent and/or a member of the decedent’s 
                                                                        family has owned all of the specially valued property 
Checklist for Section 2032A Election
                                                                        for at least 5 years of the 8 years immediately 
        When making the special-use valuation election on               preceding the date of the decedent's death?
!       Schedule A-1, please use this checklist to ensure 
CAUTION that you are providing everything necessary to make 
                                                                        Does the notice of election include a statement as to 
a valid election.
                                                                        whether there were any periods during the 8-year 
To have a valid special-use valuation election under                    period preceding the decedent's date of death 
section 2032A, you must file, in addition to the federal estate         during which the decedent or a member of the 
tax return, (a) a notice of election (Schedule A-1, Part 2), and        decedent’s family did not (a) own the property to be 
(b) a fully executed agreement (Schedule A-1, Part 3). You 
                                                                        specially valued, (b) use it in a qualified use, or (c) 
must include certain information in the notice of election. To 
ensure that the notice of election includes all of the                  materially participate in the operation of the farm or 
information required for a valid election, use the following            other business? (See section 2032A(e)(6).)
checklist. The checklist is for your use only. Do not file it with 
the return.                                                             Does the notice of election include, for each item of 
                                                                        specially valued property, the name of every person 
                                                                        who has an interest in that item of specially valued 
  Does the notice of election include the decedent's                    property and the following information about each 
  name and SSN as they appear on the estate tax                         such person: (a) the person's address, (b) the 
  return?                                                               person's TIN, (c) the person's relationship to the 
                                                                        decedent, and (d) the value of the property interest 
  Does the notice of election include the relevant                      passing to that person based on both FMV and 
  qualified use of the property to be specially valued?                 qualified use?

  Does the notice of election describe the items of                     Does the notice of election include affidavits 
  real property shown on the estate tax return that are                 describing the activities constituting material 
  to be specially valued and identify the property by                   participation and the identities of the material 
  the Form 706 schedule and item number?                                participants?

  Does the notice of election include the FMV of the                    Does the notice of election include a legal 
  real property to be specially valued and also include                 description of each item of specially valued 
  its value based on the qualified use (determined                      property? (Note. The legal description must be the 
  without the adjustments provided in section                           complete legal description of the property. An 
  2032A(b)(3)(B))?                                                      abbreviated description is not sufficient.)

  Does the notice of election include the adjusted                      (In the case of an election made for qualified woodlands, 
  value (as defined in section 2032A(b)(3)(B)) of (a)                   the information included in the notice of election must 
  all real property that both passes from the decedent                  include the reason for entitlement to the woodlands 
  and is used in a qualified use, without regard to                     election.)
  whether it is to be specially valued; and (b) all real 
  property to be specially valued?
                                                                        Any election made under section 2032A will not be valid 
  Does the notice of election include (a) the items of             unless a properly executed agreement (Schedule A-1, Part 3) 
  personal property shown on the estate tax return                 is filed with the estate tax return. To ensure that the 
  that pass from the decedent to a qualified heir, and             agreement satisfies the requirements for a valid election, use 
  that are used in qualified use; and (b) the total value          the following checklist. The checklist is for your use only. Do 
  of such personal property adjusted under section                 not file it with the return.
  2032A(b)(3)(B)?
                                                                        Has the agreement been signed by each qualified 
  Does the notice of election include the adjusted                      heir having an interest in the property being 
  value of the gross estate? (See section 2032A(b)(3)                   specially valued?
  (A).)
                                                                        Has every qualified heir expressed consent to 
  Does the notice of election include the method used                   personal liability under section 2032A(c) in the 
  to determine the special-use value?                                   event of an early disposition or early cessation of 
                                                                        qualified use?
  Does the notice of election include copies of written 
  appraisals of the FMV of the real property?

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  Is the agreement that is actually signed by the                   • Issue;
  qualified heirs in a form that is binding on all of the           • Par value where needed for identification;
  qualified heirs having an interest in the specially               • Price per share;
  valued property?                                                  • Exact name of corporation;
                                                                    • Principal exchange upon which sold, if listed on an 
                                                                      exchange; and
  Does the agreement designate an agent to act for                  • Nine-digit CUSIP number (defined later).
  the parties to the agreement in all dealings with the 
  IRS on matters arising under section 2032A?                       Bonds. For bonds, indicate:
                                                                    • Quantity and denomination;
                                                                    • Name of obligor;
  Has the agreement been signed by the designated                     Date of maturity;
                                                                    •
  agent and does it give the address of the agent?                  • Interest rate;
                                                                    • Interest due date;
                                                                    • Principal exchange, if listed on an exchange; and
                                                                    • Nine-digit CUSIP number.
Schedule B—Stocks and Bonds                                          If the stock or bond is unlisted, show the company's 
        If any assets to which the special rule of Regulations      principal business office.
!       section 20.2010-2(a)(7)(ii) applies are reported on          If the gross estate includes any interest in a trust, 
CAUTION this schedule, do not enter any value in the last three 
                                                                    partnership, or closely held entity, provide the EIN of the 
columns. See the instructions for Part 5—Recapitulation, item       entity in the description column on Schedules B, E, F, G, M, 
10, for information on how to estimate and report the value of      and O. You must also provide the EIN of an estate (if any) in 
these assets.                                                       the description column on the above-noted schedules, where 
                                                                    applicable.
        Before completing Schedule B, see the examples 
TIP     illustrating the alternate valuation dates being            CUSIP number.   The CUSIP (Committee on Uniform 
        adopted and not being adopted, later.                       Security Identification Procedures) number is a nine-digit 
                                                                    number that is assigned to all stocks and bonds traded on 
If the total gross estate contains any stocks or bonds, you         major exchanges and many unlisted securities. Usually, the 
must complete Schedule B and file it with the return.               CUSIP number is printed on the face of the stock certificate. 
On Schedule B, list the stocks and bonds included in the            If you do not have a stock certificate, the CUSIP may be 
decedent's gross estate. Number each item in the left-hand          found on the broker's or custodian's statement or by 
column.                                                             contacting the company's transfer agent.

Note. Unless specifically exempted by an estate tax                 Valuation
provision of the Code, bonds that are exempt from federal           List the FMV of the stocks or bonds. The FMV of a stock or 
income tax are not exempt from estate tax. You should list          bond (whether listed or unlisted) is the mean between the 
these bonds on Schedule B.                                          highest and lowest selling prices quoted on the valuation 
Public housing bonds includible in the gross estate must            date. If only the closing selling prices are available, then the 
be included at their full value.                                    FMV is the mean between the quoted closing selling price on 
                                                                    the valuation date and on the trading day before the valuation 
If you paid any estate, inheritance, legacy, or succession          date.
tax to a foreign country on any stocks or bonds included in 
this schedule, group those stocks and bonds together and             If there were no sales on the valuation date, figure the 
label them “Subjected to Foreign Death Taxes.”                      FMV as follows.
List interest and dividends on each stock or bond on a              1. Find the mean between the highest and lowest selling 
separate line.                                                        prices on the nearest trading date before and the nearest 
                                                                      trading date after the valuation date. Both trading dates 
Indicate as a separate item dividends that have not been              must be reasonably close to the valuation date.
collected at death and are payable to the decedent or the 
estate because the decedent was a stockholder of record on          2. Prorate the difference between the mean prices to the 
the date of death. However, if the stock is being traded on an        valuation date.
exchange and is selling ex-dividend on the date of the              3. Add or subtract (whichever applies) the prorated part of 
decedent's death, do not include the amount of the dividend           the difference to or from the mean price figured for the 
as a separate item. Instead, add it to the ex-dividend                nearest trading date before the valuation date.
quotation in determining the FMV of the stock on the date of 
the decedent's death. Dividends declared on shares of stock          If no actual sales were made reasonably close to the 
before the death of the decedent but payable to stockholders        valuation date, make the same computation using the mean 
of record on a date after the decedent's death are not              between the bona fide bid and asked prices instead of sales 
includible in the gross estate for federal estate tax purposes      prices. If actual sales prices or bona fide bid and asked 
and should not be listed here.                                      prices are available within a reasonable period of time before 
                                                                    the valuation date but not after the valuation date, or vice 
Description                                                         versa, use the mean between the highest and lowest sales 
                                                                    prices or bid and asked prices as the FMV.
Stocks. For stocks, indicate:
• Number of shares;                                                  For example, assume that sales of stock nearest the 
• Whether common or preferred;                                      valuation date (June 15) occurred 2 trading days before 

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Schedule B Examples
       Example showing use of Schedule B where the alternate valuation is not adopted; date of death, January 1, 2023.
Item   Description, including face amount of bonds or number of shares and par value              Unit value    Alternate     Alternate      Value at 
number where needed for identification. Give CUSIP number. If trust, partnership, or                            valuation     value          date of 
                                      closely held entity, give EIN.                                            date                         death
                                                                                  CUSIP number or 
                                                                                       EIN, where 
                                                                                       applicable
1      $60,000—Arkansas Railroad Co. first mortgage 4%, 20-year 
       bonds, due 2024. Interest payable quarterly on Feb. 1, May 1, 
       Aug. 1, and Nov. 1; N.Y. Exchange      . . . . . . . . . . . . . . . . .   XXXXXXXXX       100           - - - - - - - $- - - - - - - $ 60,000
       Interest coupons attached to bonds, item 1, due and payable on 
       Nov. 1, 2022, but not cashed at date of death . . . . . . . . . . .                        - - - - - - - - - - - - - - - - - - - - -  600
       Interest accrued on item 1, from Nov. 1, 2022, to Jan. 1, 
       2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 - - - - - - - - - - - - - - - - - - - - -  400
2      500 shares Public Service Corp., common; N.Y. Exchange               . .   XXXXXXXXX       110           - - - - - - - - - - - - - -  55,000
       Dividend on item 2 of $2 per share declared Dec. 10, 2022, 
       payable on Jan. 9, 2023, to holders of record on Dec. 30, 
       2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 - - - - - - - - - - - - - - - - - - - - -  1,000

            Example showing use of Schedule B where the alternate valuation is adopted; date of death, January 1, 2023.
Item   Description, including face amount of bonds or number of shares and par value              Unit value    Alternate     Alternate      Value at 
number where needed for identification. Give CUSIP number. If trust, partnership, or                            valuation     value          date of 
                                      closely held entity, give EIN.                                            date                         death
                                                                                  CUSIP number or 
                                                                                       EIN, where 
                                                                                       applicable
1      $60,000—Arkansas Railroad Co. first mortgage 4%, 20-year 
       bonds, due 2024. Interest payable quarterly on Feb. 1, May 1, 
       Aug. 1, and Nov. 1; N.Y. Exchange . . . . . . . . . . . . . . . . .        XXXXXXXXX       100           - - - - - -   $- - - - - -   $ 60,000
       $30,000 of item 1 distributed to legatees on Apr. 1, 2023 . . . .                          99            4/1/23        29,700         - - - - - - 
       $30,000 of item 1 sold by executor on May 1, 2023          . . . . . . .                   98            5/1/23        29,400         - - - - - - 
       Interest coupons attached to bonds, item 1, due and payable on 
       Nov. 1, 2022, but not cashed at date of death. Cashed by executor 
       on Feb. 2, 2023  . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   - - - - - -   2/2/23        600            600
       Interest accrued on item 1, from Nov. 1, 2022, to Jan. 1, 2023. 
       Cashed by executor on Feb. 2, 2023 . . . . . . . . . . . . . . . .                         - - - - - -   2/2/23        400            400
2      500 shares Public Service Corp., common; N.Y. Exchange             . . .   XXXXXXXXX       110           - - - - - -   - - - - - -    55,000
       Not disposed of within 6 months following death . . . . . . . . .                          90            7/1/23        45,000         - - - - - - 
       Dividend on item 2 of $2 per share declared Dec. 10, 2022, paid 
       on Jan. 9, 2023, to holders of record on Dec. 30, 2022         . . . . .                   - - - - - -   1/9/23        1,000          1,000

(June 13) and 3 trading days after (June 18). On those days,                      dividends paid for each of the 5 years immediately before the 
the mean sale prices per share were $10 and $15,                                  valuation date.
respectively. Therefore, the price of $12 is considered the                            Securities reported as of no value, of nominal value, or 
FMV of a share of stock on the valuation date. If, however, on                    obsolete should be listed last. Include the address of the 
June 13 and 18, the mean sale prices per share were $15                           company and the state and date of incorporation. Attach 
and $10, respectively, the FMV of a share of stock on the                         copies of correspondence or statements used to determine 
valuation date is $13.                                                            the “no value.”
If only closing prices for bonds are available, see                                    If the security was listed on more than one stock 
Regulations section 20.2031-2(b).                                                 exchange, use either the records of the exchange where the 
                                                                                  security is principally traded or the composite listing of 
Apply the rules in the section 2031 regulations to                                combined exchanges, if available, in a publication of general 
determine the value of inactive stock and stock in close                          circulation. In valuing listed stocks and bonds, you should 
corporations. Attach to Schedule B complete financial and                         carefully check accurate records to obtain values for the 
other data used to determine value, including balance sheets                      applicable valuation date.
(particularly the one nearest to the valuation date) and 
                                                                                       If you get quotations from brokers, or evidence of the sale 
statements of the net earnings or operating results and 
                                                                                  of securities from the officers of the issuing companies, 

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attach to the schedule copies of the letters furnishing these       • Interest rate.
quotations or evidence of sale.
                                                                    Cash in possession. For cash on hand, list such cash 
                                                                    separately from bank deposits.
Schedule C—Mortgages, Notes, and 
                                                                    Cash in financial organizations.  For cash in banks, 
Cash                                                                savings and loan associations, and other types of financial 
                                                                    organizations, list:
        If any assets to which the special rule of Regulations        Name and address of each financial organization;
                                                                    •
!       section 20.2010-2(a)(7)(ii) applies are reported on         • Amount in each account;
CAUTION this schedule, do not enter any value in the last three 
columns. See the instructions for Part 5—Recapitulation, item       • Serial or account number;
10, for information on how to estimate and report the value of      • Nature of account—checking, savings, time deposit, etc.; 
                                                                      and
these assets.                                                         Unpaid interest accrued from date of last interest 
                                                                    •
Complete Schedule C and file it with your return if the total         payment to the date of death.
gross estate contains any:
• Mortgages,                                                        Note.    If you obtain statements from the financial 
• Notes, or                                                         organizations, keep them for IRS inspection.
• Cash.
List on Schedule C:                                                 Schedule D—Insurance on the 
• Mortgages and notes payable to the decedent at the                Decedent's Life
  time of death, and
• Cash the decedent had at the date of death.                                If any assets to which the special rule of Regulations 
                                                                             section 20.2010-2(a)(7)(ii) applies are reported on 
Note. Do not list mortgages and notes payable by the                CAUTION! this schedule, do not enter any value in the last three 
decedent on Schedule C. (If these are deductible, list them         columns. See the instructions for Part 5—Recapitulation, item 
on Schedule K.)                                                     10, for information on how to estimate and report the value of 
                                                                    these assets.
Schedule C reporting order.      List the items on Schedule C 
in the following order.                                              If you are required to file Form 706 and there was any 
                                                                    insurance on the decedent's life, whether or not included in 
1. Mortgages.
                                                                    the gross estate, you must complete Schedule D and file it 
2. Promissory notes.                                                with the return.
3. Contracts by decedent to sell land.                              Insurance you must include on Schedule D.         Under 
                                                                    section 2042, you must include in the gross estate:
4. Cash in possession.                                              • Insurance on the decedent's life receivable by or for the 
5. Cash in banks, savings and loan associations, and other            benefit of the estate; and
  types of financial organizations.                                 • Insurance on the decedent's life receivable by 
                                                                      beneficiaries other than the estate, as described below.
Description                                                          The term “insurance” refers to life insurance of every 
Mortgages. For mortgages, list:                                     description, including death benefits paid by fraternal 
                                                                    beneficiary societies operating under the lodge system, and 
• Face value,
                                                                    death benefits paid under no-fault automobile insurance 
• Unpaid balance,
                                                                    policies if the no-fault insurer was unconditionally bound to 
• Date of mortgage,
                                                                    pay the benefit in the event of the insured's death.
• Name of maker,
• Property mortgaged,                                               Insurance in favor of the estate. Include on Schedule D 
• Date of maturity,                                                 the full amount of the proceeds of insurance on the life of the 
• Interest rate, and                                                decedent receivable by the executor or otherwise payable to 
• Interest date.                                                    or for the benefit of the estate. Insurance in favor of the estate 
Mortgage description example.       “Bond and mortgage of           includes insurance used to pay the estate tax, and any other 
$50,000, unpaid balance: $17,000; dated: January 1, 1992;           taxes, debts, or charges that are enforceable against the 
J. Doe to R. Roe; premises: 22 Clinton Street, Newark, NJ;          estate. The manner in which the policy is drawn is immaterial 
due: January 1, 2023; interest payable at 10% a                     as long as there is an obligation, legally binding on the 
year—January 1 and July 1.”                                         beneficiary, to use the proceeds to pay taxes, debts, or 
                                                                    charges. You must include the full amount even though the 
Promissory notes.   For promissory notes, list in the same          premiums or other consideration may have been paid by a 
way as mortgages.                                                   person other than the decedent.
Contracts by the decedent to sell land.  For contracts by           Insurance receivable by beneficiaries other than the es-
the decedent to sell land, list:                                    tate. Include on Schedule D the proceeds of all insurance on 
• Name of purchaser,                                                the life of the decedent not receivable by, or for the benefit of, 
• Contract date,                                                    the decedent's estate if the decedent possessed at death 
• Property description,                                             any of the following incidents of ownership, exercisable either 
• Sale price,                                                       alone or in conjunction with any person or entity.
• Initial payment,                                                   Incidents of ownership in a policy include the following.
• Amounts of installment payment,                                     The right of the insured or estate to its economic benefits.
                                                                    •
• Unpaid balance of principal, and

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• The power to change the beneficiary.                                  Do not list on this schedule property that the decedent 
• The power to surrender or cancel the policy.                     held as a tenant in common, but report the value of the 
• The power to assign the policy or to revoke an                   interest on Schedule A if real estate, or on the appropriate 
  assignment.                                                      schedule if personal property. Similarly, community property 
• The power to pledge the policy for a loan.                       held by the decedent and spouse should be reported on the 
• The power to obtain from the insurer a loan against the          appropriate Schedules A through I. The decedent's interest in 
  surrender value of the policy.                                   a partnership should not be entered on this schedule unless 
• A reversionary interest if the value of the reversionary         the partnership interest itself is jointly owned. Solely owned 
  interest was more than 5% of the value of the policy             partnership interests should be reported on Schedule F.
  immediately before the decedent died. (An interest in an 
                                                                   Part 1. Qualified joint interests held by decedent and 
  insurance policy is considered a reversionary interest if, 
                                                                   spouse. Under section 2040(b)(2), a joint interest is a 
  for example, the proceeds become payable to the 
                                                                   qualified joint interest if the decedent and the surviving 
  insured's estate or payable as the insured directs if the 
                                                                   spouse held the interest as:
  beneficiary dies before the insured.)
                                                                        • Tenants by the entirety, or
Life insurance not includible in the gross estate under                 • Joint tenants with right of survivorship if the decedent 
section 2042 may be includible under some other section of                and the decedent's spouse are the only joint tenants.
the Code. For example, a life insurance policy could be 
                                                                        Interests that meet either of the two requirements above 
transferred by the decedent in such a way that it would be 
                                                                   should be entered in Part 1. Joint interests that do not meet 
includible in the gross estate under section 2036, 2037, or 
                                                                   either of the two requirements above should be entered in 
2038. See the instructions for Schedule G for a description of 
                                                                   Part 2.
these sections.
                                                                        Under “Description,” describe the property as required in 
Completing the Schedule                                            the instructions for Schedules A, B, C, and F for the type of 
You must list every insurance policy on the life of the            property involved. For example, jointly held stocks and bonds 
decedent, whether or not it is included in the gross estate.       should be described using the rules given in the instructions 
                                                                   for Schedule B.
Under “Description,” list:                                              Under “Alternate value” and “Value at date of death,” enter 
• The name of the insurance company, and                           the full value of the property.
• The number of the policy.
For every life insurance policy listed on the schedule,            Note.  You cannot claim the special treatment under section 
request a statement on Form 712 from the company that              2040(b) for property held jointly by a decedent and a 
issued the policy. Attach the Form 712 to Schedule D.              surviving spouse who is not a U.S. citizen. Report these joint 
                                                                   interests on Part 2 of Schedule E, not Part 1.
Note. If the insurance company that issued the policy will not     Part 2. All other joint interests. All joint interests that were 
provide Form 712, you should attach evidence that verifies         not entered in Part 1 must be entered in Part 2.
the amount includible on Schedule D, including but not 
                                                                        For each item of property, enter the appropriate letter A, B, 
limited to an attachment, rider, assignment, copy of insurance 
                                                                   C, etc., from line 2a to indicate the name and address of the 
proceeds check, and other relevant material.
                                                                   surviving co-tenant.
If the policy proceeds are paid in one sum, enter the net               Under “Description,” describe the property as required in 
proceeds received (from Form 712, line 24) in the value (and       the instructions for Schedules A, B, C, and F for the type of 
alternate value) columns of Schedule D. If the policy              property involved.
proceeds are not paid in one sum, enter the value of the 
                                                                        In the “Percentage includible” column, enter the 
proceeds as of the date of the decedent's death (from Form 
                                                                   percentage of the total value of the property included in the 
712, line 25).
                                                                   gross estate.
If part or all of the policy proceeds are not included in the           Generally, you must include the full value of the jointly 
gross estate, explain why they were not included.                  owned property in the gross estate. However, the full value 
                                                                   should not be included if you can show that a part of the 
Schedule E—Jointly Owned Property                                  property originally belonged to the other tenant(s) and was 
                                                                   never received or acquired by the other tenant(s) from the 
        If any assets to which the special rule of Regulations     decedent for less than adequate and full consideration in 
!       section 20.2010-2(a)(7)(ii) applies are reported on        money or money's worth. Full value of jointly owned property 
CAUTION this schedule, do not enter any value in the last three    also does not have to be included in the gross estate if you 
columns. See the instructions for Part 5—Recapitulation, item      can show that any part of the property was acquired with 
10, for information on how to estimate and report the value of     consideration originally belonging to the surviving joint 
these assets.                                                      tenant(s). In this case, you may exclude from the value of the 
If you are required to file Form 706, complete Schedule E          property an amount proportionate to the consideration 
and file it with the return if the decedent owned any joint        furnished by the other tenant(s). Relinquishing or promising 
property at the time of death, whether or not the decedent's       to relinquish dower, curtesy, or statutory estate created 
interest is includible in the gross estate.                        instead of dower or curtesy, or other marital rights in the 
                                                                   decedent's property or estate is not consideration in money 
Enter on this schedule all property of whatever kind or            or money's worth. See the Schedule A instructions for the 
character, whether real estate, personal property, or bank         value to show for real property that is subject to a mortgage.
accounts, in which the decedent held at the time of death an            If the property was acquired by the decedent and another 
interest either as a joint tenant with right to survivorship or as person or persons by gift, bequest, devise, or inheritance as 
a tenant by the entirety.

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joint tenants, and their interests are not otherwise specified       policy exceeds its replacement cost), the true economic 
by law, include only that part of the value of the property that     value of the policy will be greater than the amount shown on 
is figured by dividing the full value of the property by the         Form 712, line 59. In these situations, report the full 
number of joint tenants.                                             economic value of the policy on Schedule F. See Rev. Rul. 
If you believe that less than the full value of the entire           78-137, 1978-1 C.B. 280, for details.
property is includible in the gross estate for tax purposes, you     Interests. If the decedent owned any interest in a 
must establish the right to include the smaller value by             partnership or unincorporated business, attach a statement 
attaching proof of the extent, origin, and nature of the             of assets and liabilities for the valuation date and for the 5 
decedent's interest and the interest(s) of the decedent's            years before the valuation date. Also, attach statements of 
co-tenant(s).                                                        the net earnings for the same 5 years. Be sure to include the 
In the “Includible alternate value” and “Includible value at         EIN of the entity. You must account for goodwill in the 
date of death” columns, enter only the values that you believe       valuation. In general, furnish the same information and follow 
are includible in the gross estate.                                  the methods used to value close corporations. See the 
                                                                     instructions for Schedule B.
Schedule F—Other Miscellaneous                                         All partnership interests should be reported on Schedule F 
                                                                     unless the partnership interest is jointly owned. Jointly owned 
Property                                                             partnership interests should be reported on Schedule E.
        If any assets to which the special rule of Regulations         If real estate is owned by a sole proprietorship, it should be 
                                                                     reported on Schedule F and not on Schedule A. Describe the 
CAUTION this schedule, do not enter any value in the last three 
!       section 20.2010-2(a)(7)(ii) applies are reported on          real estate with the same detail required for Schedule A.
columns. See the instructions for Part 5—Recapitulation, item        Valuation discounts.       If you answered “Yes” to Part 
10, for information on how to estimate and report the value of       4—General Information, line 11b, for any interest in a 
these assets.                                                        partnership, an unincorporated business, an LLC, or stock in 
                                                                     a closely held corporation, attach a statement that lists the 
You must complete Schedule F and file it with the re-                item number from Schedule F and identifies the total effective 
turn. On Schedule F, list all items that must be included in         discount taken (that is, XX.XX%) on such interest.
the gross estate that are not reported on any other schedule, 
including:                                                           Example of effective discount:
• Debts due the decedent (other than notes and 
  mortgages included on Schedule C);                                 a Pro-rata value of LLC (before any discounts)            $100.00
• Interests in business;
• Any interest in an Archer medical savings account (MSA)            b Minus: 10% discounts for lack of control                (10.00)
  or health savings account (HSA), unless such interest              c Marketable minority interest value (as if freely traded 
  passes to the surviving spouse;                                      minority interest value)                                $90.00
• Insurance on the life of another (obtain and attach Form           d Minus: 15% discount for lack of marketability           (13.50)
  712, for each policy) (see Note below);
• Section 2044 property (see Decedent Who Was a                      e Nonmarketable minority interest value                   $76.50
  Surviving Spouse, later);
• Claims (including the value of the decedent's interest in a        Calculation of effective discount:
  claim for refund of income taxes or the amount of the 
  refund actually received);
                                                                     (  minus  ) divided by   = effective discounta e a
• Rights;
• Digital assets are any digital representations of value that       ($100.00 - $76.50) ÷ $100.00 = 23.50%
  are recorded on a cryptographically secured distributed 
  ledger or any similar technology. For example, digital             Note. The amount of discounts are based on the factors 
  assets include non-fungible tokens (NFTs) and virtual              pertaining to a specific interest and those discounts shown in 
  currencies, such as cryptocurrencies and stablecoins. If           the example are for demonstration purposes only.
  a particular asset has the characteristics of a digital              If you answered “Yes” to Part 4—General Information, 
  asset, it will be treated as a digital asset for federal           line 11b, for any transfer(s) described in (1) through (5) in the 
  transfer tax purposes;                                             Schedule G instructions (and made by the decedent), attach 
• Royalties;                                                         a statement to Schedule G which lists the item number 
• Leaseholds;                                                        from that schedule and identifies the total effective discount 
• Judgments;                                                         taken (that is, XX.XX%) on such transfer(s).
• Reversionary or remainder interests;
• Shares in trust funds (attach a copy of the trust                  Line 1. If the decedent owned at the date of death works of 
  instrument);                                                       art or items with collectible value (for example, jewelry, furs, 
• Household goods and personal effects, including                    silverware, books, statuary, vases, oriental rugs, coin or 
  wearing apparel;                                                   stamp collections), check the “Yes” box on line 1 and provide 
• Farm products and growing crops;                                   full details. If any item or collection of similar items is valued 
• Livestock;                                                         at more than $3,000, attach an appraisal by an expert under 
• Farm machinery; and                                                oath and the required statement regarding the appraiser's 
• Automobiles.                                                       qualifications (see Regulations section 20.2031-6(b)).

Note (for single premium or paid-up policies). In certain 
situations (for example, where the surrender value of the 

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Decedent Who Was a Surviving Spouse                                           For example, if the decedent died on July 10, 2023, 
If the decedent was a surviving spouse, the decedent may                      you should examine gift tax returns for 2023, 2022, 2021, 
have received qualified terminable interest property (QTIP)                   and 2020. However, the gift taxes on the 2020 return that 
from the predeceased spouse for which the marital deduction                   are attributable to gifts made on or before July 10, 2020, 
was elected either on the predeceased spouse's estate tax                     are not included in the gross estate.
return or on a gift tax return, Form 709. The election is                     Explain how you figured the includible gift taxes if the 
available for transfers made and decedents dying after                        entire gift taxes shown on any Form 709 filed for gifts 
December 31, 1981. List such property on Schedule F.                          made within 3 years of death are not included in the 
                                                                              gross estate. Also attach copies of any relevant gift tax 
If this election was made and the surviving spouse                            returns filed by the decedent's spouse, with "Exhibit to 
retained interest in the QTIP property at death, the full value               Estate Tax Return" entered across the top of the first 
of the QTIP property is includible in the estate, even though                 page of each, for gifts made within 3 years of death.
the qualifying income interest terminated at death. It is valued 
as of the date of the surviving spouse's death, or alternate               2. Other transfers within 3 years of death (section 
valuation date, if applicable. Do not reduce the value by any                 2035(a)). These transfers include only the following.
annual exclusion that may have applied to the transfer                        • Any transfer by the decedent with respect to a life 
creating the interest.                                                          insurance policy within 3 years of death.
The value of such property included in the surviving                          • Any transfer within 3 years of death of a retained 
spouse's gross estate is treated as passing from the                            section 2036 life estate, section 2037 reversionary 
surviving spouse. It therefore qualifies for the charitable and                 interest, or section 2038 power to revoke, etc., if the 
marital deductions on the surviving spouse's estate tax return                  property subject to the life estate, interest, or power 
if it meets the other requirements for those deductions.                        would have been included in the gross estate had 
                                                                                the decedent continued to possess the life estate, 
For additional details, see Regulations section 20.2044-1.                      interest, or power until death.
                                                                              These transfers are reported on Schedule G, 
Schedule G—Transfers During                                                   regardless of whether a gift tax return was required to be 
                                                                              filed for them when they were made. However, the 
Decedent's Life                                                               amount includible and the information required to be 
        If any assets to which the special rule of Regulations                shown for the transfers are determined:
                                                                              • For insurance on the life of the decedent using the 
!       section 20.2010-2(a)(7)(ii) applies are reported on                     instructions for Schedule D (attach Form 712);
CAUTION this schedule, do not enter any value in the last three 
columns. See the instructions for Part 5—Recapitulation, item                 • For insurance on the life of another using the 
10, for information on how to estimate and report the value of                  instructions for Schedule F (attach Form 712); and
these assets.                                                                 • For sections 2036, 2037, and 2038 transfers, using 
                                                                                paragraphs (3), (4), and (5) of these instructions.
Complete Schedule G and file it with the return if the 
decedent made any of the transfers described in (1) through                3. Transfers with retained life estate (section 2036).
(5) later, or if you answered “Yes” to question 12 or 13a of                  These are transfers by the decedent in which the 
Part 4—General Information.                                                   decedent retained an interest in the transferred property. 
                                                                              The transfer can be in trust or otherwise, but excludes 
Report the following types of transfers on this schedule.                     bona fide sales for adequate and full consideration.
                                                                              Interests or rights. Section 2036 applies to the 
IF. . .               AND . . .              THEN . . .                       following retained interests or rights.
the decedent made a   at the time of the     for purposes of                  • The right to income from the transferred property.
transfer from a trust transfer, the transfer sections 2035 and                • The right to the possession or enjoyment of the 
                      was from a portion of  2038, treat the transfer           property.
                      the trust that was     as made directly by the          • The right, either alone or with any person, to 
                      owned by the grantor   decedent. Any such                 designate the persons who shall receive the income 
                      under section 676      transfer within the                from, possess, or enjoy, the property.
                      (other than by reason  annual gift tax 
                      of section 672(e)) by  exclusion is not                 Retained annuity, unitrust, and other income 
                      reason of a power in   includible in the gross          interests in trusts. If a decedent transferred property 
                      the grantor            estate.                          into a trust and retained or reserved the right to use the 
                                                                              property, or the right to an annuity, unitrust, or other 
                                                                              interest in such trust for the property for the decedent's 
1. Certain gift taxes (section 2035(b)). Enter on item A                      life, any period not ascertainable without reference to the 
   of Schedule G the total value of the gift taxes that were                  decedent's death, or for a period that does not, in fact, 
   paid by the decedent or the estate on gifts made by the                    end before the decedent's death, then the decedent's 
   decedent or the decedent's spouse within 3 years of                        right to use the property or the retained annuity, unitrust, 
   death.                                                                     or other interest (whether payable from income and/or 
                                                                              principal) is the retention of the possession or enjoyment 
        The date of the gift, not the date of payment of the gift             of, or the right to the income from, the property for 
   tax, determines whether a gift tax paid is included in the                 purposes of section 2036. See Regulations section 
   gross estate under this rule. Therefore, you should                        20.2036-1(c)(2).
   carefully examine the Forms 709 filed by the decedent 
   and the decedent's spouse to determine what part of the                    Retained voting rights. Transfers with a retained life 
   total gift taxes reported on them was attributable to gifts                estate also include transfers of stock in a controlled 
   made within 3 years of death.                                              corporation made after June 22, 1976, if the decedent 

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   retained or acquired voting rights in the stock. If the           (and regardless of whether that person had a substantial 
   decedent retained direct or indirect voting rights in a           adverse interest in the transferred property).
   controlled corporation, the decedent is considered to             The capacity in which the decedent could use a 
   have retained enjoyment of the transferred property. A            power has no bearing. If the decedent gave property in 
   corporation is a controlled corporation if the decedent           trust and was the trustee with the power to revoke the 
   owned (actually or constructively) or had the right (either       trust, the property would be included in the decedent’s 
   alone or with any other person) to vote at least 20% of           gross estate. For transfers or additions to an irrevocable 
   the total combined voting power of all classes of stock.          trust after October 28, 1979, the transferred property is 
   See section 2036(b)(2). If these voting rights ceased or          includible if the decedent reserved the power to remove 
   were relinquished within 3 years of the decedent's death,         the trustee at will and appoint another trustee.
   the corporate interests are included in the gross estate 
   as if the decedent had actually retained the voting rights        If the decedent relinquished within 3 years of death 
   until death.                                                      any of the includible powers described above, figure the 
                                                                     gross estate as if the decedent had actually retained the 
   The amount includible in the gross estate is the value            powers until death.
   of the transferred property at the time of the decedent's 
   death. If the decedent kept or reserved an interest or            Only the part of the transferred property that is subject 
   right to only a part of the transferred property, the amount      to the decedent's power is included in the gross estate.
   includible in the gross estate is a corresponding part of         For more detailed information on which transfers are 
   the entire value of the property.                                 includible in the gross estate, see Regulations section 
   A retained life estate does not have to be legally                20.2038-1.
   enforceable. What matters is that a substantial economic 
                                                                   Special Valuation Rules for Certain Lifetime 
   benefit was retained. For example, if a parent transferred 
   the home title to one’s child, but with the informal            Transfers
   understanding that the parent was to continue living            Sections 2701 through 2704 provide rules for valuing certain 
   there until the parent’s death, the value of the home           transfers to family members.
   would be includible in the parent’s estate even if the 
   agreement would not have been legally enforceable.              Section 2701 deals with the transfer of an interest in a 
                                                                   corporation or partnership while retaining certain distribution 
4. Transfers taking effect at death (section 2037). A              rights, or a liquidation, put, call, or conversion right.
   transfer that takes effect at the decedent's death is one 
   under which possession or enjoyment can be obtained             Section 2702 deals with the transfer of an interest in a trust 
   only by surviving the decedent. A transfer is not treated       while retaining any interest other than a qualified interest. In 
   as one that takes effect at the decedent's death unless         general, a qualified interest is a right to receive certain 
   the decedent retained a reversionary interest (defined          distributions from the trust at least annually, or a 
   later) in the property that immediately before the              noncontingent remainder interest if all of the other interests in 
   decedent's death had a value of more than 5% of the             the trust are distribution rights specified in section 2702.
   value of the transferred property. If the transfer was made 
                                                                   Section 2703 provides rules for the valuation of property 
   before October 8, 1949, the reversionary interest must 
                                                                   transferred to a family member but subject to an option, 
   have arisen by the express terms of the instrument of 
                                                                   agreement, or other right to acquire or use the property at 
   transfer.
                                                                   less than FMV. It also applies to transfers subject to 
   A reversionary interest is, generally, any right under          restrictions on the right to sell or use the property.
   which the transferred property will or may be returned to 
   the decedent or the decedent's estate. It also includes         Finally, section 2704 provides that in certain cases, the 
   the possibility that the transferred property may become        lapse of a voting or liquidation right in a family-owned 
   subject to a power of disposition by the decedent. It does      corporation or partnership will result in a deemed transfer.
   not matter if the right arises by the express terms of the 
   instrument of transfer or by operation of law. For this         These rules have potential consequences for the valuation 
   purpose, reversionary interest does not include the             of property in an estate. If the decedent (or any member of 
   possibility that the income alone from the property may         the decedent’s family) was involved in any such transactions, 
   return to the decedent or become subject to the                 see sections 2701 through 2704 and the related regulations 
   decedent's power of disposition.                                for additional details.

5. Revocable transfers (section 2038). The gross estate            How To Complete Schedule G
   includes the value of any transferred property which was        All transfers (other than outright transfers not in trust and 
   subject to the decedent's power to alter, amend, revoke,        bona fide sales) made by the decedent at any time during life 
   or terminate the transfer at the time of the decedent's         must be reported on Schedule G, regardless of whether you 
   death. A decedent's power to change beneficiaries and           believe the transfers are subject to tax. If the decedent made 
   to increase any beneficiary's enjoyment of the property         any transfers not described in these instructions, the 
   are examples of this.                                           transfers should not be shown on Schedule G. Instead, 
   It does not matter whether the power was reserved at            attach a statement describing these transfers by listing:
   the time of the transfer, whether it arose by operation of      • The date of the transfer,
   law, or whether it was later created or conferred. The rule     • The amount or value of the transferred property, and
   applies regardless of the source from which the power           • The type of transfer.
   was acquired, and regardless of whether the power was 
   exercisable by the decedent alone or with any person            Complete the schedule for each transfer that is included in 
                                                                   the gross estate under sections 2035(a), 2036, 2037, and 
                                                                   2038, as described in the instructions for Schedule G.

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  In the “Item number” column, number each transfer               decedent. It does not include a power created or held on 
consecutively beginning with “1.” In the “Description” column,    property transferred by the decedent.
list the name of the transferee and the date of the transfer, 
and give a complete description of the property. Transfers            A power of appointment includes all powers which are, in 
included in the gross estate should be valued on the date of      substance and effect, powers of appointment regardless of 
the decedent's death or, if alternate valuation is elected,       how they are identified and regardless of local property laws. 
according to section 2032.                                        For example, if a settlor transfers property in trust for the life 
                                                                  of the settlor’s spouse, with a power in the spouse to 
  If only part of the property transferred meets the terms of     appropriate or consume the principal of the trust, the spouse 
section 2035(a), 2036, 2037, or 2038, then only a                 has a power of appointment.
corresponding part of the value of the property should be 
                                                                      Some powers do not in themselves constitute a power of 
included in the value of the gross estate. If the transferee 
                                                                  appointment. For example, a power to amend only 
makes additions or improvements to the property, the 
                                                                  administrative provisions of a trust that cannot substantially 
increased value of the property at the valuation date should 
                                                                  affect the beneficial enjoyment of the trust property or income 
not be included on Schedule G. However, if only a part of the 
                                                                  is not a power of appointment. A power to manage, invest, or 
value of the property is included, enter the value of the whole 
                                                                  control assets, or to allocate receipts and disbursements, 
under the column headed “Description” and explain what part 
                                                                  when exercised only in a fiduciary capacity, is not a power of 
was included.
                                                                  appointment.
Attachments. If a transfer, by trust or otherwise, was made 
                                                                  General power of appointment.         A general power of 
by a written instrument, attach a copy of the instrument to 
                                                                  appointment is a power that is exercisable in favor of the 
Schedule G. If the copy of the instrument is of public record, it 
                                                                  decedent, the decedent's estate, the decedent's creditors, or 
should be certified; if not of public record, the copy should be 
                                                                  the creditors of the decedent's estate, except the following.
verified.
                                                                      1. A power to consume, invade, or appropriate property for 
                                                                      the benefit of the decedent that is limited by an 
Schedule H—Powers of Appointment
                                                                      ascertainable standard relating to health, education, 
         If any assets to which the special rule of Regulations       support, or maintenance of the decedent.
  !      section 20.2010-2(a)(7)(ii) applies are reported on          2. A power exercisable by the decedent only in conjunction 
CAUTION  this schedule, do not enter any value in the last three 
                                                                      with:
columns. See the instructions for Part 5—Recapitulation, item 
10, for information on how to estimate and report the value of        a. The creator of the power; or
these assets.
                                                                      b. A person who has a substantial interest in the 
  Complete Schedule H and file it with the return if you              property subject to the power, which is adverse to the 
answered “Yes” to question 14 of Part 4—General                       exercise of the power in favor of the decedent.
Information.
                                                                      A part of a power is considered a general power of 
  On Schedule H, include the following in the gross estate.       appointment if the power:
• The value of property for which the decedent possessed              1. May only be exercised by the decedent in conjunction 
  a general power of appointment (defined later) on the               with another person, and
  date of the decedent’s death.
• The value of property for which the decedent possessed              2. Is also exercisable in favor of the other person (in 
  a general power of appointment that the decedent                    addition to being exercisable in favor of the decedent, 
  exercised or released before death by disposing of it in            the decedent's creditors, the decedent's estate, or the 
  such a way that if it were a transfer of property owned by          creditors of the decedent's estate).
  the decedent, the property would be includible in the 
  decedent's gross estate as a transfer with a retained life          When there is a partial power, figure the amount included 
  estate, a transfer taking effect at death, or a revocable       in the gross estate by dividing the value of the property by the 
  transfer.                                                       number of persons (including the decedent) in favor of whom 
                                                                  the power is exercisable.
  With the above exceptions, property subject to a power of       Date power was created.      Generally, a power of 
appointment is not includible in the gross estate if the          appointment created by will is considered created on the 
decedent released the power completely and the decedent           date of the testator's death.
held no interest in or control over the property.
                                                                      A power of appointment created by an inter vivos 
  If the failure to exercise a general power of appointment       instrument is considered created on the date the instrument 
results in a lapse of the power, the lapse is treated as a        takes effect. If the holder of a power exercises it by creating a 
release only to the extent that the value of the property that    second power, the second power is considered as created at 
could have been appointed by the exercise of the lapsed           the time of the exercise of the first.
power is more than the greater of $5,000 or 5% of the total 
value, at the time of the lapse, of the assets out of which, or   Attachments
the proceeds of which, the exercise of the lapsed power           If the decedent ever possessed a power of appointment, 
could have been satisfied.                                        attach a certified or verified copy of the instrument granting 
                                                                  the power and a certified or verified copy of any instrument by 
Powers of Appointment                                             which the power was exercised or released. You must file 
A power of appointment determines who will own or enjoy the       these copies even if you contend that the power was not a 
property subject to the power and when they will own or enjoy     general power of appointment, and that the property is not 
it. The power must be created by someone other than the           otherwise includible in the gross estate.

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                                                                     that part of the value of the annuity receivable by the 
Schedule I—Annuities                                                 surviving beneficiary that the decedent's contribution to the 
                                                                     purchase price of the annuity or agreement bears to the total 
        If any assets to which the special rule of Regulations       purchase price.
!       section 20.2010-2(a)(7)(ii) applies are reported on 
CAUTION this schedule, do not enter any value in the last three      For example, if the value of the survivor's annuity was 
columns. See the instructions for Part 5—Recapitulation, item        $20,000 and the decedent had contributed 75% of the 
10, for information on how to estimate and report the value of       purchase price of the contract, the amount includible is 
these assets.                                                        $15,000 (75% (0.75) × $20,000).
Complete Schedule l and file it with the return if you               Except as provided under Annuities Under Approved 
answered “Yes” to question 16 of Part 4—General                      Plans, later, contributions made by the decedent's employer 
Information.                                                         to the purchase price of the contract or agreement are 
Enter on Schedule I every annuity that meets all of the              considered made by the decedent if they were made by the 
conditions under General, later, and every annuity described         employer because of the decedent's employment. For more 
in paragraphs (a) through (h) of Annuities Under Approved            information, see section 2039(b).
Plans, later, even if the annuities are wholly or partially 
excluded from the gross estate.                                      Definitions
For a discussion regarding the QTIP treatment of certain             Annuity. An annuity consists of one or more payments 
joint and survivor annuities, see the Schedule M, line 3,            extending over any period of time. The payments may be 
instructions.                                                        equal or unequal, conditional or unconditional, periodic or 
                                                                     sporadic.
General                                                              Examples.   The following are examples of contracts (but 
These rules apply to all types of annuities, including pension       not necessarily the only forms of contracts) for annuities that 
plans, individual retirement arrangements (IRAs), purchased          must be included in the gross estate.
commercial annuities, and private annuities.
                                                                     1. A contract under which the decedent immediately before 
In general, you must include in the gross estate all or part         death was receiving or was entitled to receive, for the 
of the value of any annuity that meets the following                 duration of life, an annuity with payments to continue 
requirements.                                                        after death to a designated beneficiary, if surviving the 
•   It is receivable by a beneficiary following the death of the     decedent.
    decedent and by reason of surviving the decedent.
•   The annuity is under a contract or agreement entered             2. A contract under which the decedent immediately before 
    into after March 3, 1931.                                        death was receiving or was entitled to receive, together 
•   The annuity was payable to the decedent (or the                  with another person, an annuity payable to the decedent 
    decedent possessed the right to receive the annuity)             and the other person for their joint lives, with payments to 
    either alone or in conjunction with another, for the             continue to the survivor following the death of either.
    decedent's life or for any period not ascertainable without      3. A contract or agreement entered into by the decedent 
    reference to the decedent's death or for any period that         and employer under which the decedent immediately 
    did not in fact end before the decedent's death.                 before death and following retirement was receiving, or 
•   The contract or agreement is not a policy of insurance on        was entitled to receive, an annuity payable to the 
    the life of the decedent.                                        decedent for life. After the decedent's death, if survived 
                                                                     by a designated beneficiary, the annuity was payable to 
Note. A private annuity is an annuity issued by a party not          the beneficiary with payments either fixed by contract or 
engaged in the business of writing annuity contracts, typically      subject to an option or election exercised or exercisable 
a junior generation family member or a family trust.                 by the decedent. However, see Annuities Under 
An annuity contract that provides periodic payments to a             Approved Plans, later.
person for life and ceases at the person's death is not              4. A contract or agreement entered into by the decedent 
includible in the gross estate. Social security benefits are not     and the decedent's employer under which at the 
includible in the gross estate even if the surviving spouse          decedent's death, before retirement, or before the 
receives benefits.                                                   expiration of a stated period of time, an annuity was 
An annuity or other payment that is not includible in the            payable to a designated beneficiary, if surviving the 
decedent's or the survivor's gross estate as an annuity may          decedent. However, see Annuities Under Approved 
still be includible under some other applicable provision of         Plans, later.
the law. For example, see Powers of Appointment and the              5. A contract or agreement under which the decedent 
instructions for Schedule G—Transfers During Decedent's              immediately before death was receiving, or was entitled 
Life, earlier. See also Regulations section 20.2039-1(e).            to receive, an annuity for a stated period of time, with the 
If the decedent retired before January 1, 1985, see                  annuity to continue to a designated beneficiary, surviving 
Annuities Under Approved Plans, later, for rules that allow the      the decedent, upon the decedent's death and before the 
exclusion of part or all of certain annuities.                       expiration of that period of time.
                                                                     6. An annuity contract or other arrangement providing for a 
Part Includible                                                      series of substantially equal periodic payments to be 
                                                                     made to a beneficiary for life or over a period of at least 
If the decedent contributed only part of the purchase price of       36 months after the date of the decedent's death under 
the contract or agreement, include in the gross estate only          an individual retirement account, annuity, or bond as 

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  described in section 2039(e) (before its repeal by P.L.           e. A bond purchase plan described in section 405 (before 
  98-369).                                                     its repeal by P.L. 98-369, effective for obligations issued after 
                                                               December 31, 1983).
Payable to the decedent. An annuity or other payment was            Exclusion rules for pension, etc., plans. If an annuity 
payable to the decedent if, at the time of death, the decedent under an approved plan described in (a) through (e) above is 
was in fact receiving an annuity or other payment, with or     receivable by a beneficiary other than the executor and the 
without an enforceable right to have the payments continued.   decedent made no contributions under the plan toward the 
Right to receive an annuity.   The decedent had the right to   cost, no part of the value of the annuity, subject to the 
receive an annuity or other payment if, immediately before     $100,000 limitation (if applicable), is includible in the gross 
death, the decedent had an enforceable right to receive        estate.
payments at some time in the future, whether or not at the          If the decedent made a contribution under a plan 
time of death the decedent had a present right to receive      described in (a) through (e) above toward the cost, include in 
payments.                                                      the gross estate on this schedule that proportion of the value 
                                                               of the annuity which the amount of the decedent's 
Annuities Under Approved Plans                                 contribution under the plan bears to the total amount of all 
The following rules relate to whether part or all of an        contributions under the plan. The remaining value of the 
otherwise includible annuity may be excluded. These rules      annuity is excludable from the gross estate subject to the 
have been repealed and apply only if the decedent either:      $100,000 limitation (if applicable). For the rules to determine 
• On December 31, 1984, was both a participant in the          whether the decedent made contributions to the plan, see 
  plan and in pay status (for example, had received at least   Regulations section 20.2039-1(c).
  one benefit payment on or before December 31, 1984)          IRAs and retirement bonds. The following plans are 
  and had irrevocably elected the form of the benefit before   approved plans for the exclusion rules.
  July 18, 1984; or
• Had separated from service before January 1, 1985, and            f. An individual retirement account described in section 
  did not change the form of benefit before death.             408(a).
                                                                    g. An individual retirement annuity described in section 
The amount excluded cannot exceed $100,000 unless              408(b).
either of the following conditions is met.
• On December 31, 1982, the decedent was both a                     h. A retirement bond described in section 409(a) (before 
  participant in the plan and in pay status (for example, had  its repeal by P.L. 98-369).
  received at least one benefit payment on or before                Exclusion rules for IRAs and retirement bonds.        These 
  December 31, 1982) and the decedent irrevocably              plans are approved plans only if they provide for a series of 
  elected the form of the benefit before January 1, 1983.      substantially equal periodic payments made to a beneficiary 
• The decedent separated from service before January 1,        for life, or over a period of at least 36 months after the date of 
  1983, and did not change the form of benefit before          the decedent's death.
  death.                                                            Subject to the $100,000 limitation (if applicable), if an 
                                                               annuity under a “plan” described in (f) through (h) above is 
Approved Plans                                                 receivable by a beneficiary other than the executor, the entire 
                                                               value of the annuity is excludable from the gross estate even 
Approved plans may be separated into two categories.           if the decedent made a contribution under the plan.
• Pension, profit-sharing, stock bonus, and other similar           However, if any payment to or for an account or annuity 
  plans.                                                       described in paragraph (f), (g), or (h) earlier was not 
• IRAs and retirement bonds.                                   allowable as an income tax deduction under section 219 (and 
                                                               was not a rollover contribution, as described in section 
Different exclusion rules apply to the two categories of       2039(e) before its repeal by P.L. 98-369), include in the gross 
plans.                                                         estate on this schedule that proportion of the value of the 
Pension, etc., plans. The following plans are approved         annuity which the amount not allowable as a deduction under 
plans for the exclusion rules.                                 section 219 and not a rollover contribution bears to the total 
                                                               amount paid to or for such account or annuity. For more 
a. An employees' trust (or a contract purchased by an          information, see Regulations section 20.2039-5.
employees' trust) forming part of a pension, stock bonus, or 
profit-sharing plan that met all the requirements of section   Rules applicable to all approved plans. The following 
401(a), either at the time of the decedent's separation from   rules apply to all approved plans described in paragraphs (a) 
employment (whether by death or otherwise) or at the time of   through (h), earlier.
the termination of the plan (if earlier).                           If any part of an annuity under a “plan” described in (a) 
b. A retirement annuity contract purchased by the              through (h), earlier, is receivable by the executor, it is 
employer (but not by an employees' trust) under a plan that,   generally includible in the gross estate to the extent that it is 
at the time of the decedent's separation from employment (by   receivable by the executor in that capacity. In general, the 
death or otherwise), or at the time of the termination of the  annuity is receivable by the executor if it is to be paid to the 
plan (if earlier), was a plan described in section 403(a).     executor or if there is an agreement (expressed or implied) 
c. A retirement annuity contract purchased for an              that it will be applied by the beneficiary for the benefit of the 
employee by an employer that is an organization referred to    estate (such as in discharge of the estate's liability for death 
in section 170(b)(1)(A)(ii) or (vi), or that is a religious    taxes or debts of the decedent, etc.) or that its distribution will 
organization (other than a trust), and that is exempt from tax be governed to any extent by the terms of the decedent's will 
under section 501(a).                                          or the laws of descent and distribution.
d. Chapter 73 of title 10 of the United States Code.

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If data available to you does not indicate whether the plan               IF . . .                                THEN . . .
satisfies the requirements of section 401(a), 403(a), 408(a), 
408(b), or 409(a), you may obtain that information from the               an annuity under an individual          state the ratio of the amount paid 
IRS office where the employer's principal place of business is            retirement account or annuity           for the individual retirement 
located.                                                                  became payable to any beneficiary       account or annuity that was not 
                                                                          because that beneficiary survived       allowable as an income tax 
Line A. Lump-Sum Distribution Election                                    the decedent and is payable to the      deduction under section 219 (other 
                                                                          beneficiary for life or for at least 36 than a rollover contribution) to the 
Note.    The following rules have been repealed and apply only            months following the decedent's         total amount paid for the account or 
if the decedent:                                                          death                                   annuity.
• On December 31, 1984, was both a participant in the 
  plan and in pay status (for example, had received at least              the annuity is payable out of a trust   the description should be 
  one benefit payment on or before December 31, 1984)                     or other fund                           sufficiently complete to fully identify 
  and had irrevocably elected the form of the benefit before                                                      it.
  July 18, 1984; or
• Had separated from service before January 1, 1985, and                  the annuity is payable for a term of    include the duration of the term and 
  did not change the form of benefit before death.                        years                                   the date on which it began.
Generally, the entire amount of any lump-sum distribution 
is included in the decedent's gross estate. However, under                the annuity is payable for the life of  include the date of birth of that 
                                                                          a person other than the decedent        person.
this special rule, all or part of a lump-sum distribution from a 
qualified (approved) plan will be excluded if the lump-sum 
distribution is included in the recipient's income for income             the annuity is wholly or partially      enter the amount excluded under 
tax purposes.                                                             excluded from the gross estate          “Description” and explain how you 
                                                                                                                  figured the exclusion.
If the decedent was born before 1936, the recipient may 
be eligible to elect special “10-year averaging” rules (under 
repealed section 402(e)) and capital gain treatment (under 
repealed section 402(a)(2)) in figuring the income tax on the 
distribution. For more information, see Pub. 575, Pension and             Schedule J—Funeral Expenses and 
Annuity Income. If this option is available, the estate tax               Expenses Incurred in Administering 
exclusion cannot be claimed unless the recipient elects to 
forego the “10-year averaging” and capital gain treatment in              Property Subject to Claims
figuring the income tax on the distribution. The recipient                         Use Schedule PC to make a protective claim for 
elects to forego this treatment by treating the distribution as           !        refund for expenses which are not currently 
taxable on the recipient’s income tax return, as described in             CAUTION  deductible under section 2053. For such a claim, 
Regulations section 20.2039-4(d). The election is                         report the expense on Schedule J but without a value in the 
irrevocable.                                                              last column.
The amount excluded from the gross estate is the portion 
attributable to the employer contributions. The portion, if any,          General. Complete and file Schedule J if you claim a 
attributable to the employee-decedent's contributions is                  deduction on item 14 of Part 5—Recapitulation.
always includible. Also, you may not figure the gross estate in           On Schedule J, itemize funeral expenses and expenses 
accordance with this election unless you check “Yes” on line              incurred in administering property subject to claims. List the 
A and attach the names, addresses, and identifying numbers                names and addresses of persons to whom the expenses are 
of the recipients of the lump-sum distributions. See                      payable and describe the nature of the expense. Do not list 
Regulations section 20.2039-4(d)(2).                                      expenses incurred in administering property not 
                                                                          subject to claims on this schedule. List them on 
How To Complete Schedule I                                                Schedule L instead.
In describing an annuity, give the name and address of the                The deduction is limited to the amount paid for these 
grantor of the annuity. Specify if the annuity is under an                expenses that is allowable under local law but may not 
approved plan.                                                            exceed:
IF . . .                           THEN . . .                             1. The value of property subject to claims included in the 
the annuity is under an approved   state the ratio of the decedent's      gross estate, plus
plan                               contribution to the total purchase 
                                   price of the annuity.                  2. The amount paid out of property included in the gross 
                                                                          estate but not subject to claims. This amount must 
the decedent was employed at the   state the ratio of the decedent's      actually be paid by the due date of the estate tax return.
time of death and an annuity as    contribution to the total purchase     The applicable local law under which the estate is being 
described earlier in Definitions,  price of the annuity.                  administered determines which property is and is not subject 
Annuity, Example 4 became 
payable to any beneficiary because                                        to claims. If under local law a particular property interest 
the beneficiary survived the                                              included in the gross estate would bear the burden for the 
decedent                                                                  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), you cannot 
                                                                          deduct expenses incurred in administering property subject 

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to claims on both the estate tax return and the estate's        Interest expense. Interest expenses incurred after the 
income tax return. If you choose to deduct them on the estate   decedent's death are generally allowed as a deduction if they 
tax return, you cannot deduct them on a Form 1041, U.S.         are reasonable, necessary to the administration of the estate, 
Income Tax Return for Estates and Trusts, filed for the estate. and allowable under local law.
Funeral expenses are only deductible on the estate tax 
return.                                                              Interest incurred as the result of a federal estate tax 
                                                                deficiency is a deductible administrative expense. Penalties 
Funeral expenses. Itemize funeral expenses on line A.           on estate tax deficiencies are not deductible even if they are 
Deduct from the expenses any amounts that were                  allowable under local law.
reimbursed, such as death benefits payable by the SSA or 
the Veterans Administration.                                    Note.   If you elect to pay the tax in installments under section 
                                                                6166, you may not deduct the interest payable on the 
Executors' commissions. When you file the return, you 
                                                                installments.
may deduct commissions that have actually been paid to you 
or that you expect will be paid. Do not deduct commissions if   Miscellaneous expenses.   Miscellaneous administration 
none will be collected. If the amount of the commissions has    expenses necessarily incurred in preserving and distributing 
not been fixed by decree of the proper court, the deduction     the estate are deductible. These expenses include 
will be allowed on the final examination of the return,         appraiser's and accountant's fees, certain court costs, and 
provided that:                                                  costs of storing or maintaining assets of the estate.
• The Chief, Estate and Gift/Excise Tax Examination, is              The expenses of selling assets are deductible only if the 
  reasonably satisfied that the commissions claimed will be     sale is necessary to pay the decedent's debts, the expenses 
  paid;                                                         of administration, or taxes, or to preserve the estate or carry 
• The amount entered as a deduction is within the amount        out distribution.
  allowable by the laws of the jurisdiction where the estate 
  is being administered; and
• It is in accordance with the usually accepted practice in     Schedule K—Debts of the Decedent, 
  that jurisdiction for estates of similar size and character.  and Mortgages and Liens
If you have not been paid the commissions claimed at the 
                                                                        Use Schedule PC to make a protective claim for 
time of the final examination of the return, you must support 
                                                                        refund for expenses which are not currently 
the amount you deducted with an affidavit or statement          CAUTION!
                                                                        deductible under section 2053. For such a claim, 
signed under the penalties of perjury that the amount has 
                                                                report the expense on Schedule K but without a value in the 
been agreed upon and will be paid.
                                                                last column.
You may not deduct a bequest or devise made to you 
instead of commissions. If, however, the decedent fixed by           You must complete and attach Schedule K if you claimed 
will the compensation payable to you for services to be         deductions on either item 15 or item 16 of Part 
rendered in the administration of the estate, you may deduct    5—Recapitulation.
this amount to the extent it is not more than the               Income vs. estate tax deduction. Taxes, interest, and 
compensation allowable by the local law or practice.            business expenses accrued at the date of the decedent's 
Do not deduct on this schedule amounts paid as trustees'        death are deductible both on Schedule K and as deductions 
commissions whether received by you acting in the capacity      in respect of the decedent on the income tax return of the 
of a trustee or by a separate trustee. If such amounts were     estate.
paid in administering property not subject to claims, deduct         If you choose to deduct medical expenses of the decedent 
them on Schedule L.                                             only on the estate tax return, they are fully deductible as 
                                                                claims against the estate. If, however, they are claimed on the 
Note. Executors' commissions are taxable income to the          decedent's final income tax return under section 213(c), they 
executors. Therefore, be sure to include them as income on      may also not be claimed on the estate tax return. In this case, 
your individual income tax return.                              you may also not deduct on the estate tax return any 
Attorney fees. Enter the amount of attorney fees that have      amounts that were not deductible on the income tax return 
actually been paid or that you reasonably expect to be paid.    because of the percentage limitations.
If, on the final examination of the return, the fees claimed 
have not been awarded by the proper court and paid, the         Debts of the Decedent
deduction will be allowed, provided the Chief, Estate and Gift/ List under Debts of the Decedent only valid debts the 
Excise Tax Examination, is reasonably satisfied that the        decedent owed at the time of death. List any indebtedness 
amount claimed will be paid and that it does not exceed a       secured by a mortgage or other lien on property of the gross 
reasonable payment for the services performed, taking into      estate under Mortgages and Liens. If the amount of the debt 
account the size and character of the estate and the local law  is disputed or the subject of litigation, deduct only the amount 
and practice. If the fees claimed have not been paid at the     the estate concedes to be a valid claim.
time of final examination of the return, the amount deducted 
must be supported by an affidavit, or statement signed under         Generally, if the claim against the estate is based on a 
penalties of perjury, by the executor or the attorney stating   promise or agreement, the deduction is limited to the extent 
that the amount has been agreed upon and will be paid.          that the liability was contracted bona fide and for an adequate 
                                                                and full consideration in money or money's worth. However, 
Do not deduct attorney fees incidental to litigation incurred   any enforceable claim based on a promise or agreement of 
by the beneficiaries. These expenses are charged against        the decedent to make a contribution or gift (such as a pledge 
the beneficiaries personally and are not administration         or a subscription) to or for the use of a charitable, public, 
expenses authorized by the Code.                                religious, etc., organization is deductible to the extent that the 

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deduction would be allowed as a bequest under the statute           However, if the decedent's estate is not liable, include in 
that applies.                                                       the gross estate only the value of the equity of redemption (or 
Certain claims of a former spouse against the estate                the value of the property less the amount of the debt), and do 
based on the relinquishment of marital rights are deductible        not deduct any portion of the indebtedness on this schedule.
on Schedule K. For these claims to be deductible, all of the        Notes and other obligations secured by the deposit of 
following conditions must be met.                                   collateral, such as stocks, bonds, etc., should also be listed 
• The decedent and the decedent's spouse must have                  under Mortgages and Liens.
  entered into a written agreement relative to their marital 
  and property rights.                                              Description
• The decedent and the spouse must have been divorced               Include under the “Description” column the particular 
  before the decedent's death and the divorce must have             schedule and item number where the property subject to the 
  occurred within the 3-year period beginning on the date 1         mortgage or lien is reported in the gross estate.
  year before the agreement was entered into. It is not 
  required that the agreement be approved by the divorce            Include the name and address of the mortgagee, payee, 
  decree.                                                           or obligee, and the date and term of the mortgage, note, or 
• The property or interest transferred under the agreement          other agreement by which the debt was established. Also 
  must be transferred to the decedent's spouse in                   include the face amount, the unpaid balance, the rate of 
  settlement of the spouse's marital rights.                        interest, and the date to which the interest was paid before 
You may not deduct a claim made against the estate by a             the decedent's death.
remainderman relating to section 2044 property. Section 
2044 property is described in the instructions for Part             Schedule L—Net Losses During 
4—General Information, line 7.
                                                                    Administration and Expenses 
Include in this schedule notes unsecured by mortgage or 
other lien and give full details, including:                        Incurred in Administering Property 
• Name of payee,                                                    Not Subject to Claims
• Face and unpaid balance,
• Date and term of note,                                                    Use Schedule PC to make a protective claim for 
• Interest rate, and                                                !       refund for expenses which are not currently 
• Date to which interest was paid before death.                     CAUTION deductible under section 2053. For such a claim, 
Include the exact nature of the claim as well as the name           report the expense on Schedule L but without a value in the 
of the creditor. If the claim is for services performed over a      last column.
period of time, state the period covered by the claim.              Complete Schedule L and file it with the return if you claim 
Example.      Electric Illuminating Co., for electric service       deductions on either item 19 or item 20 of Part 
during December 2022, $150.                                         5—Recapitulation.

If the amount of the claim is the unpaid balance due on a           Net Losses During Administration
contract for the purchase of any property included in the 
                                                                    You may deduct only those losses from thefts, fires, storms, 
gross estate, indicate the schedule and item number where 
                                                                    shipwrecks, or other casualties that occurred during the 
you reported the property. If the claim represents a joint and 
                                                                    settlement of the estate. Deduct only the amount not 
separate liability, give full facts and explain the financial 
                                                                    reimbursed by insurance or otherwise.
responsibility of the co-obligor.
Property and income taxes.       The deduction for property         Describe in detail the loss sustained and the cause. If you 
taxes is limited to the taxes accrued before the date of the        received insurance or other compensation for the loss, state 
decedent's death. Federal taxes on income received during           the amount collected. Identify the property for which you are 
the decedent's lifetime are deductible, but taxes on income         claiming the loss by indicating the schedule and item number 
received after death are not deductible.                            where the property is included in the gross estate.
Keep all vouchers or original records for inspection by the         If you elect alternate valuation, do not deduct the amount 
IRS.                                                                by which you reduced the value of an item to include it in the 
                                                                    gross estate.
Allowable death taxes. If you elect to take a deduction for 
foreign death taxes under section 2053(d) rather than a credit      Do not deduct losses claimed as a deduction on a federal 
under section 2014, the deduction is subject to the limitations     income tax return or depreciation in the value of securities or 
described in section 2053(d) and its regulations.                   other property.

Mortgages and Liens                                                 Expenses Incurred in Administering Property 
Under Mortgages and Liens, list only obligations secured by         Not Subject to Claims
mortgages or other liens on property included in the gross          You may deduct expenses incurred in administering property 
estate at its full value or at a value that was undiminished by     that is included in the gross estate but that is not subject to 
the amount of the mortgage or lien. If the debt is enforceable      claims. Only deduct these expenses if they were paid before 
against other property of the estate not subject to the             the section 6501 period of limitations for assessment expired.
mortgage or lien, or if the decedent was personally liable for 
the debt, include the full value of the property subject to the     The expenses deductible on this schedule are usually 
mortgage or lien in the gross estate under the appropriate          expenses incurred in the administration of a trust established 
schedule and deduct the mortgage or lien on the property on         by the decedent before death. They may also be incurred in 
this schedule.                                                      the collection of other assets or the transfer or clearance of 

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title to other property included in the decedent's gross estate                included in the gross estate. However, do not list any 
for estate tax purposes, but not included in the decedent's                    nondeductible terminable interests (described later) on 
probate estate.                                                                Schedule M unless you are making a QTIP election. The 
The expenses deductible on this schedule are limited to                        property for which you make this election must be included 
those that are the result of settling the decedent's interest in               on Schedule M. See Qualified terminable interest property, 
the property or of vesting good title to the property in the                   later.
beneficiaries. Expenses incurred on behalf of the transferees                      For the rules on common disaster and survival for a limited 
(except those described earlier) are not deductible.                           period, see section 2056(b)(3).
Examples of deductible and nondeductible expenses are 
provided in Regulations section 20.2053-8(d).                                      You may list on Schedule M only those interests that the 
                                                                               surviving spouse takes:
List the names and addresses of the persons to whom 
each expense was payable and the nature of the expense.                          1. As the decedent's legatee, devisee, heir, or donee;
Identify the property for which the expense was incurred by                      2. As the decedent's surviving tenant by the entirety or joint 
indicating the schedule and item number where the property                           tenant;
is included in the gross estate. If you do not know the exact 
amount of the expense, you may deduct an estimate,                               3. As an appointee under the decedent's exercise of a 
provided that the amount may be verified with reasonable                             power or as a taker in default at the decedent's 
certainty and will be paid before the period of limitations for                      nonexercise of a power;
assessment (referred to earlier) expires. Keep all vouchers 
                                                                                 4. As a beneficiary of insurance on the decedent's life;
and receipts for inspection by the IRS.
                                                                                 5. As the surviving spouse taking under dower or curtesy 
                                                                                     (or similar statutory interest); and
Schedule M—Bequests, etc., to 
                                                                                 6. As a transferee of a transfer made by the decedent at 
Surviving Spouse (Marital Deduction)                                                 any time.
        If any assets to which the special rule of Regulations 
!       section 20.2010-2(a)(7)(ii) applies are reported on                    Property Interests That You May Not List on 
CAUTION this schedule, do not enter any value in the last three 
columns. See the instructions for Part 5—Recapitulation, item                  Schedule M
23, for information on how to estimate and report the value of                 Do not list the following on Schedule M.
these assets.                                                                    1. The value of any property that does not pass from the 
                                                                                     decedent to the surviving spouse.
General
                                                                                 2. Property interests that are not included in the decedent's 
You must complete Schedule M and file it with the return if                          gross estate.
you claim a deduction on item 21 of Part 5—Recapitulation.
                                                                                 3. The full value of a property interest for which a deduction 
The marital deduction is authorized by section 2056 for 
                                                                                     was claimed on Schedules J through L. The value of the 
certain property interests that pass from the decedent to the 
                                                                                     property interest should be reduced by the deductions 
surviving spouse. You may claim the deduction only for 
                                                                                     claimed with respect to it.
property interests that are included in the decedent's gross 
estate (Schedules A through I).                                                  4. The full value of a property interest that passes to the 
                                                                                     surviving spouse subject to a mortgage or other 
Note. The marital deduction is generally not allowed if the                          encumbrance or an obligation of the surviving spouse. 
surviving spouse is not a U.S. citizen. The marital deduction                        Include on Schedule M only the net value of the interest 
is allowed for property passing to such a surviving spouse in                        after reducing it by the amount of the mortgage or other 
a QDOT or if such property is transferred or irrevocably                             debt.
assigned to such a trust before the estate tax return is filed. 
The executor must elect QDOT status on the return. See the                       5. Nondeductible terminable interests (described later).
instructions that follow for details on the election.                            6. Any property interest disclaimed by the surviving 
                                                                                     spouse.
Property Interests That You May List on 
Schedule M                                                                     Terminable Interests
Generally, you may list on Schedule M all property interests                   Certain interests in property passing from a decedent to a 
that pass from the decedent to the surviving spouse and are                    surviving spouse are referred to as terminable interests. 
Example—Listing Property Interests on Schedule M

Item                              Description of property interests passing to surviving spouse.                                             Amount
number          For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN.
        All other property:
B1      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, 1975 (Schedule E, Part 1, item 1)         . . . . . . . . . . . . . . . . . .   $182,500
B2      Proceeds of Metropolitan Life Insurance Company Policy No. 104729, payable in one sum to surviving spouse 
        (Schedule D, item 3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200,000
B3      Cash bequest under Paragraph Six of will . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     100,000

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These are interests that will terminate or fail after the passage    otherwise satisfied out of any of a group of assets are a 
of time, or on the occurrence or nonoccurrence of a                  bequest of the residue of the decedent's estate, or of a share 
designated event. Examples are life estates, annuities,              of the residue, and a cash legacy payable out of the general 
estates for terms of years, and patents.                             estate.
The ownership of a bond, note, or other contractual                  Example.  A decedent bequeathed $100,000 to the 
obligation, which when discharged would not have the effect          surviving spouse. The general estate includes a term for 
of an annuity for life or for a term, is not considered a            years (valued at $10,000 in determining the value of the 
terminable interest.                                                 gross estate) in an office building, which interest was retained 
                                                                     by the decedent under a deed of the building by gift to the 
Nondeductible terminable interests.      Unless you are 
                                                                     decedent’s child. Accordingly, the value of the specific 
making a QTIP election, do not enter a terminable interest on 
                                                                     bequest entered on Schedule M is $90,000.
Schedule M if:
                                                                     Life estate with power of appointment in the surviving 
1. Another interest in the same property passed from the 
                                                                     spouse. A property interest, whether or not in trust, will be 
decedent to some other person for less than adequate 
                                                                     treated as passing to the surviving spouse, and will not be 
and full consideration in money or money's worth; and
                                                                     treated as a nondeductible terminable interest if the following 
2. By reason of its passing, the other person or that                five conditions apply.
person's heirs may enjoy part of the property after the 
                                                                     1. The surviving spouse is entitled for life to all of the 
termination of the surviving spouse's interest.
                                                                     income from the entire interest.
This rule applies even though the interest that passes from          2. The income is payable annually or at more frequent 
the decedent to a person other than the surviving spouse is          intervals.
not included in the gross estate, and regardless of when the 
interest passes. The rule also applies regardless of whether         3. The surviving spouse has the power, exercisable in favor 
the surviving spouse's interest and the other person's interest      of the surviving spouse or the estate of the surviving 
pass from the decedent at the same time.                             spouse, to appoint the entire interest.
Property interests that are considered to pass to a person           4. The power is exercisable by the surviving spouse alone 
other than the surviving spouse are any property interest that       and (whether exercisable by will or during life) is 
(a) passes under a decedent's will or intestacy; (b) was             exercisable by the surviving spouse in all events.
transferred by a decedent during life; or (c) is held by or 
passed on to any person as a decedent's joint tenant, as             5. No part of the entire interest is subject to a power in any 
appointee under a decedent's exercise of a power, as taker in        other person to appoint any part to any person other than 
default at a decedent's release or nonexercise of a power, or        the surviving spouse (or the surviving spouse's legal 
as a beneficiary of insurance on the decedent's life. See            representative or relative if the surviving spouse is 
Regulations section 20.2056(c)-3.                                    disabled; see Regulations section 20.2056(b)-5(a) and 
                                                                     Rev. Rul. 85-35, 1985-1 C.B. 328).
For example, a spouse was devised real property for life, 
from the decedent, with remainder to the children. The life          If these five conditions are satisfied only for a specific 
interest that passed to the spouse does not qualify for the          portion of the entire interest, see Regulations sections 
marital deduction because it will terminate at the spouse’s          20.2056(b)-5(b) and -5(c) to determine the amount of the 
death and the children will thereafter possess or enjoy the          marital deduction.
property.                                                            Life insurance, endowment, or annuity payments, with 
However, if the decedent purchased a joint and survivor              power of appointment in surviving spouse. A property 
annuity for themselves and the spouse who survived them,             interest consisting of the entire proceeds under a life 
the value of the survivor's annuity, to the extent that it is        insurance, endowment, or annuity contract is treated as 
included in the gross estate, qualifies for the marital              passing from the decedent to the surviving spouse, and will 
deduction because even though the interest will terminate on         not be treated as a nondeductible terminable interest if the 
the spouse’s death, no one else will possess or enjoy any            following five conditions apply.
part of the property.
                                                                     1. The surviving spouse is entitled to receive the proceeds 
The marital deduction is not allowed for an interest that the        in installments, or is entitled to interest on them, with all 
decedent directed the executor or a trustee to convert, after        amounts payable during the life of the spouse, payable 
death, into a terminable interest for the surviving spouse. The      only to the surviving spouse.
marital deduction is not allowed for such an interest even if 
there was no interest in the property passing to another             2. The installment or interest payments are payable 
person and even if the terminable interest would otherwise           annually, or more frequently, beginning not later than 13 
have been deductible under the exceptions described later            months after the decedent's death.
for life estates, life insurance, and annuity payments with          3. The surviving spouse has the power, exercisable in favor 
powers of appointment. For more information, see                     of the surviving spouse or of the estate of the surviving 
Regulations section 20.2056(b)-1(f); and Regulations section         spouse, to appoint all amounts payable under the 
20.2056(b)-1(g), Example (7).                                        contract.
If any property interest passing from the decedent to the 
                                                                     4. The power of appointment is exercisable by the surviving 
surviving spouse may be paid or otherwise satisfied out of 
                                                                     spouse alone and (whether exercisable by will or during 
any of a group of assets, the value of the property interest is, 
                                                                     life) is exercisable by the surviving spouse in all events.
for the entry on Schedule M, reduced by the value of any 
asset or assets that, if passing from the decedent to the            5. No part of the amount payable under the contract is 
surviving spouse, would be nondeductible terminable                  subject to a power in any other person to appoint any 
interests. Examples of property interests that may be paid or        part to any person other than the surviving spouse.

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    If these five conditions are satisfied only for a specific      that the elective part will reflect its proportionate share of the 
portion of the proceeds, see Regulations section                    increase or decline in the whole of the property when 
20.2056(b)-6(b) to determine the amount of the marital              applying section 2044 or 2519. Thus, if the interest of the 
deduction.                                                          surviving spouse in a trust (or other property in which the 
                                                                    spouse has a qualified life estate) is qualified terminable 
Charitable remainder trusts.    An interest in a charitable 
                                                                    interest property, you may make an election for a part of the 
remainder trust will not be treated as a nondeductible 
                                                                    trust (or other property) only if the election relates to a 
terminable interest if:
                                                                    defined fraction or percentage of the entire trust (or other 
1. The interest in the trust passes from the decedent to the        property). The fraction or percentage may be defined by 
    surviving spouse, and                                           means of a formula.
2. The surviving spouse is the only beneficiary of the trust        Election to deduct qualified terminable interest proper-
    other than charitable organizations described in section        ty under section 2056(b)(7).  If a trust (or other property) 
    170(c).                                                         meets the requirements of qualified terminable interest 
                                                                    property under section 2056(b)(7), and
    A charitable remainder trust is either a charitable 
remainder annuity trust or a charitable remainder unitrust.              1. The trust or other property is listed on Schedule M, and
See section 664 for descriptions of these trusts.                        2. The value of the trust (or other property) is entered in 
                                                                         whole or in part as a deduction on Schedule M,
Election To Deduct Qualified Terminable Interest 
Property (QTIP)                                                     then unless the executor specifically identifies the trust (all or 
You may elect to claim a marital deduction for qualified            a fractional portion or percentage) or other property to be 
terminable interest property or property interests. You make        excluded from the election, the executor shall be deemed to 
the QTIP election simply by listing the qualified terminable        have made an election to have such trust (or other property) 
interest property on Part A of Schedule M and inserting its         treated as qualified terminable interest property under 
value. You are presumed to have made the QTIP election if           section 2056(b)(7).
you list the property and insert its value on Schedule M. If you         If less than the entire value of the trust (or other property) 
make this election, the surviving spouse's gross estate will        that the executor has included in the gross estate is entered 
include the value of the qualified terminable interest property.    as a deduction on Schedule M, the executor shall be 
See the instructions for Part 4—General Information, line 7,        considered to have made an election only as to a fraction of 
for more details. The election is irrevocable.                      the trust (or other property). The numerator of this fraction is 
                                                                    equal to the amount of the trust (or other property) deducted 
    If you file a Form 706 in which you do not make this            on Schedule M. The denominator is equal to the total value of 
election, you may not file an amended return to make the            the trust (or other property).
election unless you file the amended return on or before the 
due date for filing the original Form 706.                          Qualified Domestic Trust (QDOT) Election
    The effect of the election is that the property (interest) will The marital deduction is allowed for transfers to a surviving 
be treated as passing to the surviving spouse and will not be       spouse who is not a U.S. citizen only if the property passes to 
treated as a nondeductible terminable interest. All of the          the surviving spouse in a QDOT or if such property is 
other marital deduction requirements must still be satisfied        transferred or irrevocably assigned to a QDOT before the 
before you may make this election. For example, you may not         decedent's estate tax return is filed.
make this election for property or property interests that are 
not included in the decedent's gross estate.                             A QDOT is any trust:
Qualified terminable interest property.    Qualified                     1. That requires at least one trustee to be either a citizen of 
terminable interest property is property (a) that passes from            the United States or a domestic corporation,
the decedent, (b) in which the surviving spouse has a                    2. That requires that no distribution of corpus from the trust 
qualifying income interest for life, and (c) for which election          can be made unless such a trustee has the right to 
under section 2056(b)(7) has been made.                                  withhold from the distribution the tax imposed on the 
    The surviving spouse has a qualifying income interest for            QDOT,
life if the surviving spouse is entitled to all of the income from 
the property payable annually or at more frequent intervals, or          3. That meets the requirements of any applicable 
has a usufruct interest for life in the property, and during the         regulations, and
surviving spouse's lifetime no person has a power to appoint             4. For which the executor has made an election on the 
any part of the property to any person other than the                    estate tax return of the decedent.
surviving spouse. An annuity is treated as an income interest 
regardless of whether the property from which the annuity is        Note. For trusts created by an instrument executed before 
payable can be separately identified.                               November 5, 1990, items 1 and 2 above will be treated as 
    Regulations sections 20.2044-1 and 20.2056(b)-7(d)(3)           met if the trust instrument requires that all trustees be 
state that an interest in property is eligible for QTIP treatment   individuals who are citizens of the United States or domestic 
if the income interest is contingent upon the executor's            corporations.
election even if that portion of the property for which no               You make the QDOT election simply by listing the qualified 
election is made will pass to or for the benefit of beneficiaries   domestic trust or the entire value of the trust property on 
other than the surviving spouse.                                    Schedule M and deducting its value. You are presumed to 
    The QTIP election may be made for all or any part of            have made the QDOT election if you list the trust or trust 
qualified terminable interest property. A partial election must     property and insert its value on Schedule M. Once made, 
relate to a fractional or percentile share of the property so       the election is irrevocable.

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If an election is made to deduct qualified domestic trust            describe each item in detail. Describe the instrument 
property under section 2056A(d), provide the following               (including any clause or paragraph number) or provision of 
information for each qualified domestic trust on an                  law under which each item passed to the surviving spouse. 
attachment to this schedule.                                         Indicate the schedule and item number of each asset.
1. The name and address of every trustee.                            In listing otherwise nondeductible property for which you 
2. A description of each transfer passing from the decedent          are making a QTIP election, unless you specifically identify a 
     that is the source of the property to be placed in trust.       fractional portion of the trust or other property as not subject 
                                                                     to the election, the election will be considered made for the 
3. The EIN for the trust.                                            entire interest.
The election must be made for an entire QDOT trust. In 
listing a trust for which you are making a QDOT election,            Enter the value of each interest before taking into account 
unless you specifically identify the trust as not subject            the federal estate tax or any other death tax. The valuation 
to the election, the election will be considered made for            dates used in determining the value of the gross estate also 
the entire trust.                                                    apply on Schedule M.
The determination of whether a trust qualifies as a QDOT             If Schedule M includes a bequest of the residue or a part 
will be made as of the date the decedent's Form 706 is filed.        of the residue of the decedent's estate, attach a copy of the 
If, however, judicial proceedings are brought before the Form        computation showing how the value of the residue was 
706's due date (including extensions) to have the trust              determined. Include a statement showing the following.
revised to meet the QDOT requirements, then the                      • The value of all property that is included in the 
determination will not be made until the court-ordered                 decedent's gross estate (Schedules A through I) but is 
changes to the trust are made.                                         not a part of the decedent's probate estate, such as 
Election to deduct qualified domestic trust property un-               lifetime transfers, jointly owned property that passed to 
der section 2056A. If a trust meets the requirement of a               the survivor on the decedent's death, and the insurance 
QDOT under section 2056A(a), the return is filed no later              payable to specific beneficiaries.
than 1 year after the time prescribed by law (including              • The values of all specific and general legacies or 
extensions), and the entire value of the trust or trust property       devises, with reference to the applicable clause or 
is listed and entered as a deduction on Schedule M, then               paragraph of the decedent's will or codicil. (If legacies 
unless the executor specifically identifies the trust to be            are made to each member of a class, for example, 
excluded from the election, the executor shall be deemed to            $1,000 to each of the decedent's employees, only the 
have made an election to have the entire trust treated as              number in each class and the total value of property 
qualified domestic trust property.                                     received by them need be furnished.)
                                                                     • The dates of birth of all persons, the length of whose 
Note. For trusts with assets in excess of $2 million, see              lives may affect the value of the residuary interest 
Regulations section 20.2056A-2(d) for additional                       passing to the surviving spouse.
requirements to ensure collection of the section 2056A estate        • Any other important information such as that relating to 
tax.                                                                   any claim to any part of the estate not arising under the 
                                                                       will.
Line 1
                                                                     Lines 5a, 5b, and 5c. The total of the values listed on 
If property passes to the surviving spouse as the result of a        Schedule M must be reduced by the amount of the federal 
qualified disclaimer, check “Yes” and attach a copy of the           estate tax, the federal GST tax, and the amount of state or 
written disclaimer required by section 2518(b).                      other death and GST taxes paid out of the property interest 
                                                                     involved. If you enter an amount for state or other death or 
Line 3                                                               GST taxes on line 5b or 5c, identify the taxes and attach your 
Section 2056(b)(7)(C)(ii) creates an automatic QTIP election         computation of them.
for certain joint and survivor annuities that are includible in 
the estate under section 2039. To qualify, only the surviving        Attachments.    If you list property interests passing by the 
spouse can have the right to receive payments before the             decedent's will on Schedule M, attach a certified copy of the 
death of the surviving spouse.                                       order admitting the will to probate. If, when you file the return, 
                                                                     the court of probate jurisdiction has entered any decree 
The executor can elect out of QTIP treatment, however, by            interpreting the will or any of its provisions affecting any of the 
checking the “Yes” box on line 3. Once made, the election            interests listed on Schedule M, or has entered any order of 
is irrevocable. If there is more than one such joint and             distribution, attach a copy of the decree or order. In addition, 
survivor annuity, you are not required to make the election for      the IRS may request other evidence to support the marital 
all of them.                                                         deduction claimed.
If you make the election out of QTIP treatment by checking 
“Yes” on line 3, you cannot deduct the amount of the annuity 
                                                                     Schedule O—Charitable, Public, and 
on Schedule M. If you do not elect out, you must list the joint 
and survivor annuities on Schedule M.                                Similar Gifts and Bequests
Listing Property Interests on Schedule M                                     If any assets to which the special rule of Regulations 
                                                                             section 20.2010-2(a)(7)(ii) applies are reported on 
List each property interest included in the gross estate that        CAUTION!
                                                                             this schedule, do not enter any value in the last three 
passes from the decedent to the surviving spouse and for 
                                                                     columns. See the instructions for Part 5—Recapitulation, item 
which a marital deduction is claimed. This includes otherwise 
                                                                     23, for information on how to estimate and report the value of 
nondeductible terminable interest property for which you are 
                                                                     these assets.
making a QTIP election. Number each item in sequence and 

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General                                                           in part out of any bequest, legacy, or devise that would 
You must complete Schedule O and file it with the return if       otherwise be allowed as a charitable deduction, the amount 
you claim a deduction on item 22 of Part 5—Recapitulation.        you may deduct is the amount of the bequest, legacy, or 
                                                                  devise reduced by the total amount of the taxes.
You can claim the charitable deduction allowed under 
section 2055 for the value of property in the decedent's gross         If you elected to make installment payments of the estate 
estate that was transferred by the decedent during life or by     tax, and the interest is payable out of property transferred to 
will to or for the use of any of the following.                   charity, you must reduce the charitable deduction by an 
• The United States, a state, a political subdivision of a        estimate of the maximum amount of interest that will be paid 
  state, or the District of Columbia, for exclusively public      on the deferred tax.
  purposes.                                                            For split-interest trusts or pooled income funds, only the 
• Any corporation or association organized and operated           figure that is passing to the charity should be entered in the 
  exclusively for religious, charitable, scientific, literary, or “Amount” column. Do not enter the entire amount that passes 
  educational purposes, including the encouragement of            to the trust or fund.
  art, or to foster national or international amateur sports 
  competition (but only if none of its activities involve              If you are deducting the value of the residue or a part of 
  providing athletic facilities or equipment, unless the          the residue passing to charity under the decedent's will, 
  organization is a qualified amateur sports organization)        attach a copy of the computation showing how you 
  and the prevention of cruelty to children and animals. No       determined the value, including any reduction for the taxes 
  part of the net earnings may benefit any private individual     described earlier.
  and no substantial activity may be undertaken to carry on            Also include the following.
  propaganda, or otherwise attempt to influence legislation            • A statement that shows the values of all specific and 
  or participate in any political campaign on behalf of any              general legacies or devises for both charitable and 
  candidate for public office.                                           noncharitable uses. For each legacy or devise, indicate 
• A trustee or a fraternal society, order, or association                the paragraph or section of the decedent's will or codicil 
  operating under the lodge system, if the transferred                   that applies. If legacies are made to each member of a 
  property is to be used exclusively for religious, charitable,          class (for example, $1,000 to each of the decedent's 
  scientific, literary, or educational purposes, or for the              employees), show only the number of each class and the 
  prevention of cruelty to children or animals. No                       total value of property they received.
  substantial activity may be undertaken to carry on                   • The dates of birth of all life tenants or annuitants, the 
  propaganda or otherwise attempt to influence legislation,              length of whose lives may affect the value of the interest 
  or participate in any political campaign on behalf of any              passing to charity under the decedent's will.
  candidate for public office.                                         • A statement showing the value of all property that is 
• Any veterans organization incorporated by an Act of                    included in the decedent's gross estate but does not 
  Congress or any of its departments, local chapters, or                 pass under the will, such as transfers, jointly owned 
  posts, for which none of the net earnings benefits any                 property that passed to the survivor on the decedent's 
  private individual.                                                    death, and insurance payable to specific beneficiaries.
• Employee stock ownership plans, if the transfer qualifies            • Any agreements with charitable beneficiaries, whether 
  as a qualified gratuitous transfer of qualified employer               entered before or after the date of death of the decedent.
  securities within the meaning provided in section 664(g).            • Verification of the sale or purchase of property that is the 
For this purpose, certain Indian tribal governments are                  subject of a charitable deduction.
treated as states and transfers to them qualify as deductible          • Any other important information such as that relating to 
charitable contributions. See section 7871 and Rev. Proc.                any claim, not arising under the will, to any part of the 
2008-55, 2008-39 I.R.B. 768, available at Rev. Proc.                     estate (that is, a spouse claiming dower or curtesy, or 
2008-55, as modified and supplemented by subsequent                      similar rights).
revenue procedures, for a list of qualifying Indian tribal 
governments.                                                      Line 2. Qualified Disclaimer
You may also claim a charitable contribution deduction for        The charitable deduction is allowed for amounts that are 
a qualifying conservation easement granted after the              transferred to charitable organizations as a result of a 
decedent's death under the provisions of section 2031(c)(9).      qualified disclaimer. To be a qualified disclaimer, a refusal to 
                                                                  accept an interest in property must meet the conditions of 
The charitable deduction is allowed for amounts that are          section 2518. These are explained in Regulations sections 
transferred to charitable organizations as a result of either a   25.2518-1 through 25.2518-3. If property passes to a 
qualified disclaimer (see Line 2. Qualified Disclaimer, later) or charitable beneficiary as the result of a qualified disclaimer, 
the complete termination of a power to consume, invade, or        check the “Yes” box on line 2 and attach a copy of the written 
appropriate property for the benefit of an individual. It does    disclaimer required by section 2518(b).
not matter whether termination occurs because of the death 
of the individual or in any other way. The termination must       Attachments
occur within the period of time (including extensions) for filing If the charitable transfer was made by will, attach a certified 
the decedent's estate tax return and before the power has         copy of the order admitting the will to probate, in addition to 
been exercised.                                                   the copy of the will. If the charitable transfer was made by any 
The deduction is limited to the amount actually available         other written instrument, attach a copy. If the instrument is of 
for charitable uses. Therefore, if under the terms of a will or   record, the copy should be certified; if not, the copy should 
the provisions of local law, or for any other reason, the federal be verified.
estate tax, the federal GST tax, or any other estate, GST, 
succession, legacy, or inheritance tax is payable in whole or 

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Value                                                               Limitation Period
The valuation dates used in determining the value of the            The credit for foreign death taxes is limited to those taxes that 
gross estate also apply on Schedule O.                              were actually paid and for which a credit was claimed within 
                                                                    the later of 4 years after the filing of the estate tax return, 
                                                                    before the date of expiration of any extension of time for 
Schedule P—Credit for Foreign Death 
                                                                    payment of the federal estate tax, or 60 days after a final 
Taxes                                                               decision of the Tax Court on a timely filed petition for a 
                                                                    redetermination of a deficiency.
General
If you claim a credit on Part 2—Tax Computation, line 13,           Credit Under the Statute
complete Schedule P and file it with the return. Attach             For the credit allowed by the statute, the question of whether 
Form(s) 706-CE to Form 706 to support any credit you claim.         particular property is situated in the foreign country imposing 
                                                                    the tax is determined by the same principles that would apply 
If the foreign government refuses to certify Form 706-CE,           in determining whether similar property of a nonresident not a 
file it directly with the IRS as instructed on the Form 706-CE.     U.S. citizen is situated within the United States for purposes 
See Form 706-CE for instructions on how to complete the             of the federal estate tax. See the Instructions for Form 
form and a description of the items that must be attached to        706-NA.
the form when the foreign government refuses to certify it.
The credit for foreign death taxes is allowable only if the         Computation of Credit Under the Statute
decedent was a citizen or resident of the United States.            Item 1. Enter the amount of the estate, inheritance, legacy, 
However, see section 2053(d) and the related regulations for        and succession taxes paid to the foreign country and its 
exceptions and limitations if the executor has elected, in          possessions or political subdivisions, attributable to property 
certain cases, to deduct these taxes from the value of the          that is:
gross estate. For a resident not a citizen, who was a citizen or    • Situated in that country,
subject of a foreign country for which the President has            • Subjected to these taxes, and
issued a proclamation under section 2014(h), the credit is          • Included in the gross estate.
allowable only if the country of which the decedent was a 
national allows a similar credit to decedents who were U.S.         The amount entered on item 1 should not include any tax 
citizens residing in that country.                                  paid to the foreign country for property not situated in that 
                                                                    country and should not include any tax paid to the foreign 
The credit is authorized either by statute or by treaty. If a       country for property not included in the gross estate. If only a 
credit is authorized by a treaty, whichever of the following is     part of the property subjected to foreign taxes is both situated 
the most beneficial to the estate is allowed.                       in the foreign country and included in the gross estate, it will 
• The credit figured under the treaty.                              be necessary to determine the portion of the taxes 
• The credit figured under the statute.                             attributable to that part of the property. Also, attach the 
• The credit figured under the treaty, plus the credit figured      computation of the amount entered on item 1.
  under the statute for death taxes paid to each political 
  subdivision or possession of the treaty country that are          Item 2. Enter the value of the gross estate, less the total of 
  not directly or indirectly creditable under the treaty.           the deductions on items 21 and 22 of Part 5—Recapitulation.
                                                                    Item 3. Enter the value of the property situated in the foreign 
Under the statute, the credit is authorized for all death 
                                                                    country that is subjected to the foreign taxes and included in 
taxes (national and local) imposed in the foreign country. 
                                                                    the gross estate, less those portions of the deductions taken 
Whether local taxes are the basis for a credit under a treaty 
                                                                    on Schedules M and O that are attributable to the property.
depends upon the provisions of the particular treaty.
                                                                    Item 4. Subtract any credit claimed on line 15 for federal gift 
If a credit for death taxes paid in more than one foreign           taxes on pre-1977 gifts (section 2012) from line 12 of Part 
country is allowable, a separate computation of the credit          2—Tax Computation, and enter the balance on item 4 of 
must be made for each foreign country. The copies of                Schedule P.
Schedule P on which the additional computations are made 
should be attached to the copy of Schedule P provided in the        Credit Under Treaties
return.
                                                                    If you are reporting any items on this return based on the 
The total credit allowable for any property, whether                provisions of a death tax treaty, you may have to attach a 
subjected to tax by one or more than one foreign country, is        statement to this return disclosing the return position that is 
limited to the amount of the federal estate tax attributable to     treaty based. See Regulations section 301.6114-1 for details.
the property. The anticipated amount of the credit may be 
figured on the return, but the credit cannot finally be allowed     In general. If the provisions of a treaty apply to the estate of 
until the foreign tax has been paid and a Form 706-CE               a U.S. citizen or resident, a credit is authorized for payment of 
evidencing payment is filed. Section 2014(g) provides that for      the foreign death tax or taxes specified in the treaty. Treaties 
credits for foreign death taxes, each U.S. possession is            with death tax conventions are in effect with the following 
deemed a foreign country.                                           countries: Australia, Austria, Canada, Denmark, Finland, 
                                                                    France, Germany, Greece, Ireland, Italy, Japan, the 
Convert death taxes paid to the foreign country into U.S.           Netherlands, South Africa, Switzerland, and the United 
dollars by using the rate of exchange in effect at the time         Kingdom.
each payment of foreign tax is made.
If a credit is claimed for any foreign death tax that is later 
recovered, see Regulations section 20.2016-1 for the notice 
required within 30 days.

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A credit claimed under a treaty is in general figured on            Property
Schedule P in the same manner as the credit is figured under        The term “property” includes any interest (legal or equitable) 
the statute with the following principal exceptions.                of which the transferee received the beneficial ownership. 
• The situs rules contained in the treaty apply in                  The transferee is considered the beneficial owner of property 
  determining whether property was situated in the foreign          over which the transferee received a general power of 
  country.                                                          appointment. Property does not include interests to which the 
• The credit may be allowed only for payment of the death           transferee received only a bare legal title, such as that of a 
  tax or taxes specified in the treaty (but see the                 trustee. Neither does it include an interest in property over 
  instructions earlier for credit under the statute for death       which the transferee received a power of appointment that is 
  taxes paid to each political subdivision or possession of         not a general power of appointment. In addition to interests in 
  the treaty country that are not directly or indirectly            which the transferee received the complete ownership, the 
  creditable under the treaty).                                     credit may be allowed for annuities, life estates, terms for 
• If specifically provided, the credit is proportionately           years, remainder interests (whether contingent or vested), 
  shared for the tax applicable to property situated outside        and any other interest that is less than the complete 
  both countries, or that was deemed in some instances              ownership of the property, to the extent that the transferee 
  situated within both countries.                                   became the beneficial owner of the interest.
• The amount entered on item 4 of Schedule P is the 
  amount shown on line 12 of Part 2—Tax Computation,                Maximum Amount of the Credit
  less the total of the credits claimed for federal gift taxes 
  on pre-1977 gifts (section 2012) and for tax on prior             The maximum amount of the credit is the smaller of:
  transfers (line 14 of Part 2—Tax Computation). (If a credit            1. The amount of the estate tax of the transferor's estate 
  is claimed for tax on prior transfers, it will be necessary to         attributable to the transferred property, or
  complete Schedule Q before completing Schedule P.) 
  For examples of computations of credits under the                      2. The amount by which:
  treaties, see the applicable regulations.                              a. An estate tax on the transferee's estate determined 
                                                                          without the credit for tax on prior transfers exceeds
Note. For computation of credit, in cases where property is 
situated outside both countries or deemed situated within                b. An estate tax on the transferee's estate determined 
both countries, see the appropriate treaty for details.                   by excluding from the gross estate the net value of 
                                                                          the transfer.
Schedule Q—Credit for Tax on Prior                                  If credit for a particular foreign death tax may be taken under 
                                                                    either the statute or a death duty convention, and on this 
Transfers                                                           return the credit actually is taken under the convention, then 
                                                                    no credit for that foreign death tax may be taken into 
General                                                             consideration in figuring estate tax (2a) or estate tax (2b) 
Complete Schedule Q and file it with the return if you claim a      above.
credit on Part 2—Tax Computation, line 14.
The term “transferee” means the decedent for whose                  Percent Allowable
estate this return is filed. If the transferee received property    Where transferee predeceased the transferor.         If not 
from a transferor who died within 10 years before, or 2 years       more than 2 years elapsed between the dates of death, the 
after, the transferee, a credit is allowable on this return for all credit allowed is 100% of the maximum amount. If more than 
or part of the federal estate tax paid by the transferor's estate   2 years elapsed between the dates of death, no credit is 
for the transfer. There is no requirement that the property be      allowed.
identified in the estate of the transferee or that it exist on the 
date of the transferee's death. It is sufficient for the allowance  Where transferor predeceased the transferee.         The 
of the credit that the transfer of the property was subjected to    percent of the maximum amount that is allowed as a credit 
federal estate tax in the estate of the transferor and that the     depends on the number of years that elapsed between dates 
specified period of time has not elapsed. A credit may be           of death. It is determined using the following table.
allowed for property received as the result of the exercise or           Period of Time                              Percent 
nonexercise of a power of appointment when the property is               Exceeding      Not Exceeding                Allowable
included in the gross estate of the donee of the power.
                                                                          - - - - -             2 years                  100
If the transferee was the transferor's surviving spouse, no               2 years               4 years                  80
credit is allowed for property received from the transferor to            4 years               6 years                  60
the extent that a marital deduction was allowed to the                    6 years               8 years                  40
transferor's estate for the property. There is no credit for tax          8 years       10 years                         20
on prior transfers for federal gift taxes paid in connection with        10 years               - - - - -            none
the transfer of the property to the transferee.
If you are claiming a credit for tax on prior transfers on 
Form 706-NA, you should first complete and attach Part              How To Figure the Credit
5—Recapitulation from Form 706 before figuring the credit on        A worksheet for Schedule Q is provided to allow you to figure 
Schedule Q from Form 706.                                           the limits before completing Schedule Q. Transfer the 
Section 2056(d)(3) contains specific rules for allowing a           appropriate amounts from the worksheet to Schedule Q as 
credit for certain transfers to a spouse who was not a U.S.         indicated on the schedule. You do not need to file the 
citizen where the property passed outright to the spouse, or        worksheet with Form 706, but keep it for your records.
to a qualified domestic trust.

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Cases involving transfers from two or more transferors.               If the transferor's estate elected to pay the federal estate 
Part I of the worksheet and Schedule Q enable you to figure           tax in installments, enter on line 10 only the total of the 
the credit for as many as three transferors. The number of            installments that have actually been paid at the time you file 
transferors is irrelevant to Part II of the worksheet. If you are     this Form 706. See Rev. Rul. 83-15, 1983-1 C.B. 224, for 
figuring the credit for more than three transferors, use more         more details.
than one worksheet and Schedule Q, Part I, and combine the            Line 21. Add lines 11 (allowable applicable credit) and 13 
totals for the appropriate lines.                                     (foreign death taxes credit) of Part 2—Tax Computation to the 
Section 2032A additional tax.     If the transferor's estate          amount of any credit taken (on line 15) for federal gift taxes 
elected special-use valuation and the additional estate tax of        on pre-1977 gifts (section 2012). Subtract this total from Part 
section 2032A(c) was imposed at any time up to 2 years after          2—Tax Computation, line 8. Enter the result on line 21 of the 
the death of the decedent for whom you are filing this return,        worksheet.
check the box on Schedule Q. On lines 1 and 9 of the                  Line 26. If you figured the marital deduction using the 
worksheet, include the property subject to the additional             unlimited marital deduction in effect for decedents dying after 
estate tax at its FMV rather than its special-use value. On           1981, for purposes of determining the marital deduction for 
line 10 of the worksheet, include the additional estate tax           the reduced gross estate, see Rev. Rul. 90-2, 1990-1 C.B. 
paid as a federal estate tax paid.                                    169. To determine the “reduced adjusted gross estate,” 
                                                                      subtract the amount on line 25 of the Worksheet for 
How To Complete the Schedule Q Worksheet                              Schedule Q from the amount on line 24 of the worksheet. If 
Most of the information to complete Part I of the worksheet           community property is included in the amount on line 24 of 
should be obtained from the transferor's Form 706.                    the worksheet, figure the reduced adjusted gross estate 
Line 5. Enter on line 5 the applicable marital deduction              using the rules of Regulations section 20.2056(c)-2 and Rev. 
claimed for the transferor's estate (from the transferor's Form       Rul. 76-311, 1976-2 C.B. 261.
706).
Lines 10 through 18. Enter on these lines the appropriate 
taxes paid by the transferor's estate.

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Worksheet for Schedule Q—Credit for Tax on Prior Transfers
Part I  Transferor’s tax on prior transfers
                                                                                                               Transferor (From Schedule Q)                                  Total for all transfers
                                     Item                                                                                                                                          (line 8 only)
                                                                                                   A                         B                             C
1.      Gross value of prior transfer to this transferee   . . . . . . . . . . . . .
2.      Death taxes payable from prior transfer .    . . . . . . . . . . . . . . . .
3.      Encumbrances allocable to prior transfer .     . . . . . . . . . . . . . . .
4.      Obligations allocable to prior transfer  . . . . . . . . . . . . . . . . . .
5.      Marital deduction applicable to line 1 above, as shown on transferor’s 
        Form 706 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.      TOTAL. Add lines 2, 3, 4, and 5    . . . . . . . . . . . . . . . . . . . . .
7.      Net value of transfers. Subtract line 6 from line 1      . . . . . . . . . .
8.      Net value of transfers. Add columns A, B, and C of line 7 .        . . . . .
9.      Transferor’s tentative taxable estate (see line 3a, page 1, Form 
        706) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.     Federal estate tax paid  . . . . . . . . . . . . . . . . . . . . . . . . . .
11.     State death taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . .
12.     Foreign death taxes paid   . . . . . . . . . . . . . . . . . . . . . . . . .
13.     Other death taxes paid   . . . . . . . . . . . . . . . . . . . . . . . . . .
14.     TOTAL taxes paid. Add lines 10, 11, 12, and 13         . . . . . . . . . . .
15.     Value of transferor’s estate. Subtract line 14 from line 9       . . . . . .
16.     Net federal estate tax paid on transferor’s estate .   . . . . . . . . . . .
17.     Credit for gift tax paid on transferor’s estate with respect to pre-1977 
        gifts (section 2012) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.     Credit allowed transferor’s estate for tax on prior transfers from prior 
        transferor(s) who died within 10 years before death of 
        decedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19.     Tax on transferor’s estate. Add lines 16, 17, and 18 .       . . . . . . . .
20.     Transferor’s tax on prior transfers ((line 7 ÷ line 15) × line 19 of 
        respective estates)  . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part II Transferee’s tax on prior transfers
                                                                               Item                                                                                                Amount
21.     Transferee’s actual tax before allowance of credit for prior transfers (see instructions)      . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   21.
22.     Total gross estate of transferee from line 1 of the Tax Computation, page 1, Form 706          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   22.
23.     Net value of all transfers from line 8 of this worksheet .   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.
24.     Transferee’s reduced gross estate. Subtract line 23 from line 22 .       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24.
25.     Total debts and deductions (not including marital and charitable deductions) (line 3b of Part 2—Tax 
        Computation, page 1; and items 18, 19, and 20 of the Recapitulation, page 3, Form 706)             . . . . . . . . . .           25.
26.     Marital deduction from item 21, Recapitulation, page 3, Form 706 (see instructions)          . . . . . . . . . . . . .           26.
27.     Charitable bequests from item 22, Recapitulation, page 3, Form 706 .          . . . . . . . . . . . . . . . . . . . . .          27.
28.     Charitable deduction proportion ([line 23 ÷ (line 22 – line 25)] × line 27)    . . . . . . . . . . . . . . . . . . . .           28.
29.     Reduced charitable deduction. Subtract line 28 from line 27 .        . . . . . . . . . . . . . . . . . . . . . . . . . .         29.
30.     Transferee’s deduction as adjusted. Add lines 25, 26, and 29         . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.
31. (a) Transferee’s reduced taxable estate. Subtract line 30 from line 24 .       . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31(a).
    (b) Adjusted taxable gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31(b).
    (c) Total reduced taxable estate. Add lines 31(a) and 31(b)        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31(c).
32.     Tentative tax on reduced taxable estate .    . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         32.
33. (a) Post-1976 gift taxes paid  . . . . . . . . . . . . . . . . . . . . . . . . .       33(a).
    (b) Unified credit (applicable credit amount)    . . . . . . . . . . . . . . . .       33(b).
    (c) Section 2012 gift tax credit . . . . . . . . . . . . . . . . . . . . . . . .       33(c).
    (d) Section 2014 foreign death tax credit    . . . . . . . . . . . . . . . . . .       33(d).
    (e) Total credits. Add lines 33(a) through 33(d) .   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     33(e).
34.     Net tax on reduced taxable estate. Subtract line 33(e) from line 32        . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.
35.     Transferee’s tax on prior transfers. Subtract line 34 from line 21     . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.

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                                                                      property transferred on behalf of the decedent during life and 
Schedules R and                                                       after October 21, 1986). The GST tax will also not apply to 
                                                                      any transfer under a trust to the extent that the trust consists 
R-1—Generation-Skipping Transfer                                      of property included in the gross estate (other than property 
Tax                                                                   transferred on behalf of the decedent during life and after 
                                                                      October 21, 1986).
Introduction and Overview                                             Under a mental disability means the decedent lacked the 
Schedule R is used to figure the generation-skipping transfer         competence to execute an instrument governing the 
(GST) tax that is payable by the estate. Schedule R-1 is used         disposition of property owned, regardless of whether there 
to figure the GST tax that is payable by certain trusts that are      was an adjudication of incompetence or an appointment of 
includible in the gross estate.                                       any other person charged with the care of the person or 
                                                                      property of the transferor.
The GST tax reported on Form 706 is imposed on only                   If the decedent had been adjudged mentally incompetent, 
direct skips occurring at death. Unlike the estate tax, which is      a copy of the judgment or decree must be filed with this 
imposed on the value of the entire taxable estate regardless          return.
of who receives it, the GST tax is imposed on only the value 
of interests in property, wherever located, that actually pass        If the decedent had not been adjudged mentally 
to certain transferees, who are referred to as skip persons           incompetent, the executor must file with the return a 
(defined later).                                                      certification from a qualified physician stating that in the 
                                                                      physician’s opinion the decedent had been mentally 
For purposes of Form 706, the property interests                      incompetent at all times on and after October 22, 1986, and 
transferred must be includible in the gross estate before they        that the decedent had not regained the competence to 
are subject to the GST tax. Therefore, the first step in figuring     modify or revoke the terms of the trust or will prior to the 
the GST tax liability is to determine the property interests          decedent’s death or a statement as to why no such 
includible in the gross estate by completing Schedules A              certification may be obtained from a physician.
through I of Form 706.
                                                                      Direct skip. The GST tax reported on Form 706 and 
The second step is to determine who the skip persons are.             Schedule R-1 is imposed only on direct skips. For purposes 
To do this, assign each transferee to a generation and                of Form 706, a direct skip is a transfer that is:
determine whether each transferee is a natural person or a            • Subject to the estate tax,
trust for GST purposes. See section 2613 and Regulations              • Of an interest in property, and
section 26.2612-1(d) for details.                                     • To a skip person.
The third step is to determine which skip persons are                 All three requirements must be met before the transfer is 
transferees of interests in property. If the skip person is a         subject to the GST tax. A transfer is subject to the estate tax if 
natural person, anything transferred is an interest in property.      you are required to list it on any of Schedules A through I of 
If the skip person is a trust, make this determination using the      Form 706. To determine if a transfer is of an interest in 
rules under Interest in property, later. These first three steps      property and to a skip person, you must first determine if the 
are described in detail under Determining Which Transfers             transferee is a natural person or a trust, as defined later.
Are Direct Skips, later.                                              Trust. For purposes of the GST tax, a trust includes not only 
The fourth step is to determine whether to enter the                  an ordinary trust (as defined in Special rule for trusts other 
transfer on Schedule R or on Schedule R-1. See the rules              than ordinary trusts, later), but also any other arrangement 
under Dividing Direct Skips Between Schedules R and R-1,              (other than an estate) which, although not explicitly a trust, 
later.                                                                has substantially the same effect as a trust. For example, a 
                                                                      trust includes life estates with remainders, terms for years, 
The fifth step is to complete Schedules R and R-1 using               and insurance and annuity contracts.
the How To Complete instructions for each schedule.                   Substantially separate and independent shares of different 
                                                                      beneficiaries in a trust are treated as separate trusts.
Determining Which Transfers Are Direct Skips
                                                                      Interest in property. If a transfer is made to a natural 
Effective dates. The rules below apply only for the purpose           person, it is always considered a transfer of an interest in 
of determining if a transfer is a direct skip that should be          property for purposes of the GST tax.
reported on Schedule R or R-1 of Form 706.
In general.    The GST tax is effective for the estates of            If a transfer is made to a trust, a person will have an 
decedents dying after October 22, 1986.                               interest in the property transferred to the trust if that person 
                                                                      either has a present right to receive income or corpus from 
Irrevocable trusts.      The GST tax will not apply to any            the trust (such as an income interest for life) or is a 
transfer under a trust that was irrevocable on September 25,          permissible current recipient of income or corpus from the 
1985, but only to the extent that the transfer was not made           trust (that is, may receive income or corpus at the discretion 
out of corpus added to the trust after September 25, 1985.            of the trustee).
An addition to the corpus after that date will cause a 
proportionate part of future income and appreciation to be            Skip person.    A transferee who is a natural person is a skip 
subject to the GST tax. For more information, see                     person if that transferee is assigned to a generation that is 
Regulations section 26.2601-1(b)(1).                                  two or more generations below the generation assignment of 
Mental disability. If, on October 22, 1986, the decedent              the decedent. See Determining the generation of a 
was under a mental disability to change the disposition of            transferee, later.
property owned and did not regain the competence to                   A transferee who is a trust is a skip person if all the 
dispose of property before death, the GST tax will not apply          interests in the property (as defined above) transferred to the 
to any property included in the gross estate (other than 

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trust are held by skip persons. Thus, whenever a non-skip        and transfers after December 31, 1997, the existing rule that 
person has an interest in a trust, the trust will not be a skip  applied to grandchildren of the decedent has been extended 
person even though a skip person also has an interest in the     to apply to other lineal descendants.
trust.                                                                If property is transferred to an individual who is a 
A trust will also be a skip person if there are no interests in  descendant of a parent of the transferor, and that individual's 
the property transferred to the trust held by any person, and    parent (who is a lineal descendant of the parent of the 
future distributions or terminations from the trust can be       transferor) is deceased at the time the transfer is subject to 
made only to skip persons.                                       gift or estate tax, then for purposes of generation assignment, 
                                                                 the individual is treated as if the individual is a member of the 
Non-skip person. A non-skip person is any transferee who 
                                                                 generation that is one generation below the lower of:
is not a skip person.
                                                                      • The transferor's generation; or
Determining the generation of a transferee.  Generally, a             • The generation assignment of the youngest living 
generation is determined along family lines as follows.                 ancestor of the individual, who is also a descendant of 
                                                                        the parent of the transferor.
1. Where the beneficiary is a lineal descendant of a 
grandparent of the decedent (that is, the decedent's                  The same rules apply to the generation assignment of any 
cousin, niece, nephew, etc.), the number of generations          descendant of the individual.
between the decedent and the beneficiary is determined                This rule does not apply to a transfer to an individual who 
by subtracting the number of generations between the             is not a lineal descendant of the transferor if the transferor 
grandparent and the decedent from the number of                  has any living lineal descendants.
generations between the grandparent and the 
                                                                      If any transfer of property to a trust would have been a 
beneficiary.
                                                                 direct skip except for this generation assignment rule, then 
2. Where the beneficiary is a lineal descendant of a             the rule also applies to transfers from the trust attributable to 
grandparent of a spouse (or former spouse) of the                such property.
decedent, the number of generations between the                       See the examples in Regulations section 26.2651-1(c).
decedent and the beneficiary is determined by                         Generation assignment under Notice 2017-15.          Notice 
subtracting the number of generations between the                2017-15 permits taxpayers to reduce their GST exemption 
grandparent and the spouse (or former spouse) from the           allocated to transfers that were made to or for the benefit of 
number of generations between the grandparent and the            transferees whose generation assignment is changed as a 
beneficiary.                                                     result of the Windsor decision. A taxpayer’s GST exemption 
3. A person who at any time was married to a person              that was allocated to a transfer to (or to a trust for the sole 
described in (1) or (2) above is assigned to the                 benefit of) one or more transferees whose generation 
generation of that person. A person who at any time was          assignment should have been determined on the basis of a 
married to the decedent is assigned to the decedent's            familial relationship as the result of the Windsor decision, and 
generation.                                                      are non-skip persons, is deemed void. For additional 
                                                                 information, go to IRS.gov/Businesses/Small-Businesses-
4. A relationship by adoption or half-blood is treated as a      Self-Employed/Estate-and-Gift-Taxes.
relationship by whole-blood.                                          Ninety-day rule. For purposes of determining if an 
5. A person who is not assigned to a generation according        individual's parent is deceased at the time of a testamentary 
to (1), (2), (3), or (4) above is assigned to a generation       transfer, an individual's parent who dies no later than 90 days 
based on the birth date, as follows.                             after a transfer occurring by reason of the death of the 
                                                                 transferor is treated as having predeceased the transferor. 
a. A person who was born not more than 12 /  years 1 2           The 90-day rule applies to transfers occurring on or after July 
       after the decedent is in the decedent's generation.       18, 2005. See Regulations section 26.2651-1 for more 
b. A person born more than 12 /  years, but not more 1 2         information.
       than 37 /  years, after the decedent is in the first 1 2       Charitable organizations. Charitable organizations and 
       generation younger than the decedent.                     trusts described in sections 511(a)(2) and 511(b)(2) are 
                                                                 assigned to the decedent's generation. Transfers to such 
c. A similar rule applies for a new generation every 25          organizations are therefore not subject to the GST tax.
       years.                                                         Charitable remainder trusts.   Transfers to or in the form 
If more than one of the rules for assigning generations          of charitable remainder annuity trusts, charitable remainder 
applies to a transferee, that transferee is generally assigned   unitrusts, and pooled income funds are not considered made 
to the youngest of the generations that would apply.             to skip persons and, therefore, are not direct skips even if all 
If an estate, trust, partnership, corporation, or other entity   of the life beneficiaries are skip persons.
(other than certain charitable organizations and trusts          Estate tax value.  Estate tax value is the value shown on 
described in sections 511(a)(2) and 511(b)(2)) is a              Schedules A through I of this Form 706.
transferee, then each person who indirectly receives the              Examples. The rules above can be illustrated by the 
property interests through the entity is treated as a transferee following examples.
and is assigned to a generation, as explained in the above 
rules. However, this look-through rule does not apply for the         1. Under the will, the decedent's house is transferred to the 
purpose of determining whether a transfer to a trust is a direct        decedent's child for the child’s life, with the remainder 
skip.                                                                   passing to the child’s children. This transfer is made to a 
Generation assignment where intervening parent is                       “trust” even though there is no explicit trust instrument. 
deceased. A special rule may apply in the case of the death             The interest in the property transferred (the present right 
of a parent of the transferee. For terminations, distributions,         to use the house) is transferred to a non-skip person (the 

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decedent's child). Therefore, the trust is not a skip                declaration whereby trustees take title to property for the 
person because there is an interest in the transferred               purpose of protecting or conserving it for the beneficiaries 
property that is held by a non-skip person. The transfer is          under the ordinary rules applied in chancery or probate 
not a direct skip.                                                   courts.” Direct skips from ordinary trusts are required to be 
                                                                     reported on Schedule R-1 regardless of their size unless the 
2. The will bequeaths $100,000 to the decedent's 
                                                                     executor is also a trustee (see Executor as trustee below).
grandchild. This transfer is a direct skip that is not made 
in trust and should be shown on Schedule R.                          Direct skips from trusts that are trusts for GST tax 
                                                                     purposes but are not ordinary trusts are to be shown on 
3. The will establishes a trust that is required to accumulate       Schedule R-1 only if the total of all tentative maximum direct 
income for 10 years and then pay its income to the                   skips from the entity is $250,000 or more. If this total is less 
decedent's grandchildren for the rest of their lives and,            than $250,000, the skips should be shown on Schedule R. 
upon their deaths, distribute the corpus to the decedent's           For purposes of the $250,000 limit, tentative maximum direct 
great-grandchildren. Because the trust has no current                skips is the amount you would enter on line 5 of 
beneficiaries, there are no present interests in the                 Schedule R-1 if you were to file that schedule.
property transferred to the trust. All of the persons to 
                                                                     A liquidating trust (such as a bankruptcy trust) under 
whom the trust can make future distributions (including 
                                                                     Regulations section 301.7701-4(d) is not treated as an 
distributions upon the termination of interests in property 
                                                                     ordinary trust for the purposes of this special rule.
held in trust) are skip persons (for example, the 
decedent's grandchildren and great-grandchildren).                   If the proceeds of a life insurance policy are includible in 
Therefore, the trust itself is a skip person and you should          the gross estate and are payable to a beneficiary who is a 
show the transfer on Schedule R.                                     skip person, the transfer is a direct skip from a trust that is not 
                                                                     an ordinary trust. It should be reported on Schedule R-1 if the 
4. The will establishes a trust that is to pay all of its income     total of all the tentative maximum direct skips from the 
to the decedent's grandchildren for 10 years. At the end             company is $250,000 or more. Otherwise, it should be 
of 10 years, the corpus is to be distributed to the                  reported on Schedule R.
decedent's children. All of the present interests in this 
                                                                     Similarly, if an annuity is includible on Schedule I and its 
trust are held by skip persons. Therefore, the trust is a 
                                                                     survivor benefits are payable to a beneficiary who is a skip 
skip person and you should show this transfer on 
                                                                     person, then the estate tax value of the annuity should be 
Schedule R. You should show the estate tax value of all 
                                                                     reported as a direct skip on Schedule R-1 if the total tentative 
the property transferred to the trust even though the trust 
                                                                     maximum direct skips from the entity paying the annuity are 
has some ultimate beneficiaries who are non-skip 
                                                                     $250,000 or more.
persons.
                                                                     Executor as trustee.  If any of the executors of the 
Dividing Direct Skips Between Schedules R and                        decedent's estate are trustees of the trust, then all direct 
R-1                                                                  skips for that trust must be shown on Schedule R and not on 
                                                                     Schedule R-1, even if they would otherwise have been 
        Report all generation-skipping transfers on                  required to be shown on Schedule R-1. This rule applies 
TIP     Schedule R unless the rules below specifically               even if the trust has other trustees who are not executors of 
        provide that they are to be reported on Schedule R-1.        the decedent's estate.
Under section 2603(a)(2), the GST tax on direct skips 
from a trust (as defined for GST tax purposes) is to be paid         How To Complete Schedules R and R-1
by the trustee and not by the estate. Schedule R-1 serves as         Valuation. Enter on Schedules R and R-1 the estate tax 
a notification from the executor to the trustee that a GST tax       value of the property interests subject to the direct skips. If 
is due.                                                              you elected alternate valuation (section 2032) and/or 
For a direct skip to be reportable on Schedule R-1, the              special-use valuation (section 2032A), you must use the 
trust must be includible in the decedent's gross estate.             alternate and/or special-use values on Schedules R and R-1.

If the decedent was a surviving spouse receiving lifetime            How To Complete Schedule R
benefits from a marital deduction power of appointment (or           Part 1. GST Exemption Reconciliation
QTIP) trust created by the decedent's spouse, then transfers 
caused by reason of the decedent's death from that trust to          Part 1, line 6, of both Parts 2 and 3, and line 4 of 
skip persons are direct skips required to be reported on             Schedule R-1 are used to allocate the decedent's GST 
Schedule R-1.                                                        exemption. This allocation is made by filing Form 706 and 
If a direct skip is made “from a trust” under these rules, it is     attaching a completed Schedule R and/or R-1. Once made, 
reportable on Schedule R-1 even if it is also made “to a trust”      the allocation is irrevocable. You are not required to allocate 
rather than to an individual.                                        all of the decedent's GST exemption. However, the portion of 
                                                                     the exemption that you do not allocate will be allocated by the 
Similarly, if property in a trust (as defined for GST tax            IRS under the deemed allocation of unused GST exemption 
purposes) is included in the decedent's gross estate under           rules of section 2632(e).
section 2035, 2036, 2037, 2038, 2039, 2041, or 2042 and 
such property is, by reason of the decedent's death,                 For transfers made through 1998, the GST exemption was 
transferred to skip persons, the transfers are direct skips          $1 million. The current GST exemption is $12,920,000. The 
required to be reported on Schedule R-1.                             exemption amounts for 1999 through 2023 are as follows.
Special rule for trusts other than ordinary trusts.  An 
ordinary trust is defined in Regulations section 301.7701-4(a) 
as “an arrangement created by a will or by an inter vivos 

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        Year of transfer     GST exemption                      Unless the decedent elected out of the deemed allocation 
             1999            $1,010,000                         rules, allocations are deemed to have been made in the 
             2000            $1,030,000                         following order.
             2001            $1,060,000                              1. To inter vivos direct skips.
             2002            $1,100,000
             2003            $1,120,000                              2. Beginning with transfers made after December 31, 2000, 
        2004 and 2005        $1,500,000                              to lifetime transfers to certain trusts, by the decedent, 
        2006, 2007, and 2008 $2,000,000                              that constituted indirect skips that were subject to the gift 
             2009            $3,500,000                              tax.
        2010 and 2011        $5,000,000                              For more information, see section 2632 and related 
             2012            $5,120,000                         regulations.
             2013            $5,250,000
             2014            $5,340,000                         Line 3.  Make an entry on this line if you are filing Form(s) 
             2015            $5,430,000                         709 for the decedent and wish to allocate any exemption.
             2016            $5,450,000                         Lines 4, 5, and 6. These lines represent your allocation of 
             2017            $5,490,000                         the GST exemption to direct skips made by reason of the 
             2018            $11,180,000                        decedent's death. Complete Parts 2 and 3 and Schedule R-1 
             2019            $11,400,000                        before completing these lines.
             2020            $11,580,000                        Line 9.  Line 9 is used to allocate the remaining unused GST 
             2021            $11,700,000                        exemption (from line 8) and to help you figure the trust's 
             2022            $12,060,000                        inclusion ratio. Line 9 is a Notice of Allocation for allocating 
             2023            $12,920,000                        the GST exemption to trusts as to which the decedent is the 
                                                                transferor and from which a generation-skipping transfer 
                                                                could occur after the decedent's death.
The amount of each increase can only be allocated to                 If line 9 is not completed, the deemed allocation at death 
transfers made (or appreciation that occurred) during or after  rules will apply to allocate the decedent's remaining unused 
the year of the increase. The following example shows the       GST exemption. The exemption will first be allocated to 
application of this rule.                                       property that is the subject of a direct skip occurring at the 
Example.     In 2003, Alex made a direct skip of $1,120,000     decedent's death, and then to trusts as to which the 
and applied the full $1,120,000 of GST exemption to the         decedent is the transferor. To avoid the application of the 
transfer. Alex made a $450,000 taxable direct skip in 2004      deemed allocation rules, you should enter on line 9 every 
and another of $90,000 in 2006. For 2004, Alex can only         trust (except certain trusts entered on Schedule R-1, as 
apply $380,000 of exemption ($380,000 inflation adjustment      described later) to which you wish to allocate any part of the 
from 2004) to the $450,000 transfer in 2004. For 2006, Alex     decedent's GST exemption. Unless you enter a trust on 
can apply $90,000 of exemption to the 2006 transfer, but        line 9, the unused GST exemption will be allocated to it under 
nothing to the transfer made in 2004. At the end of 2006, Alex  the deemed allocation rules.
would have $410,000 of unused exemption that can apply to            If a trust is entered on Schedule R-1, the amount you 
future transfers (or appreciation) starting in 2007.            entered on line 4 of Schedule R-1 serves as a Notice of 
                                                                Allocation and you need not enter the trust on line 9 unless 
Special QTIP election.    In the case of property for which a   you wish to allocate more than the Schedule R-1, line 4, 
marital deduction is allowed to the decedent's estate under     amount to the trust. However, you must enter the trust on 
section 2056(b)(7) (QTIP election), section 2652(a)(3) allows   line 9 if you wish to allocate any of the unused GST 
you to treat such property for purposes of the GST tax as if    exemption amount to it. Such an additional allocation would 
the election to be treated as qualified terminable interest     not ordinarily be appropriate in the case of a trust entered on 
property had not been made.                                     Schedule R-1 when the trust property passes outright (rather 
The section 2652(a)(3) election must include the value of       than to another trust) at the decedent's death. However, 
all property in the trust for which a QTIP election was allowed where section 2032A property is involved, it may be 
under section 2056(b)(7).                                       appropriate to allocate additional exemption amounts to the 
If a section 2652(a)(3) election is made, then the decedent     property. See the instructions for line 10, later.
will, for GST tax purposes, be treated as the transferor of all         To avoid application of the deemed allocation rules, 
the property in the trust for which a marital deduction was          !  Form 706 and Schedule R should be filed to allocate 
allowed to the decedent's estate under section 2056(b)(7). In   CAUTION the exemption to trusts that may later have taxable 
this case, the executor of the decedent's estate may allocate   terminations or distributions under section 2612 even if the 
part or all of the decedent's GST exemption to the property.    form is not required to be filed to report estate or GST tax.
You make the election simply by listing qualifying property 
                                                                     Line 9, column C. Enter the GST exemption, included on 
on line 9 of Part 1.
                                                                lines 2 through 6 of Part 1 of Schedule R (discussed above), 
Line 2. These allocations will have been made either on         that was allocated to the trust.
Forms 709 filed by the decedent or on Notices of Allocation          Line 9, column D. Allocate the amount on line 8 of Part 1 
made by the decedent for inter vivos transfers that were not    of Schedule R in line 9, column D. This amount may be 
direct skips but to which the decedent allocated the GST        allocated to transfers into trusts that are not otherwise 
exemption. These allocations by the decedent are                reported on Form 706. For example, the line 8 amount may 
irrevocable.                                                    be allocated to an inter vivos trust established by the 
Also include on this line allocations deemed to have been       decedent during the decedent’s lifetime and not included in 
made by the decedent under the rules of section 2632.           the gross estate. This allocation is made by identifying the 

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trust on line 9 and making an allocation to it using column D.                  Parts 2 and 3
If the trust is not included in the gross estate, value the trust 
as of the date of death. Inform the trustee of each trust listed                Use Part 2 to figure the GST tax on transfers in which the 
on line 9 of the total GST exemption you allocated to the trust.                property interests transferred are to bear the GST tax on the 
The trustee will need this information to figure the GST tax on                 transfers. Use Part 3 to report the GST tax on transfers in 
future distributions and terminations.                                          which the property interests transferred do not bear the GST 
Line 9, column E. Trust's inclusion ratio.                     The trustee      tax on the transfers.
must know the trust's inclusion ratio to figure the trust's GST 
tax for future distributions and terminations. You are not                      Section 2603(b) requires that, unless the governing 
required to inform the trustee of the inclusion ratio and may                   instrument provides otherwise, the GST tax is to be charged 
not have enough information to figure it. Therefore, you are                    to the property constituting the transfer. Therefore, you will 
not required to make an entry in column E. However, column                      usually enter all of the direct skips on Part 2.
E and the worksheet later are provided to assist you in 
figuring the inclusion ratio for the trustee if you wish to do so.              You may enter a transfer on Part 3 only if the will or trust 
Inform the trustee of the amount of the GST exemption you                       instrument directs, by specific reference, that the GST tax is 
allocated to the trust. Line 9, columns C and D, may be used                    not to be paid from the transferred property interests.
to figure this amount for each trust.                                           Part 2, line 3. Enter zero on this line unless the will or trust 
                                                                                instrument specifies that the GST taxes will be paid by 
Note. This worksheet will figure an accurate inclusion ratio                    property other than that constituting the transfer (as 
only if the decedent was the only settlor of the trust. Use a                   described above). Enter on line 3 the total of the GST taxes 
separate worksheet for each trust (or a separate share of a                     shown on Part 3 and Schedule(s) R-1 that are payable out of 
trust that is treated as a separate trust).                                     the property interests shown on Part 2, line 1.
                                                                                Part 2, line 6. Do not enter more than the amount on line 5. 
WORKSHEET (Inclusion Ratio)                                                     Additional allocations may be made using Part 1.
1. Total estate and gift tax value of all of the property                       Part 3, line 3. See the instructions for Part 2, line 3, above. 
   interests that passed to the trust    . . . . . . . . . .                    Enter only the total of the GST taxes shown on Schedule(s) 
2. Estate taxes, state death taxes, and other charges                           R-1 that are payable out of the property interests shown on 
   actually recovered from the trust     . . . . . . . . . .                
                                                                                Part 3, line 1.
3. GST taxes imposed on direct skips to skip persons 
   other than this trust and borne by the property                              Part 3, line 6. See the instructions for Part 2, line 6, above.
   transferred to this trust . . . . . . . . . . . . . . . .                
4. GST taxes actually recovered from this trust (from                           How To Complete Schedule R-1
   Schedule R, Part 2, line 8; or Schedule R-1, 
   line 6) . . . . . . . . . . . . . . . . . . . . . . . . . .                  Filing due date. Enter the due date of Form 706. You must 
5. Add lines 2 through 4 . . . . . . . . . . . . . . . . .                      send the copies of Schedule R-1 to the fiduciary before this 
6. Subtract line 5 from line 1   . . . . . . . . . . . . . .                    date.
7. Add columns C and D of line 9       . . . . . . . . . . .                    Line 4. Do not enter more than the amount on line 3. If you 
8. Divide line 7 by line 6 . . . . . . . . . . . . . . . . .                    wish to allocate an additional GST exemption, you must use 
9. Trust's inclusion ratio. Subtract line 8 from                                Schedule R, Part 1. Making an entry on line 4 constitutes a 
   1.000   . . . . . . . . . . . . . . . . . . . . . . . . . .                  Notice of Allocation of the decedent's GST exemption to the 
                                                                                trust.
Line 10. Special-use allocation.               For skip persons who             Line 6. If the property interests entered on line 1 will not bear 
receive an interest in section 2032A special-use property, you                  the GST tax, multiply line 6 by 40% (0.40).
may allocate more GST exemption than the direct skip 
amount to reduce the additional GST tax that would be due                       Signature. The executor(s) must sign Schedule R-1 in the 
when the interest is later disposed of or qualified use ceases.                 same manner as Form 706. See Signature and Verification, 
See Schedule A-1, earlier, for more details about this                          earlier.
additional GST tax.                                                             Filing Schedule R-1. Attach to Form 706 one copy of each 
Enter on line 10 the total additional GST exemption                             Schedule R-1 that you prepare. Send two copies of each 
available to allocate to all skip persons who received any                      Schedule R-1 to the fiduciary.
interest in section 2032A property. Attach a special-use 
allocation statement listing each such skip person and the 
amount of the GST exemption allocated to that person.                           Schedule U—Qualified Conservation 
If you do not allocate the GST exemption, it will                               Easement Exclusion
automatically be allocated under the deemed allocation at 
                                                                                        If at the time of the contribution of the conservation 
death rules. To the extent any amount is not so allocated, it 
                                                                                        easement, the value of the easement, the value of 
will be automatically allocated to the earliest disposition or                  CAUTION!
                                                                                        the land subject to the easement, or the value of any 
cessation that is subject to the GST tax. Under certain 
                                                                                retained development right was different from the estate tax 
circumstances, post-death events may cause the decedent 
                                                                                value, you must complete a separate computation in addition 
to be treated as a transferor for purposes of chapter 13.
                                                                                to completing Schedule U.
Line 10 may be used to set aside an exemption amount for 
such an event. Attach a statement listing each such event                       Use a copy of Schedule U as a worksheet for this separate 
and the amount of exemption allocated to that event.                            computation. Complete lines 4 through 14 of the worksheet 
                                                                                Schedule U. However, the value you use on lines 4, 5, 7, and 
                                                                                10 of the worksheet is the value for these items as of the date 

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of the contribution of the easement, not the estate tax value.    in the trust. For additional information, see the ownership 
If the date of contribution and the estate tax values are the     rules in section 2057(e)(3).
same, you do not need to do a separate computation.
After completing the worksheet, enter the amount from             Qualified Conservation Easement

line 14 of the worksheet on line 14 of Schedule U. Finish         A qualified conservation easement is one that would qualify 
completing Schedule U by entering amounts on lines 4, 7,          as a qualified conservation contribution under section 170(h). 
and 15 through 20, following the instructions later for those     It must be a contribution:
lines. At the top of Schedule U, enter "worksheet attached."             Of a qualified real property interest,
Attach the worksheet to the return.                                    •
                                                                       • To a qualified organization, and
Under section 2031(c), you may elect to exclude a portion              • Exclusively for conservation purposes.
of the value of land that is subject to a qualified conservation 
easement. You make the election by filing Schedule U with all     Qualified real property interest.      A qualified real property 
of the required information and excluding the applicable value    interest is any of the following.
of the land that is subject to the easement on Part                    • The entire interest of the donor, other than a qualified 
5—Recapitulation, on item 12. To elect the exclusion, include            mineral interest.
on Schedule A, B, E, F, G, or H, as appropriate, the                   • A remainder interest.
decedent's interest in the land that is subject to the exclusion.      • A restriction granted in perpetuity on the use that may be 
You must make the election on a timely filed Form 706,                   made of the real property. The restriction must include a 
including extensions.                                                    prohibition on more than a de minimis use for commercial 
                                                                         recreational activity.
The exclusion is the lesser of:
• The applicable percentage of the value of land (after           Qualified organization.      A qualified organization includes 
  certain reductions) subject to a qualified conservation         the following.
  easement, or                                                         • Corporations and any community chest, fund, or 
• $500,000.                                                              foundation, organized and operated exclusively for 
                                                                         religious, charitable, scientific, testing for public safety, 
Once made, the election is irrevocable.                                  literary, or educational purposes, or to foster national or 
                                                                         international amateur sports competition, or for the 
General Requirements                                                     prevention of cruelty to children or animals, without net 
Qualified Land                                                           earnings benefitting any individual shareholder and 
                                                                         without activity with the purpose of influencing legislation 
Land may qualify for the exclusion if all of the following               or political campaigning, which:
requirements are met.                                                    a. Receives more than one-third of its support from 
• The decedent or a member of the decedent's family must                 gifts, contributions, membership fees, or receipts from 
  have owned the land for the 3-year period ending on the                sales, admissions fees, or performance of services; or
  date of the decedent's death.                                          b. Is controlled by such an organization.
• No later than the date the election is made, a qualified             • Any entity that qualifies under section 170(b)(1)(A)(v) or 
  conservation easement on the land has been made by                     (vi).
  the decedent, a member of the decedent's family, the 
  executor of the decedent's estate, or the trustee of a trust    Conservation purpose.        An easement has a conservation 
  that holds the land.                                            purpose if it is for:
• The land is located in the United States or one of its               • The preservation of land areas for outdoor recreation by, 
  possessions.                                                           or for the education of, the public;
                                                                       • The protection of a relatively natural habitat of fish, 
Member of Family                                                         wildlife, or plants, or a similar ecosystem; or
                                                                       • The preservation of open space (including farmland and 
Members of the decedent's family include the decedent's                  forest land) where such preservation is for the scenic 
spouse; ancestors; lineal descendants of the decedent, of                enjoyment of the general public, or under a clearly 
the decedent's spouse, and of the parents of the decedent;               delineated federal, state, or local conservation policy and 
and the spouse of any lineal descendant. A legally adopted               will yield a significant public benefit.
child of an individual is considered a child of the individual by 
blood.                                                            Specific Instructions
                                                                  Line 1
Indirect Ownership of Land
                                                                  If the land is reported as one or more item numbers on a 
The qualified conservation easement exclusion applies if the      Form 706 schedule, simply list the schedule and item 
land is owned indirectly through a partnership, corporation, or   numbers. If the land subject to the easement is only part of 
trust, if the decedent owned (directly or indirectly) at least    an item, however, list the schedule and item number and 
30% of the entity. For the rules on determining ownership of      describe the part subject to the easement. See the 
an entity, see Ownership rules next.                              instructions for Schedule A—Real Estate, earlier, for 
                                                                  information on how to describe the land.
Ownership rules. An interest in property owned, directly or 
indirectly, by or for a corporation, partnership, or trust is 
considered proportionately owned by or for the entity's 
shareholders, partners, or beneficiaries. A person is the 
beneficiary of a trust only if the person has a present interest 

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Line 3                                                               5. A clear statement of consent that is binding on all parties 
                                                                     under applicable local law:
Using the general rules for describing real estate, provide          a. To take whatever action is necessary to permanently 
enough information so the IRS can value the easement. Give                    extinguish the retained development rights listed in 
the date the easement was granted and by whom it was                          the agreement; and
granted.
                                                                     b. To be personally liable for additional taxes under 
Line 4                                                                        section 2031(c)(5)(C) if this agreement is not 
                                                                              implemented by the earlier of:
Enter on this line the gross value at which the land was                       • The date that is 2 years after the date of the 
reported on the applicable asset schedule on this Form 706.                    decedent's death, or
Do not reduce the value by the amount of any mortgage                          • The date of sale of the land subject to the 
outstanding. Report the estate tax value even if the easement                  qualified conservation easement.
was granted by the decedent (or someone other than the               6. A statement that in the event this agreement is not timely 
decedent) prior to the decedent's death.                             implemented, that they will report the additional tax on 
Note. If the value of the land reported on line 4 was different      whatever return is required by the IRS and will file the 
at the time the easement was contributed from that reported          return and pay the additional tax by the last day of the 
on Form 706, see the Caution at the beginning of the                 6th month following the applicable date described above.
Schedule U instructions.
                                                                     All parties to the agreement must sign the agreement.

Line 5                                                               For an example of an agreement containing some of the 
                                                                     same terms, see Part 3 of Schedule A-1.
The amount on line 5 should be the date of death value of 
any qualifying conservation easements granted prior to the 
decedent's death, whether granted by the decedent or                 Line 10
someone other than the decedent, for which the exclusion is 
being elected.                                                       Enter the total value of the qualified conservation easements 
                                                                     on which the exclusion is based. This could include 
Note. If the value of the easement reported on line 5 was            easements granted by the decedent (or someone other than 
different at the time the easement was contributed than at the       the decedent) prior to the decedent's death, easements 
date of death, see the Caution at the beginning of the               granted by the decedent that take effect at death, easements 
Schedule U instructions.                                             granted by the executor after the decedent's death, or some 
                                                                     combination of these.
Line 7                                                                        Use the value of the easement as of the date of 
                                                                              death, even if the easement was granted prior to the 
You must reduce the land value by the value of any                   CAUTION! date of death. But, if the value of the easement was 
development rights retained by the donor in the conveyance           different at the time the easement was contributed than at the 
of the easement. A development right is any right to use the         date of death, see the Caution at the beginning of the 
land for any commercial purpose that is not subordinate to or        Schedule U instructions.
directly supportive of the use of the land as a farm for farming 
purposes.
                                                                     Explain how this value was determined and attach copies 
Note. If the value of the retained development rights                of any appraisals. Normally, the appropriate way to value a 
reported on line 7 was different at the time the easement was        conservation easement is to determine the FMV of the land 
contributed than at the date of death, see the Caution at the        both before and after the granting of the easement, with the 
beginning of the Schedule U instructions.                            difference being the value of the easement.

You do not have to make this reduction if everyone with an           Reduce the reported value of the easement by the amount 
interest in the land (regardless of whether in possession)           of any consideration received for the easement. If the date of 
agrees to permanently extinguish the retained development            death value of the easement is different from the value at the 
right. The agreement must be filed with this return and must         time the consideration was received, reduce the value of the 
include all of the following information and terms.                  easement by the same proportion that the consideration 
                                                                     received bears to the value of the easement at the time it was 
1. A statement that the agreement is made under section              granted.
2031(c)(5).
2. A list of all persons in being, holding an interest in the        For example, assume the value of the easement at the 
land that is subject to the qualified conservation                   time it was granted was $100,000 and $10,000 was received 
easement. Include each person's name, address, TIN,                  in consideration for the easement. If the easement was worth 
relationship to the decedent, and a description of their             $150,000 at the date of death, you must reduce the value of 
interest.                                                            the easement by $15,000 ($10,000/$100,000 × $150,000) 
                                                                     and report the value of the easement on line 10 as $135,000.
3. The items of real property shown on the estate tax return 
that are subject to the qualified conservation easement 
(identified by schedule and item number).                            Line 15

4. A description of the retained development right that is to        If a charitable contribution deduction for this land has been 
be extinguished.                                                     taken on Schedule O, enter the amount of the deduction 

Instructions for Form 706 (Rev. 09-2023)                         -53-

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here. If the easement was granted after the decedent's death,         other evidence of delivery is not sufficient to confirm receipt 
a contribution deduction may be taken on Schedule O, if it            and processing of the protective claim for refund.
otherwise qualifies, as long as no income tax deduction was 
or will be claimed for the contribution by any person or entity.      Note. The written acknowledgment of receipt does not 
                                                                      constitute a determination that all requirements for a valid 
Line 16                                                               protective claim for refund have been met.
                                                                        In general, the claim will not be subject to substantive 
Reduce the value of the land by the amount of any acquisition         review until the amount of the claim has been established. 
indebtedness on the land at the date of the decedent's death.         However, a claim can be disallowed at the time of filing. For 
Acquisition indebtedness includes the unpaid amount of:               example, the claim for refund will be rejected if:
• Any indebtedness incurred by the donor in acquiring the               • The claim was not timely filed,
  property;                                                             • The claim was not filed by the fiduciary or other person 
• Any indebtedness incurred before the acquisition if the                 with authority to act on behalf of the estate,
  indebtedness would not have been incurred but for the                 • The acknowledgment of the penalties of perjury 
  acquisition;                                                            statement (on page 1 of Form 706) was not signed, or
• Any indebtedness incurred after the acquisition if the                • The claim is not adequately described.
  indebtedness would not have been incurred but for the                 If the IRS does not raise such a defect when the claim is 
  acquisition and the incurrence of the indebtedness was              filed, it will not be precluded from doing so in the later 
  reasonably foreseeable at the time of the acquisition; and          substantive review.
• The extension, renewal, or refinancing of acquisition 
  indebtedness.                                                         The estate may be given an opportunity to cure any 
                                                                      defects in the initial notice by filing a corrected and signed 
                                                                      protective claim for refund before the expiration of the 
Schedule PC—Protective Claim for                                      limitations period in section 6511(a) or within 45 days of 
Refund                                                                notice of the defect, whichever is later.
A protective claim for refund preserves the estate’s right to a 
                                                                      Related Ancillary Expenses
refund of tax paid on any amount included in the gross estate 
which would be deductible under section 2053 but has not              If a section 2053 protective claim for refund has been 
been paid or otherwise will not meet the requirements of              adequately identified on Schedule PC, the IRS will presume 
section 2053 until after the limitations period for filing the        that the claim includes certain expenses related to resolving, 
claim has passed. See section 6511(a).                                defending, or satisfying the claim. These ancillary expenses 
                                                                      may include attorneys’ fees, court costs, appraisal fees, and 
        Only use Schedule PC for section 2053 protective              accounting fees. The estate is not required to separately 
 !      claims for refund being filed with Form 706. If the           identify or substantiate these expenses; however, each 
CAUTION initial notice of the protective claim for refund is being 
                                                                      expense must meet the requirements of section 2053 to be 
submitted after Form 706 has been filed, use Form 843,                deductible.
Claim for Refund and Request for Abatement, to file the 
claim.                                                                Notice of Final Resolution of Claim
                                                                      When an expense that was the subject of a section 2053 
 Schedule PC may be used to file a section 2053 protective            protective claim for refund is finally determined, the estate 
claim for refund by estates of decedents who died after               must notify the IRS that the claim for refund is ready for 
December 31, 2011. It will also be used to inform the IRS             consideration. The notification should provide facts and 
when the contingency leading to the protective claim for              evidence substantiating the deduction under section 2053 
refund is resolved and the refund due the estate is finalized.        and the resulting recomputation of the estate tax liability. A 
The estate must indicate whether the Schedule PC being                separate notice of final resolution must be filed with the IRS 
filed is the initial notice of protective claim for refund, notice of for each resolved section 2053 protective claim for refund.
partial claim for refund, or notice of the final resolution of the 
claim for refund.                                                       There are two means by which the estate may notify the 
                                                                      IRS of the resolution of the uncertainty that deprived the 
 Because each separate claim or expense requires a                    estate of the deduction when Form 706 was filed. The estate 
separate Schedule PC, more than one Schedule PC may be                may file a supplemental Form 706 with an updated 
included with Form 706, if applicable. Two copies of each             Schedule PC and include each schedule affected by the 
Schedule PC must be included with Form 706.                           allowance of the deduction under section 2053. Page 1 of 
                                                                      Form 706 should contain the notation “Supplemental 
Note.  Filing a section 2053 protective claim for refund on           Information—Notification of Consideration of Section 2053 
Schedule PC will not suspend the IRS’s review and                     Protective Claim(s) for Refund” and include the filing date of 
examination of Form 706, nor will it delay the issuance of a          the initial notice of protective claim for refund. A copy of the 
closing letter for the estate.                                        initial notice of claim should also be submitted.
Initial Notice of Claim                                                 Alternatively, the estate may notify the IRS by filing an 
The first Schedule PC to be filed is the initial notice of            updated Form 843. Form 843 must contain the notation 
protective claim for refund. The estate will receive a written        “Notification of Consideration of Section 2053 Protective 
acknowledgment of receipt of the claim from the IRS. If the           Claim(s) for Refund,” including the filing date of the initial 
acknowledgment is not received within 180 days of filing the          notice of protective claim for refund, on page 1. A copy of the 
protective claim for refund on Schedule PC, the fiduciary             initial notice of claim must also be submitted.
should contact the IRS at 866-699-4083 to inquire about the             The estate should notify the IRS of resolution within 90 
receipt and processing of the claim. A certified mail receipt or      days of the date the claim or expense is paid or the date on 

                                                                   -54-                  Instructions for Form 706 (Rev. 09-2023)

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which the amount of the claim becomes certain and no                      columns E and F only if filing a notice of partial or final 
longer subject to contingency, whichever is later. Separate               resolution. Show the amount of ancillary or related expenses 
notifications must be submitted for every section 2053                    to be included in the claim for refund and indicate whether 
protective claim for refund that was filed.                               this amount is estimated, agreed upon, or has been paid. 
If the final section 2053 claim or expense involves multiple              Also show the amount being claimed for refund.
or recurring payments, the 90-day period begins on the date 
of the last payment. The estate may also notify the IRS (not              Note. If you made partial claims for a recurring expense, the 
more than annually) as payments are being made and                        amount presently claimed as a deduction under section 2053 
possibly qualify for a partial refund based on the amounts                will only include the amount presently claimed, not the 
paid through the date of the notice.                                      cumulative amount.

Specific Instructions                                                     Part 3. Other Schedules PC and Forms 843 Filed 
Part 1. General Information                                               by the Estate

Complete Part 1 by providing information that is correct and              On the chart in Part 3, provide information on other protective 
complete as of the time Schedule PC is filed. If filing an                claims for refund that have been previously filed on behalf of 
updated Schedule PC with a supplemental Form 706 or as                    the estate (if any), whether on other Schedules PC or on 
notice of final resolution of the protective claim for refund, be         Form 843. When the initial claim for refund is filed, only 
sure to update the information from the original filing to                information from Form(s) 843 need be included in Part 3. 
ensure that it is accurate. Be particularly careful to verify that        However, when filing a partial or final claim for refund, 
contact information (addresses and telephone numbers) and                 complete Part 3 by including the status of all claims filed by or 
the reason for filing Schedule PC are indicated correctly. If             on behalf of the estate, including those filed on other 
the fiduciary is different from the executor identified on                Schedules PC with Form 706. For each such claim, give the 
page 1 of Form 706 or has changed since the initial notice of             place of filing, date of filing, and amount of the claim.
protective claim for refund was filed, attach letters 
testamentary, letters of administration, or similar                       Continuation Schedule
documentation evidencing the fiduciary's authority to file the            When you need to list more assets or deductions than you 
protective claim for refund on behalf of the estate. Include a            have room for on one of the main schedules, use the 
copy of Form 56, Notice Concerning Fiduciary Relationship, if             Continuation Schedule at the end of Form 706. It provides a 
it has been filed.                                                        uniform format for listing additional assets from Schedules A 
                                                                          through I and additional deductions from Schedules J, K, L, 
Part 2. Claim Information                                                 M, and O.
                                                                           
For a protective claim for refund to be properly filed and                Please remember to do the following.
considered, the claim or expense forming the basis of the                  • Use a separate Continuation Schedule for each main 
potential section 2053 deduction must be clearly identified.                 schedule you are continuing. Do not combine assets or 
Using the check boxes provided, indicate whether you are                     deductions from different schedules on one Continuation 
filing the initial claim for refund, a claim for partial refund, or a        Schedule.
final claim.                                                               • Make copies of the blank schedule before completing it if 
                                                                             you expect to need more than one.
On the chart in Part 2, give the Form 706 schedule and                     • Use as many Continuation Schedules as needed to list 
item number of the claim or expense. List any amounts                        all the assets or deductions.
claimed under exceptions for ascertainable amounts                         • Enter the letter of the schedule you are continuing in the 
(Regulations section 20.2053-1(d)(4)), claims and                            space at the top of the Continuation Schedule.
counterclaims in related matters (Regulations section                      • Use the Unit value column only if continuing Schedule B, 
20.2053-4(b)), or claims under $500,000 (Regulations                         E, or G. For all other schedules, use this space to 
section 20.2053-4(c)). Provide all relevant information as                   continue the description.
described, including, most importantly, an explanation of the              • Carry the total from the Continuation Schedules forward 
reasons and contingencies delaying the actual payment to be                  to the appropriate line on the main schedule.
made in satisfaction of the claim or expense. Complete 

If continuing                                       Report                                  Where on Continuation Schedule
Schedule E, Pt. 2          Percentage includible                                   Alternate valuation date
Schedules J, L, M          Continued description of deduction                      Alternate valuation date and Alternate value
Schedule O                 Character of institution                                Alternate valuation date and Alternate value
Schedule O                 Amount of each deduction                                Value at date of death or amount deductible

Privacy Act and Paperwork Reduction Act Notice.            We ask for the information on this form to carry out the Internal Revenue 
laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these 
laws and to allow us to figure and collect the right amount of tax. Subtitle B and section 6109, and the regulations require you to 
provide this information.

Instructions for Schedules                                            -55-

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You are not required to provide the information requested on a form that is subject to the Paperwork Reduction Act unless 
the form displays a valid OMB control number. Books or records relating to a form or its instructions must be retained as long as 
their contents may become material in the administration of any Internal Revenue law. Generally, tax returns and return 
information are confidential as required by section 6103. However, section 6103 allows or requires the Internal Revenue Service 
to disclose information from this form in certain circumstances. For example, we may disclose information to the Department of 
Justice for civil or criminal litigation, and to cities, states, the District of Columbia, and U.S. commonwealths or possessions for 
use in administering their tax laws. We may also disclose this information to other countries under a tax treaty, to federal and 
state agencies to enforce federal nontax criminal laws, or to federal law enforcement and intelligence agencies to combat 
terrorism. Failure to provide this information, or providing false information, may subject you to penalties.
The time needed to complete and file this form and related schedules will vary depending on individual circumstances. The 
estimated average times are:
Form                        Recordkeeping  Learning about the law      Preparing the form    Copying, assembling, and sending 
                                                       or the form                           the form to the IRS
Form 706 & embedded         6 hr., 46 min.             7 hr., 39 min.         13 hr., 8 min. 9 hr., 10 min.
schedules
Form Schedule R-1 (706)     6 min.                     29 min.                24 min.                        20 min.

If you have comments concerning the accuracy of these time estimates or suggestions for making Form 706 simpler, we 
would be happy to hear from you. You can send us comments through IRS.gov/FormComments. Or you can write to:
Internal Revenue Service
Tax Forms and Publications Division
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224

Do not send the tax form to this address. Instead, see Where To File, earlier.

                                                       -56-                   Instructions for Form 706 (Rev. 09-2023)

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Index
 
                                       Line 3 Worksheet  16                       Schedule M, Bequests to Surviving 
A                                      Line 4 Worksheet  7                         Spouses   38
Address, executor   5                  Line 7 Worksheet  8                        Schedule O, Charitable, Public, and 
Administration Expenses    35          Losses 37                                   Similar Gifts and Bequests            41
Alternate valuation 10                 Lump-sum distribution election 35          Schedule P, Credit for Foreign Death 
                                                                                   Taxes   43
Amending Form 706     3                                                           Schedule PC, Protective Claim for 
Annuities 33                           M                                           Refund  54
Applicable Credit Adjustment   10      Marital Deduction 38                       Schedule Q, Credit for Tax on Prior 
Applicable Credit Amount   10          Material participation 12                   Transfers    44
Authorized Representative    17        Member of family  12                       Schedule U, Qualified Conservation 
                                       Mortgages and liens  37                     Easement Exclusion     51
                                                                                  Schedules R and R-1, Generation-Skipping 
B                                                                                  Transfer Tax   47
Bonds 25                               N                                          Section 2032A  11
                                       Nonresident Noncitizens   2                Section 2035(a) transfers  30
C                                                                                 Section 2036 transfers 30
Canadian marital credit   10           P                                          Section 2037 transfers 31
                                                                                  Section 2038 transfers 31
Charitable Deduction   41              Part 1. Decedent and Executor  5           Section 2044  17
Claim for refund  54                   Part 2. Tax Computation  6                 Section 6163  16
Close Corporations   17                Part 3. Elections by the Executor 10       Section 6166  14
Closing letters 4                      Part 4. General Information 17             Signature and verification 3
Conservation Easement     51           Part 5. Recapitulation 18                  Social security number  5
Continuation Schedule     55           Part 6. Portability of Deceased Spousal    Special Rule – Portability 21
Credit for foreign death taxes 43        Unused Exclusion     18
Credit for tax on prior transfers 44   Partnership Interests  17                  Special-Use Valuation  11 22, 
                                       Paying the Tax 3                           Specific Instructions 5
D                                      Penalties 4                                Stocks 25
                                       Portability 18
Death certificate 3                    Powers of appointment   32                 T
Debts of the decedent  36              Protective Claim for Refund 54             Table A, Unified Rate Schedule         6
Deductions   18                        Publications, obtaining 4                  Table of Basic Exclusion Amounts         9
Direct skips 47                        Purpose of Form   1                        Table of Estimated Values  19 20, 
Disclaimer, qualified 42                                                          Table, Taxable Gift Amount  7
Documents, supplemental      3         Q                                          Tax Computation   6
DSUE  18                                                                          Taxable Gift Amount Table   7
                                       QDOT 40
E                                      QTIP 40                                    Terminable Interests  38
                                       Qualified heir 12                          Total Credits 10
Election 14 16,                        Qualified real property 12                 Transfers, valuation rules 31
Election, lump-sum distribution   35                                              Trusts 18
Estate tax closing letters 4           R
Estimated Values  20                                                              U
Exclusion amount    7                  Recapitulation 18
Executor 2 5,                          Residents of U. S. Possessions 2           U. S. Citizens or Residents 2
                                       Reversionary or Remainder Interests  16    Unified Credit (Applicable Credit 
                                                                                   Amount)   10
F                                      Revisions of Form 706   1                  Unified credit adjustment  10
                                       Rounding off to whole dollars 4
Foreign Accounts    18
Foreign Death Taxes   43               S                                          V
Forms and publications, obtaining    4                                            Valuation methods  13
Funeral Expenses    35                 Schedule A-1, Section 2032A Valuation   22 Valuation rules, transfers 31
                                       Schedule A, Real Estate  21
G                                      Schedule B, Stocks and Bonds   25
                                       Schedule C, Mortgages, Notes, and          W
General Information   17                 Cash  27                                 What's New 1
General Instructions  1                Schedule D, Insurance on Decedent's        When To File  2
Gross estate  1 18,                      Life 27                                  Where To File 2
GST 47                                 Schedule E, Jointly Owned Property   28    Which Estates Must File 1
GST exemption table   50               Schedule F, Miscellaneous Property   29    Worksheet for Schedule Q    46
                                       Schedule G, Transfers During Decedent's    Worksheet TG-Taxable Gifts 
I                                        Life 30                                   Reconciliation   7
                                       Schedule H, Powers of appointment    32    Worksheet, inclusion ratio for trust     51
Inclusion ratio for trust 51           Schedule I, Annuities  33                  Worksheet, line 3 16
Installment payments   14              Schedule J, Funeral Expenses and           Worksheet, line 4 7
Insurance 27                             Expenses Incurred in Administering       Worksheet, line 7 8
                                         Property Subject to Claims  35
J                                      Schedule K, Debts of the Decedent and 
                                         Mortgages and Liens    36
Joint Property  28                     Schedule L, Net Losses During 
                                         Administration and Expenses Incurred 
L                                        in Administering Property Not Subject 
Liens 37                                 to Claims 37

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Checklists for Completing Form 706

To ensure a complete return, review the following checklists before filing Form 706.

Attachments . . .

Death Certificate.

Certified copy of the will—if decedent died testate, you must attach a certified copy of the will. If not certified, explain why.

Appraisals—attach any appraisals used to value property included on the return.

Copies of all trust documents where the decedent was a grantor or a beneficiary.

Form 2848 or 8821, if applicable.

Copy of any Form(s) 709 filed by the decedent, with "Exhibit to Estate Tax Return" entered across the top of the first page(s).

Copy of Line 7 Worksheet, if applicable, with “Exhibit to Estate Tax Return” entered across the top of the page(s).

Form 712, if any policies of life insurance are included on the return.

Form 706-CE, if claiming a foreign death tax credit.

                                                    -58-

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Have you . . .

Signed the return at the bottom of page 1?

Had the preparer sign, if applicable?

Obtained the signature of your authorized representative on Part 4—General Information, page 2?

Entered a Total on all schedules filed?

Made an entry on every line of the Recapitulation, even if it is a zero?

Included the CUSIP number for all stocks and bonds?

Included the EIN of trusts, partnerships, and closely held entities?

Included the first 4 pages of the return and all required schedules?

Completed Schedule F? It must be filed with all returns.

Completed Part 4—General Information, line 4, on page 2, if there is a surviving spouse?

Completed and attached Schedule D to report insurance on the life of the decedent, even if its value is not included in the 
estate?

Included any QTIP property received from a predeceased spouse?

Entered the decedent's name, SSN, and “Form 706” on your check or money order?

Completed Part 6, Section A, if the estate elects not to transfer any DSUE amount to the surviving spouse?

Completed Part 6, Section C, if the estate elects portability of any DSUE amount?

Completed Part 6, Section D, and included a copy of the Form 706, with “Exhibit to Estate Tax Return” entered across the 
top of the first page, of any predeceased spouse(s) from whom a DSUE amount was received and applied?

                                                        -59-