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NEAR FINAL DRAFT — 6/24/24

2024 Form M706Q, Election to Claim the Qualified Small

Business and Farm Property Deduction
To be completed by the executor of the estate with a date of death in 2024, and qualified heirs.

Decedent’s first name, middle initial Last name Decedent’s Social Security number

Last home address (street, apartment, route) Date of death

City State Zip code Minnesota probate county and file number

Executor’s first name, middle initial Last name Executor’s Social Security number

Name of firm (if applicable) Executor’s phone

Address (street, apartment, route) City State Zip code
Part 1 — Qualified Small Business Property Requirements
Complete Part 1 to determine if the estate meets the qualified small business property requirements. If the answer is “No” for any of the questions,
the estate is not eligible to claim the small business property deduction.
1 Is the value of the property included in the decedent’s federal adjusted taxable estate, which
is after federal allowable deductions, including debts, expenses and bequests to a surviving spouse? . ...... ..... . 1 Yes No
2 Does the property consist of assets of a trade or business (or shares of stock or other ownership interests
in a corporation or other entity that is engaged in a trade or business and is not publicly traded)? ... ..... ...... .. 2 Yes No
3 Did the decedent or the decedent’s spouse materially participate in
the trade or business during the taxable year that ended before the decedent’s death?... ...... ..... ....... .... 3 Yes No
4 Did the trade or business have gross annual sales of $10 million or less
during the last taxable year that ended before the decedent’s death?... ...... ..... ....... ..... ...... ..... ... 4 Yes No
5 Did the decedent or the decedent’s spouse continuously own the property for
the three-year period ending at the decedent’s death? ... ...... ..... ....... ..... ...... ..... ..... ...... .... 5 Yes No
If you answered yes to all of the Part 1 questions, the estate may be eligible to claim the small business property deduction.
Complete Part 3 to determine if the estate has qualified heirs.

Part 2 — Qualified Farm Property Requirements
Complete Part 2 to determine if the estate meets the qualified farm property requirements. If the answer is “No” for any of the questions, the estate
is not eligible to claim the farm property deduction.
6 Is the value of the property included in the decedent’s federal adjusted taxable estate, which
is after federal allowable deductions, including debts, expenses and bequests to a surviving spouse? . ...... ..... . 6 Yes No
7 Does the property consist of agricultural land and is owned by a person or entity that is either
not subject to or is in compliance with M.S. 500.24? .... ...... ...... ..... ..... ...... ...... ...... ...... .... 7 Yes No
8 Was the property classified for property tax purposes in the taxable year of death as agricultural
homestead, agricultural relative homestead, or special agricultural homestead under M.S. 273.124? ..... ...... .. 8 Yes No
9 Was the property classified for property tax purposes in the taxable year of death as
class 2a property under M.S. 273.13, subd. 23? ...... ..... ...... ..... ....... ..... ..... ...... ..... ...... .. 9 Yes No
10 Did the decedent or the decedent’s spouse continuously own the property for
the three-year period ending at the decedent’s death? ... ...... ..... ....... ..... ...... ..... ..... ...... ... 10 Yes No

If you answered yes to all of the Part 2 questions, the estate may be eligible to claim the farm property deduction.
Complete Part 3 to determine if the estate has qualified heirs.

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2024 M706Q P2

Decedent’s first name, middle initial, last name Decedent’s Social Security number Executor’s first name, middle initial, last name Executor’s Social Security number

Part 3 — Qualified Heirs and Family Members Requirements
11 Are each of the persons who acquired the qualified property from the decedent
family members (see instructions)? .. ..... ...... ..... ..... ....... ..... ...... ..... ...... ..... ...... .....11 Yes No
12 For the Small Business Property Deduction: Describe the trade or business the decedent and the qualified property was
engaged in and provide the NAICS Code.
Trade or business NAICS Code

13 Do the persons from question 11, the qualified heirs, agree that a family member will maintain the 2a
classification for the farm property deduction or materially participate in the operation of the trade or
business described in question 12 for the small business property deduction for the three years
following the decedent’s death? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Yes No
14 Do the persons from question 11, the qualified heirs, agree not to dispose of any interest in the qualified
property other than to a family member during the three years following the decedent’s death?... ...... ..... ...14 Yes No
Important: If, within three years following the decedent’s death, the qualified heir(s) do not adhere to the agreement signed on
page 3 of the M706, a recapture tax will be imposed.
15 Enter the name of each qualified heir from question 11, their relationship to the decedent, the Federal schedule and item
number where the properties are reported on Federal Form 706, and the fair market value of the properties received.
Federal Schedule and Name Relationship to Decedent Fair Market Value Received
Item Number Where Reported

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2024 M706Q P3 

Decedent’s first name, middle initial, last name Decedent’s Social Security number  Executor’s first name, middle initial, last name  Executor’s Social Security number  

Part 4 — Agreement (Must be completed and signed by each and every qualified heir and the executor)
Heirs: All persons signing below agree and attest to the following:
I am a “family member” as provided by M.S. 291.03, subd. 8.
I am a “qualified heir” as provided by M.S. 291.03, subd. 8(c).
Each and every qualified heir who acquired the qualified property or an interest in the qualified property described on Line 1, Parts 5 and 6 is listed below.
If any qualified heir or family member disposes of any interest in the qualified property described on Line 1, Parts 5 and 6, other than by a disposition to a 
family member, during the three-year period following decedent’s death, I am personally responsible for filing and paying the recapture tax equal to the 
value (as allowed for federal estate tax purposes) of qualified property ceasing to satisfy the three-year holding period requirements, multiplied by 16%. The 
filing and payment due date is no later than six months from the date of the disqualifying disposition.
I, a qualified heir/family member, have exercised all due diligence on whether the decedent had applied for any tax programs with the County Assessor.
If a family member does not maintain the 2a classification for the qualified property described on Line 1, Part 6 for the farm property deduction or a family 
member does not materially participate in the operation of the trade or business described on Line 12, Part 3 for the qualified property described on Line 1, 
Part 5 for the small business property deduction during the three-year period following decedent’s death, I am personally responsible for filing and paying 
the recapture tax equal to the value (as allowed for federal estate tax purposes) of qualified property ceasing to satisfy the three-year holding period require-
ments, multiplied by 16%. The filing and payment due date is no later than six months from the date of the disqualifying cessation of the trade or business.
This schedule is correct and complete to the best of my knowledge and belief.

Name                                             Address                            City                                             State       Zip code

Signature of qualified heir                      Date                               Social Security number                           Phone number

Name                                             Address                            City                                             State       Zip code

Signature of qualified heir                      Date                               Social Security number                           Phone number

Name                                             Address                            City                                             State       Zip code

Signature of qualified heir                      Date                               Social Security number                           Phone number

Name                                             Address                            City                                             State       Zip code

Signature of qualified heir                      Date                               Social Security number                           Phone number
Executor: I agree and attest to the following:
I am the executor of the decedent’s estate.
Each and every qualified heir who acquired the qualified property or an interest in the qualified property described on Line 1, Parts 5 and 6 signed the agree-
ment above.
I, the executor, have exercised all due diligence on whether the decedent had applied for any tax programs with the County Assessor.
If any qualified heir or family member disposes of any interest in the qualified property described on Line 1, Parts 5 and 6, other than by a disposition to a 
family member, during the three-year period following decedent’s death, I hereby agree that the estate is liable for the payment of the recapture tax equal to 
the value (as allowed for federal estate tax purposes) of qualified property ceasing to satisfy the three-year holding period requirements, multiplied by 16%. 
The filing and payment due date is no later than six months from the date of the disqualifying disposition. Additionally, I understand that I am personally 
responsible for making arrangements for the filing of the recapture tax return and the payment of the recapture tax.
If a family member does not maintain the 2a classification for the qualified property described on Line 1, Part 6 for the farm property deduction or a family 
member does not materially participate in the operation of the trade or business described on Line 12, Part 3 for the qualified property described on Line 
1, Part 5 for the small business property deduction during the three-year period following decedent’s death, I hereby agree that the estate is liable for the 
payment of the recapture tax equal to the value (as allowed for federal estate tax purposes) of qualified property ceasing to satisfy the three-year holding 
period requirements, multiplied by 16%. The filing and payment due date is no later than six months from the date of the disqualifying cessation of the trade 
or business. Additionally, I understand that I am personally responsible for making arrangements for the filing of the recapture tax return and the payment of 
the recapture tax.
This schedule is correct and complete to the best of my knowledge and belief.

Name                                             Address                            City                                             State Zip code

Signature of executor                                                               Date                                              

A continuation page is provided after the instructions, if needed.

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2024 M706Q P4

Decedent’s first name, middle initial, last name Decedent’s Social Security number Executor’s first name, middle initial, last name Executor’s Social Security number

Part 5 — Deduction Calculation for Qualified Small Business Property
1 Value of assets. For each asset elected to be deducted from the decedent’s Minnesota adjusted taxable estate as qualified small business
property, provide a description, indicate the Schedule and item number from the Federal Form 706 where the asset is reported, and report
the asset’s fair market value at the valuation date.
Federal Schedule and Item Fair Market Value
Description of Asset (entity name and FEIN, if applicable) Number Where Reported At Valuation Date

Subtotal from additional sheets attached to this schedule, if any ..... ....... .... ....... ..... ...... ..... .....

Total value assets of ... ....... ..... ...... ..... ..... ...... ...... ...... ..... ...... ...... ...... ..... ... 1
2 Noneligible property. List property included on your Federal Form 706 and on line 1 above that is not
eligible for the qualified small business deduction (see instructions).
Value Included in Amount Not Allowed
Noneligible Property Federal Gross Estate in Deduction

Subtotal from additional sheets attached to this schedule, if any ..... ....... .... ....... ..... ...... ..... .....

Total amount not allowed in deduction ... ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... ..... 2

3 Federal allowable deductions. Report allowable deductions that are related to the assets included on line 1 above and indicate
the Schedule and item number from the Federal Form 706 where the allowable deduction is reported.
Federal Schedule and Item Amount Claimed as
Description of Deduction Number Where Reported a Deduction

Subtotal from additional sheets attached to this schedule, if any ..... ....... .... ....... ..... ...... ..... ......

Total allowable deductions .... ...... ...... ..... ..... ...... ...... ...... ..... ...... ...... ..... ...... ... 3

4line 2 andAdd line 3 . ...... ...... ..... ..... ....... ...... .... ...... ...... ..... ...... ...... ...... ..... 4

5 Tentative Deduction. Subtract line 4 from line 1. If you are also claiming a deduction for qualified farm
property, continue to Part 6. If not, continue to Part 7.. ... ...... ..... ....... ..... ...... ..... ..... ...... .... 5

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2024 M706Q P5

Decedent’s first name, middle initial, last name Decedent’s Social Security number Executor’s first name, middle initial, last name Executor’s Social Security number

Part 6 — Deduction Calculation for Qualified Farm Property
1 Value of assets. For each asset elected to be deducted from the decedent’s Minnesota adjusted taxable estate as qualified farm property,
provide a description, indicate the Schedule and item number from the Federal Form 706 where the asset is reported, and report the asset’s
fair market value at the valuation date.
Federal Schedule and Item Fair Market Value
Description of Asset (parcel ID number and legal description) Number Where Reported At Valuation Date

Subtotal from additional sheets attached to this schedule, if any . ..... ...... ..... ...... ...... ..... ...... ...

Total value assetsof ... ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... ..... ...... ..... ... 1

2 Noneligible property. List property included on your Federal Form 706 and on line 1 above that is not eligible for the qualified
farm property deduction (see instructions).
Value Included in Amount Not Allowed
Noneligible Property Federal Gross Estate in Deduction

Subtotal from additional sheets attached to this schedule, if any ..... ....... .... ....... ..... ...... ..... ....

Total amount not allowed in deduction ... ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... ... 2

Subtotal from additional sheets attached to this schedule, if any . ..... ...... ..... ...... ...... ..... ...... ...

Total allowable deductions ... ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... ..... ...... ... 3

4line Add and2 line .3 ..... ...... ..... ...... ..... ...... ...... ..... ...... ..... ...... ...... ...... ..... . 4

5 Tentative Deduction. Subtract from line 1.line 4 Continue to Part .....7 ....... .... ....... ..... ..... ...... .. 5

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2024 M706Q P6

Decedent’s first name, middle initial, last name                                                                                                           Decedent’s Social Security number  Executor’s first name, middle initial, last name Executor’s Social Security number  

Part 7 — Deduction Calculation for Qualified Small Business Property and Qualified Farm Property

  1Enter        the amount from Part 5, Line 5   . ..... ...... ..... ...... ...... ...... ..... ...... ..... ....... ..... ...                                                                                                                   1

  2Enter        the amount from Part 6, Line 5   . ..... ...... ..... ...... ...... ...... ..... ...... ..... ....... ..... ...                                                                                                                   2

  3line 1 andAdd           line 2  .. ..... ...... ..... ...... ....... ..... ..... ...... ..... ...... ...... ..... ...... .....                                                                                                                 3

  4  Enter the amount line 5from            M706...Form of ...... ..... ....... ..... ...... ..... ..... ...... ...... ...... .                                                                                                                   4

  5  Enter the amount line 6afrom               M706...Form of ...... ..... ....... ..... ...... ..... ..... ...... ...... ......                                                                                                                 5

  6  Subtract line 5 line 4 .from           . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                 6

  7  Enter the or 3 line ....6   lesser of line ....... ..... ...... ..... ...... ..... ...... ...... ..... ...... ...... ..                                                                                                                      7

 8                                 Deduction. Enter the line 7 $2,000,000.or lesser of       Also, enter the amount 6bline on              Form M706 ...of ...... ....                                                                            8

You must attach the following to the Form M706Q:
•                 Documentation demonstrating decedent’s or decedent’s spouse’s continuous ownership of the qualified property for the three-year period prior 
                to decedent’s death (deeds, titles, Federal Schedules K-1, etc.). NOTE: Property Tax Statements are not sufficient legal documentation.
•               A copy of the decedent’s will, trust, probate distribution ruling, transfer on death deed or other documentation that demonstrates to whom the 
                qualified property is distributed to upon death.
•               If the deducted property is qualified small business property, a complete copy of the decedent’s federal income tax return, schedules, and attach-
                ments for the three taxable years ending prior to the decedent’s death (including the taxable year of death).
•                 If the deducted property is qualified small business property, a complete copy of the business tax return, schedules, and attachments for the tax-
                able year prior to the decedent’s death.
•                 If the deducted property is qualified small business property, an explanation as to how the decedent materially participated in the qualified small 
                business in the taxable year prior to death.
•               If the deducted property is qualified farm property, a copy of the decedent’s property tax statements for the taxable year of death.

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