1. - CalCPA

Estate Tax Return – Nuts & Bolts November 13, 2019

Olympic Collection Banquet Hall and Conference Center 11301 Olympic Blvd., W. LA 90064

By: Lindsey Kernan, Esq. and Debra Reno

1. Introduction

a. Purpose of Form 706. The executor of a Decedent's estate uses Form 706 to calculate the estate tax imposed by Chapter 11 of the Internal Revenue Code, which is levied on the entire taxable estate. Form 706 is also used to calculate the generation-skipping transfer (GST) tax imposed by Chapter 13 on direct skips (transfers to skip persons of interests in property included in the Decedent's gross estate).

b. Which Estates Must File.

i. Filing Threshold. The Form 706 is required if the Decedent’s gross estate, as of the date of death, exceeds the IRC §2010(c) applicable exclusion amount in the year of the Decedent’s death (as reduced by the amount of the Decedent’s lifetime taxable gifts. See IRC §6018(a)(3)(A).).

Year Applicable Exclusion Amount 2011 $5,000,000 2012 $5,120,000 2013 $5,250,000 2014 $5,340,000 2015 $5,430,000 2016 $5,450,000 2017 $5,490,000 2018 $11,180,000 2019 $11,400,000

On January 1, 2026, the applicable exclusion amount is scheduled to revert to the 2017 levels ($5,000,000), adjusted for inflation.

ii. Estates Electing Portability. Regardless of whether a Decedent’s gross estate plus adjusted taxable gifts exceeds the applicable exclusion amount, any executor electing to transfer the Deceased Spousal Unused Exclusion (“DSUE”) to a Decedent’s surviving spouse must file the Form 706. (See IRS Form 706 Instructions for Part 6 and IRC §2010(c)(4) and (c)(5).)

c. Action Steps upon Engagement to Prepare Form 706

i. Information Gathering. It is important for the tax return preparer to begin gathering information early in the process. The preparer should work with the executor to obtain appropriate documentation relating to the Decedent’s assets and liabilities as of the date of death.

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Relevant documentation includes estate planning documents, records of assets (e.g., deeds, bank statements, brokerage statements, retirement plan statements, etc.) and liabilities (e.g., mortgage documentation, credit card statements, property tax information, etc.), and the past three years of income tax returns.

ii. Asset and Liability Valuation. The values reported on the Form 706 are the fair market values of assets and liabilities as of the date of the Decedent’s death. Often, determining date of death values requires obtaining qualified appraisals for real property, closely-held stock or other business interests, and obtaining date-of-death statements from financial institutions, mortgage lenders, etc.

iii. Compiling the Form 706, Attachments and Exhibits. Certain entries on the Form 706 require exhibits or other types of explanatory attachments. It is important to fulfill each of these obligations in order to submit a complete, accurate, and compliant estate tax return, thereby reducing the risk of an audit.

iv. Early Assessment of Whether Estate Tax Will be Owed. It is important to determine early on in the analysis whether there is likely an estate tax liability. If there is, the executor should be taking necessary steps to ensure the estate has liquidity to pay the tax by the due date.

v. Elections. Various elections can be made on the Form 706 that impact the amount and deadlines for paying the estate tax liability. Careful consideration needs to be given to each election.

2. Tax Return Filing and Estate Tax Payment Requirements and Deadlines:

a. Where to File. Effective July 1, 2019, Form 706 is to be filed in Kansas City, Missouri. Supplemental Forms 706 are to be filed in Florence, Kentucky.

b. What to File. The preparer must file the first three pages of Form 706 and only those schedules as needed to support entries made on Form 706, Part 5, Line 1–Line 22 (“Part 5—Recapitulation”) (except Schedule F, which must be attached even if no assets are reported). The Instructions to Form 706 state to place a “0” on a line if the gross estate does not contain any assets of the type specified on Form 706, Part 5, Line 1–Line 9.

c. Filing Deadline – 9 Months from Date of Death. The original due date of the Form 706 is 9 months from the Decedent’s date of death.

d. Automatic 6-Month Extension of Time to File – Form 4768. Often the investigative and document-gathering process take several months, and/or complex issues or assets are involved, and an extension of time to file is necessary. The executor can apply for an automatic 6-month extension of time to file the Form 706 by timely filing Form 4768, Application for Extension of Time To File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes. The Form 4768 must be filed no later than 9 months after the date of the Decedent’s death.

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e. Estate Tax Payment Deadline – 9 Months from Date of Death. Any estate tax (and GST tax) liability is due within 9 months of the date of the Decedent's death.

f. (Not Automatic!) Extension of Time to Pay – Form 4768. Form 4768 can also be used to apply for an extension of time to pay the estate tax. Unlike the request for an extension of time to file the Form 706, the request for an extension of time to pay the estate tax is not automatic. This application on Form 4768 must be filed within 9 months of the Decedent’s death. An executor can seek an extension of up to 12 months; however, the executor and tax return preparer must closely monitor the IRS’s response to this application. Often the IRS will only grant 6 months at a time, after which, if necessary, another extension request must be timely filed. A missed deadline subjects the estate to interest and late penalties for failure to timely pay. (Treas. Reg. §20.6081-1(e).)

It is critical to calendar the deadlines and be sure not to miss them!

3. Preparing the Form 706: Parts 1 through 6

a. Part 1 – Decedent and Executor. General information about the Decedent and Executor is entered in Part 1.

b. Part 2 – Tax Computation. In this Part, the computation of the estate tax liability is made. The Instructions to Form 706 contain detailed instructions for completing the required calculations. Form 706 software is also available to make these calculations for the tax return preparer.

c. Part 3 – Elections by the Executor

i. Line 1 - IRC § 2032: Alternate Valuation. An estate may choose to value all estate assets on a date 6 months after the date of death, but only if doing so reduces the value of the Decedent's gross estate and the sum of the estate tax and GST tax liability. The alternate valuation date provides relief to estates in which there is a decrease in the value of the Decedent's estate within 6 months following death. If the estate selects alternate valuation, the alternate valuation date must be used for all estate assets. Note that if property is sold or distributed during the six month period, that property should be valued as of the date of disposition.

ii. Line 2 – IRC § 2032A: Special Use Valuation. If the estate holds certain farm land or closely-held business real property, an election can be made under IRC § 2032A to value this property applying its actual use as opposed to valuing the property at its fair market value (highest and best use). For the election to be valid, Schedule A-1 and required attachments must be filed with the Form 706. Generally, qualification for this election requires the following: (1) the Decedent must be a U.S. Citizen; (2) the real property must be located in the United states; (3) as of the Decedent’s death, the property must have been in use by the Decedent or a family member for farming or in a trade or business; (4) the property must pass at the Decedent’s death to a qualified heir; (5) the Decedent or a family member owned and used the property in a qualified manner during 5 of the 8 years preceding the Decedent’s death; and (6) at least 50% of the adjusted value of the Decedent’s gross estate must consist of the qualified

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real or personal property, and at least 25% of the adjusted value of the gross estate must consist of the qualified farm or closely held business real property.

iii. Line 3 - IRC § 6166 Election to Pay Tax on Business Interests in Installments. If the estate holds closely held business interests, it may qualify for a deferral of estate tax attributable to that interest. This is an election under IRC § 6166. For the estate to qualify, (1) the Decedent must have been a U.S. citizen or resident at death; (2) the interest in a closely held business must comprise more than 35% of the Decedent’s adjusted gross estate; and (3) the executor must make a timely election on Form 706. If the timely election is made and the other elements are satisfied, the estate tax attributable to the closely held business may be deferred, with principal and interest on the deferred tax paid over a 14-year period. During the first five years following the due date of the return, only the interest on the deferred tax must be paid. Generally, interest will be charged on the balance of the deferred tax at 45% of the rate in effect for underpayments of tax. However, a special 2% interest rate applies to a portion of the deferred tax. If Line 3 is checked to make this election, the executor must attach a “notice of election” (see Treas. Reg. §20.6166-1(b) for details).

d. Line 4 - IRC § 6163 Election re Reversionary or Remainder Interests. If the Decedent held a reversionary or remainder interest at his or her death, the executor can elect under IRC § 6163 to postpone the part of the tax attributable to those interests for up to 6 months after the preceding interest terminates. The extension can be extended for reasonable cause for up to 3 years.

e. Part 4 – General Information. This following discussion does not cover each and every question posed in Part 4, but rather, highlights some of important questions for consideration.

i. Question 6 – Mark “yes” if the Executor is filing a protective claim for refund, and be sure to attach two copies of each Schedule PC (Protective Claim for Refund) for each claim.

ii. Question 7 – Mark “yes” if the estate contains any IRC § 2044 property (qualified terminable interest property), whereby a marital deduction was taken on a prior gift or estate tax return for property passing to the Decedent under a QTIP election.

iii. Question 8 - Mark “yes” if any Forms 709 (U.S. Gift Tax Returns) were filed on the Decedent’s behalf. If information as to past Forms 709 is not readily available to the executor, or simply to be thorough, the executor can requests copies of the Decedent’s gift tax transcripts from the IRS on Form 4506-T, Request for Transcript of Tax Return, followed by a request for copies of any returns determined to have been filed on Form 4506, Request for Copy of Tax Return.

Note the chance that Forms 709 should have been, but were not, filed by the Decedent during his or her lifetime. The executor should reasonably investigate the Decedent’s lifetime gifts to determine whether Forms 709 should be filed in conjunction with the Form 706.

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iv. Question 11, parts (a) and (b) focus on any interests that the Decedent held in closely-held businesses, and specifically asks, in 11(b), whether any such interest is discounted on the tax return. If Question 11(b) is marked “Yes,” the executor must attach a discount disclosure statement that sets forth the total accumulated discount taken on each such interest. Question 11 was likely added to the Form 706 to make it easier for the IRS to identify closely-held business interests, which valuations often contain lack of marketability and control discounts that are common subjects of challenge by the IRS on audit.

v. Question 15 - Mark “yes” if the Decedent held at death any interest in a foreign financial account or signatory authority over such an account.

f. Part 6 - Portability of Deceased Spousal Unused Exclusion (DSUE). An estate of a Decedent dying after 2010 can elect to transfer any unused applicable credit amount to the Decedent’s surviving spouse. The amount received by the surviving spouse is called the deceased spousal unused exclusion (“DSUE”) amount. By reason of this election, a surviving spouse can apply the DSUE amount against his or her own lifetime gifts and testamentary transfers.

i. Prior to the creation of “portability” in Section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, any of the Decedent’s applicable credit amount that remained unused after Decedent’s death was essentially lost. While this is insignificant in a situation where the surviving spouse does not himself or herself have assets of excess value than his or her own applicable credit amount, it was an unfortunate estate tax result for a surviving spouse whose assets do exceed his or her own applicable credit amount.

ii. Making the Election. Portability of the DSUE amount is elected in Part 6 of a timely filed Form 706 (including extensions). The timely filing of a complete Form 706 with DSUE will be deemed a portability election if there is a surviving spouse. Regardless of whether a Decedent’s gross estate plus adjusted taxable gifts exceeds the applicable exclusion amount, any executor electing to port the DSUE amount to a surviving spouse must file Form 706.

iii. Election is Irrevocable. A portability election is irrevocable, unless an adjustment or amendment to the election is made on a subsequent return filed on or before the due date.

iv. Opting Out of Portability. Part 6 allows an executor to opt out of portability of the DSUE amount. If an executor not otherwise required to file a Form 706 chooses not to so file, the election will not be considered as having been made.

v. Non-Resident Decedents. The executor of an estate of a nonresident decedent who was not a citizen of the United States at the time of death cannot make a portability election. (Treas. Regs. § 20.2010-2(a)(5).)

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4. Preparing the Form 706: The Schedules

a. Schedule A – Real Property

i. Assets Reportable on Schedule A: Schedule A should be included with the Form 706 if the Decedent owned at death any interest in real property, or had, at the time of death, contracted to purchase real property.

ii. Valuation Methodology: The executor should obtain and attach date-of death appraisals to the Form 706. Note that in valuing community property interests in real property, the value of the interest includible in the Decedent’s estate may not equal a pro rata 50% interest in the property. (See Propstra v. U.S., 680 F.2d 1248 (9th Cir. 1982).)

b. Schedule B – Stocks & Bonds

i. Assets Reportable on Schedule B: Schedule B must be filed as part of the Form 706 if the gross estate includes any stocks or bonds held in the Decedent’s name.

ii. Description of Asset: The instructions to Form 706 provide that each stock description should include (1) the number of shares, (2) whether common or preferred; (3) issue; (4) par value where needed for identification; (5) price per share; (6) name of corporation; (7) principal exchange where traded, if applicable; and (8) the CUSIP number, if applicable.

A bond description should include the following: (1) the quantity and denomination; (2) the obligor's name; (3) the date of maturity; (4) the interest rate; (5) the interest due date; (6) the principal exchange, if listed on an exchange; and (7) the CUSIP number.

iii. Valuation: Stocks and bonds are listed at fair market value, which is the mean between the highest and lowest selling prices quoted on the date of Decedent’s death. Treas. Regs. § 20.2031-2(b) provides alternate valuation methods in the event this data is not available for the date of Decedent’s death.

iv. Valuing Community Property Interests: Estate of Bright, 658 F.2d 999 (5th Cir. 1981); Estate of Lee v. Commissioner, 69 TC 860 (1978).

c. Schedule C – Mortgages, Notes & Cash

i. Assets Reportable on Schedule C: Schedule C must be filed as part of Form 706 if the gross estate contains any mortgages, promissory notes, cash in hand, or cash in banks, savings and loan associations, and other financial organizations in the Decedent's name. Note that Schedule C is used to report mortgages and promissory notes payable to the Decedent and not those payable by the Decedent.

ii. Description of Assets.

1. Mortgages and Promissory Notes Payable to Decedent. The Instructions to Form 706 state that for mortgages and promissory notes, the executor should list

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the following information: (a) face value; (b) unpaid balance; (c) date of mortgage/promissory note; (d) name of maker; (e) property mortgaged (if applicable); (f) date of maturity; (g) interest rate; and (h) interest date.

2. Cash in banks, savings and loan associations, and other types of financial organizations. For cash in accounts at financial institutions, the executor should list the following information: (a) name and address of the financial organization; (b) the amount in the account; (c) the serial or account number; (d) the nature of account—checking, savings, time deposit, etc.; and (e) unpaid interest accrued from date of last interest payment to the date of Decedent’s death.

3. Cash on Hand. List cash separately from bank deposits.

d. Schedule D – Life Insurance

i. Assets Reportable on Schedule D: Schedule D must be filed as part of Form 706 to report any insurance on the Decedent's life, whether or not includible in the gross estate. The gross estate includes insurance on the Decedent’s life under which either the estate is the designated beneficiary, and under which others are the designated beneficiary if the Decedent possessed any incidents of ownership over the policy. (IRC § 2042.) In addition, insurance under which the proceeds are payable for the benefit of the estate is includible in the gross estate and reported on Schedule D. Insurance in favor of the estate includes insurance the proceeds of which are required to be used to pay the estate tax, or any other taxes, debts, or charges that are enforceable against the estate.

ii. Incidents of Ownership. Insurance proceeds on the Decedent’s life not receivable by, or for the benefit of, the Decedent's estate are still includible if the Decedent possessed incidents of ownership, exercisable either alone or in conjunction with any person or entity, over the policy. Incidents of ownership include the following.

• The right of the insured or estate to its economic benefits. • The power to change the beneficiary. • The power to surrender or cancel the policy. • The power to assign the policy or to revoke an assignment. • The power to pledge the policy for a loan. • The power to obtain from the insurer a loan against the policy’s surrender value. • A reversionary interest (e.g., where proceeds become payable to the insured's

estate or as the insured directs if the designated beneficiary dies before the death of the insured) if the value of the reversionary interest was more than 5% of the value of the policy immediately before the Decedent died.

iii. Description of Asset. Under “Description,” list the name of the insurance

company and the policy number.

iv. Valuation. If the policy proceeds are paid in one sum, enter the net proceeds received (from Form 712, line 24) in the value (and alternate value) columns of

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Schedule D. If the policy proceeds are not paid in one sum, enter the value of the proceeds as of the date of the Decedent's death (from Form 712, line 25).

Note: For all life insurance policies on the Decedent’s life, early on in the process the executor should request from the life insurance company a Form 712, which provides the information needed to complete Schedule D and is required to be attached to Schedule D.

e. Schedule E – Jointly Held Property

i. Assets Reportable on Schedule E. The assets reportable on Schedule E are those in which the Decedent and one or more additional parties owned property as joint tenants with right of survivorship. This means assets otherwise reportable on another Schedule as to type of asset (e.g., real property on Schedule A) are instead reported on Schedule E if the right of survivorship applies.

ii. Description of Asset. The same descriptions of the assets reportable on other Schedules should be used for Schedule E.

iii. Valuation.

1. Property Held Jointly with Spouse. Any joint tenancy property held by the Decedent and his or her U.S. citizen spouse is reported on Schedule E, Part 1. While the full fair market value of the property is reported in this Part 1, only one-half the value of the property is includible in the Decedent’s gross estate for estate tax purposes. IRC § 2040(b). Of course, that one-half interest, which passes to the surviving spouse via the right of survivorship, qualifies for the marital deduction. (IRC § 2056.)

2. Property Held Jointly with a Non-Spouse. Any joint tenancy property held by the Decedent and a non-spouse is reported on Schedule E, Part 2. The rules presume that the full fair market value of the property is includible in the Decedent’s gross estate. This presumption may be overcome as to all or a portion of the property by establishing that the purchase price or other contributions were made by the other joint tenants. (IRC § 2040(a).)

iv. Basis Adjustment for Joint Tenancy Property versus Community Property. Note that for joint tenancy property, only the Decedent’s interest in the property obtains a basis adjustment under IRC § 1014. The interest of the surviving spouse or other tenants is not adjusted. This is different than property held by spouses as community property, in which case both spouses’ interests qualify for the basis adjustment. (IRC § 1014(a)(6).)

f. Schedule F – Miscellaneous Property

i. Note: Schedule F must be included as part of Form 706 even if no assets are reported on it.

ii. Assets Reportable on Schedule F. All assets of the gross estate that are not reportable on other schedules are reportable on Schedule F. Categories of assets reported on Schedule F include the following:

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1. Tangible personal property: clothing, jewelry, artwork, collections, cars, boats, furnishings, furniture, etc.

2. Business interests: membership interests in LLCs, interests of a general or limited partner in a partnership, etc.

3. Income tax refunds (both state and federal) due (but unpaid) to Decedent as of his or her death.

4. Digital assets (e.g., cryptocurrency).

5. Litigation claims belonging to the Decedent or in which the Decedent had an interest at death.

6. IRC § 2044 property.

7. Right of publicity.

8. Patents, copyrights, trademarks.

9. Mineral royalties.

10. IRAs and other non-annuity retirement plans

iii. Valuation. These assets are to be reported at fair market value (as defined in Treas. Reg. § 20.2031-1(b)). Many of these assets will need to be appraised by appraisers qualified to value the particular type of asset involved.

g. Schedule G – Inter Vivos Transfers

i. Reportable Transfers. The purpose of Schedule G is to report lifetime transfers by the Decedent described in IRC §2035 (certain transfers within three years of death), §2036 (transfers with retained life estates), §2037 (transfers taking effect at death), and §2038 (revocable transfers).

ii. IRC § 2035 – Transfers within Three Years of Death.

1. IRC § 2035(b) - Gift Tax Paid on Gifts Made Within Three Years of Death. In Item A of Schedule G, the executor must report the total gift taxes paid by the Decedent or executor on gifts made by the Decedent and/or his or her spouse, within 3 years of the Decedent’s death. (IRC § 2035(b).) If the Decedent elected to split gifts with his or her spouse on any of the relevant gift tax returns, only the tax paid by the Decedent is included on Schedule G, Item A.

2. IRC § 2035(a) - Other Transfers Within Three Years of Death. Other reportable transfers within 3 years of death include the following. (a) any transfer by the Decedent with respect to a life insurance policy within 3 years of death; and (b) any transfer of a retained IRC § 2036 life estate, IRC § 2037 reversionary interest, or IRC § 2038 power to

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revoke, if the property subject to the life estate, interest, or power would have been included in the gross estate had the Decedent continued to possess such interest or power at death.

iii. IRC § 2036 – Transfers With Retained Interests. Any transfer made by the Decedent in which the Decedent retained an interest in the transferred property (other than sales for adequate and full considerations) is includible in the Decedent’s gross estate under IRC § 2036 and reported on Schedule G. Section 2036 applies to the following retained interests or rights: (1) the right to income from the transferred property; (2) the right to the possession or enjoyment of the property; (3) the right, either alone or with any person, to designate the persons who shall receive the income from, possess, or enjoy, the property.

iv. IRC § 2037 – Transfers Taking Effect at Death. Transfers that take effect at the Decedent's death are reported on Schedule G if possession or enjoyment of the transferred property is obtained only by surviving the decedent and at the Decedent’s death, the Decedent retained and held at death a reversionary interest that was valued at more than 5% of the value of the transferred property. A reversionary interest is, generally, any right under which the transferred property will or may be returned to the decedent or the decedent's estate.

v. IRC § 2038 - Decedent’s Revocable Trust. A Decedent’s revocable trust should be reported on Schedule G. The assets contained within the trust at Decedent’s death can be reported as part of Schedule G, or on other appropriate Schedules based on asset type along with an indication that the trust assets are being so reported.

h. Schedule H – Powers of Appointment. Schedule H must be filed with the Form 706 if the Decedent possessed a general power of appointment as of his or her death. A general power of appointment is a power exercisable in favor of the Decedent, the Decedent's estate, the Decedent's creditors, or the creditors of the Decedent's estate, except the following: (1) a power to consume, invade, or appropriate property for the benefit of the Decedent that is limited by an ascertainable standard relating to health, education, support, or maintenance of the decedent; and (2) a power exercisable by the Decedent only in conjunction with: (a) the creator of the power; or (b) a person who has a substantial interest in the property subject to the power, which is adverse to the exercise of the power in favor of the Decedent. (IRC § 2041.)

i. Schedule I – Annuities. All annuities in which the Decedent had an interest must be reported on Schedule I.

i. In general, an annuity must be reported if: (1) It is receivable by a beneficiary following the death of the Decedent and by reason of surviving the Decedent; and (2) The annuity was payable to the Decedent (or the Decedent possessed the right to receive the annuity) either alone or in conjunction with another, for the Decedent's life or for any period not ascertainable without reference to the Decedent's death or for any period that did not in fact end before the Decedent's death.

ii. Assets Reportable. Annuities reported on Schedule I include all types of annuities, including pension plans, purchased commercial annuities, and private annuities. In addition, lottery payments due to a Decedent at death and that continue for his or her successors

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are considered an annuity reportable on Schedule I. Moreover, an IRA that is payable after Decedent’s death to another individual in the form of an annuity is reportable on Schedule I.

iii. Amount Includible. Only if annuity payments continue to a beneficiary after the decedent's death is an annuity or portion thereof includible on Schedule I. If the Decedent contributed only part of the purchase price of the contract or agreement, only the part of the value of the annuity receivable by the surviving beneficiary that the Decedent's contribution to the purchase price of the annuity or agreement bears to the total purchase price is included in the gross estate. (IRC § 2039(b); Treas. Reg. §20.2039-1(c).) Thus, if the value of the survivor's annuity was $200,000 and the Decedent had contributed 75% of the purchase price, the amount includible is: 0.75 × $200,000 = $150,000.

j. Schedule J – Funeral and Administrative Expenses

i. Funeral Expenses. Funeral expenses are deductible for estate tax purposes (but not for income tax purposes) and should be itemized on Line A of Schedule J. See Treas. Reg. § 20.2053-2 for a description of deductible expenses. Note that to the extent any of the funeral expenses were reimbursed to the estate or covered by insurance, they are not deductible.

ii. Administrative Expenses. Administrative expenses are those that are actually and necessarily incurred in the collection of assets, payment of debts, and distribution of property. (Treas. Reg. § 20.2053-3.) Deductible expenses include executor commissions, attorneys’ fees, accountant and appraisal fees, probate court and related costs, and costs of storing or maintaining the assets of the estate. Expenses of selling estate assets are deductible if the sale was necessary to pay taxes, debts, expenses or to effect an orderly distribution of the estate. The deductions are limited to the amount paid for the expenses that is allowable under local law. For expenses incurred but not paid at the time the Form 706 is filed, the amount is deductible so long as the amount to be paid is ascertainable with reasonable certainty and will be paid. (Treas. Reg. §20.2053-1(d)(4).)

iii. Schedule PC. For expenses that are not presently deductible under IRC § 2053 at the time the Form 706 is due, the expense can be reported on Schedule J, with a $0 value, and a protective claim for refund of the expense can be submitted on Schedule PC.

iv. Choosing to Deduct on the Form 706 versus the Form 1041. Certain estate administration expenses may qualify as being deductible either under IRC §2053 for estate tax purposes and, for example, IRC § 212 for income tax purposes. These expenses can only be deducted on either the Form 706 or the Form 1041 (U.S. Income Tax Return for Estate and Trusts), and IRC § 642(g) requires the tax return preparers to elect on which form the expenses will be deducted. The decision requires careful consideration by the estate’s fiduciaries and advisors. Note that funeral expenses are only deductible on Form 706.

k. Schedule K – Debts of the Decedent

i. All debts of the Decedent existing as of his or her death are deductible expenses reported on Schedule K. If the amount of the debt is disputed or the subject of litigation, only the amount the estate concedes to be a valid claim should be deducted. To be deductible, any claim against a Decedent's estate must represent a personal obligation of the

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Decedent, existing at the Decedent’s death, that is bona fide and enforceable against the Decedent's estate; and, the expense must be actually paid by the estate. (Treas. Reg. §20.2053-1(d)(4).)

ii. Examples of Reportable Debts. Examples of debts reportable on Schedule K are as follows:

1. Mortgages and liens on the Decedent’s property;

2. Date of death credit card balances;

3. Decedent’s bills (electricity, TV, phone, etc.) to the extent due and unpaid at death;

4. The Decedent’s medical expenses accrued but unpaid prior to death;

5. Property taxes accrued before the date of the Decedent’s death; and

6. Federal and state income taxes on income received by the Decedent during his or her lifetime.

iii. Income and Estate Tax Deduction for Certain Debts. Taxes, interest, and business expenses accrued at the date of the Decedent's death are deductible both on Schedule K and as deductions in respect of the Decedent on the income tax return of the estate.

iv. Schedule PC. For debts that are not presently deductible under IRC § 2053 at the time the Form 706 is due, the expense can be reported on Schedule K, with a $0 value, and a protective claim for refund of the expense can be submitted on Schedule PC.

l. Schedule L – Losses and Non-Claim Expenses.

i. Losses. Losses from thefts, fires, storms, shipwrecks, or other casualties occurring during settlement of the estate are deductible on Schedule L. Of course, losses reimbursed by insurance are not deductible. (See IRC § 2054 and Treasury Regulations thereunder.) The estate may choose to deduct the loss on either the Form 706 or on a Form 1041 and the determination as to which choice produces the better tax benefit should be analyzed.

ii. Expenses Not Subject to Claims. Expenses incurred to administer property not subject to claims (i.e., non-probate assets such as property held as joint tenants with right of survivorship, life insurance policies and other assets that pass by beneficiary designation as opposed to by the terms of the Decedent’s will) are deductible on Schedule L. To be a deductible expense, it must meet the following requirements: (a) the expense would have been deductible had the property been subject to probate administration; and (b) the expense must be paid before the SOL expires. (Treas. Reg. §20.2053-8.)

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m. Schedule M – Bequests to the Surviving Spouse (Marital Deduction

i. A marital deduction is authorized by IRC § 2056 for property that passes from the Decedent to his or her surviving spouse. Any marital deduction property is reported on Schedule M.

ii. Outright Bequests to Surviving Spouse Property that passes outright to the surviving spouse qualifies for the marital deduction and is reported on Schedule M, Part B.

iii. QTIP Election. Generally, property passing to a surviving spouse that constitutes a “terminable interest” does not qualify for the marital deduction. A “terminable interest” is an interest that will terminate or fail after the passage of time, or on the occurrence or nonoccurrence of a designated event, such as a life estate or term of years. However, the executor may elect to claim a marital deduction for qualifying terminable interests on Schedule M, Part A. Qualified terminable interest property is property (1) that passes from the Decedent, (2) in which the surviving spouse has a qualifying income interest for life, and (c) for which the QTIP election under IRC § 2056(b)(7) is made. By completing Part A, the executor is presumed to have made the QTIP election, and the election is irrevocable. Note that upon the surviving spouse’s death, the value of the QTIP at that time is includible in his or her gross estate under IRC § 2044.

iv. Marital Deduction for Non-Citizen Spouses: Qualified Domestic Trusts. If a Decedent’s surviving spouse is not a U.S. citizen, the marital deduction is allowed for transfers to the surviving spouse only if the property passes to a QDOT or if the property is transferred to a QDOT before the Decedent's estate tax return is filed. A QDOT is any trust: (1) that requires at least one trustee to be either a citizen of the United States or a domestic corporation; (2) that requires that no distribution of corpus from the trust can be made unless such a trustee has the right to withhold from the distribution the tax imposed on the QDOT; (3) that meets the requirements of any applicable regulations; and (4) for which the executor has made an election on the Decedent’s estate tax return.

n. Schedule O – Charitable Deduction. Under IRC § 2055, an estate tax deduction is permitted for assets passing to charity either outright or in a qualifying split interest trust (i.e., charitable lead trusts and charitable remainder trusts). These interests are reported on Schedule O. Note that where the interest passing to charity is required under the testamentary instrument to bear any share of the estate tax liability, the amount of the charitable deduction is reduced by the amount of the tax. This results in the need for an interrelated calculation in order to calculate the charitable deduction and the estate tax liability (given that, as the charitable deduction goes down, the estate tax liability goes up). (See IRC § 2055(c) and Treas. Reg. § 20.2055-3(a).)

o. Schedule P – Credit for Foreign Death Taxes. A credit is permitted on Form 706 for estate or other death taxes paid to a foreign country in respect of property located in that country and includible in the Decedent’s gross estate. The credit is allowable only if the Decedent was a citizen or resident of the United States. (See IRC § 2014.)

p. Schedule Q – Credit for Tax on Prior Transfers. Under IRC § 2013, the estate is credited with any estate tax paid with respect to the transfer of property (including property

14

passing as a result of the exercise or non-exercise of a power of appointment) to the Decedent by or from a person (a “transferor”) who died within 10 years before, or within 2 years after, the Decedent’s death. The maximum amount of the credit is the smaller of: (1) the amount of the estate tax of the transferor's estate attributable to the transferred property, or (2) the amount by which: (a) an estate tax on the transferee's estate determined without the credit for tax on prior transfers exceeds (b) an estate tax on the transferee's estate determined by excluding from the gross estate the net value of the transfer. Once this is determined, the credit applies on a graduated scale depending on the amount of time that has passed from the death of the prior transferor. A worksheet for Schedule Q is provided to calculate the limits.

q. Schedule R – Generation-Skipping Transfer Tax. The purpose of Schedule R is to reflect the generation-skipping transfer (GST) tax payable by the estate. The purpose of Schedule R-1 is to reflect the GST tax payable by certain trusts includible in the gross estate.

i. Imposition of the GST Tax; GST Exemption. The GST tax is imposed on the value of property that passes to certain transferees that fall within the definition of “skip persons.” The Decedent has during life and upon death an available GST exemption to apply against transfers subject to the GST tax. (IRC § 2631.) Part of Schedule R is to reconcile all prior allocations of GST exemption used by the Decedent during lifetime, in order to determine the amount of exemption remaining for allocation to Decedent’s testamentary transfers.

ii. Direct Skips, Taxable Distributions, and Taxable Terminations. Skip persons include individuals who are either more than one generation below that of the Decedent or, if not related to the Decedent, who are at least 37 1/2 years younger than the Decedent. Additionally, trusts having only skip persons as beneficiaries are considered skip persons. Outright bequests to skip persons (called “direct skips”) are subject to the GST tax as of the date of death. Bequests to trusts qualifying as “skip persons” are subject to the GST tax as of the date of death. For trusts that are not skip persons, GST tax is imposed on “taxable distributions,” which are distributions from the trust to beneficiaries who are skip persons relative to the Decedent. In addition, GST tax is imposed on “taxable terminations,” which occur when an interest in a trust terminates, leaving only skips persons as the remaining trust beneficiaries.

iii. Reverse QTIP Election. If the Decedent’s remaining GST exemption exceeds his or her applicable credit amount applied to fund a bypass trust, the executor may make a special QTIP election to reap the benefit of the excess GST exemption not allocated to the bypass trust. Under IRC §2652(a)(3), the executor can elect to treat QTIP, solely for purposes of the GST tax, as if the QTIP election had not been made. The result of this reverse QTIP election is that upon the surviving spouse’s death, he or she is not treated as the transferor of the QTIP; rather, the Decedent is treated as the transferor, which allows the use of the Decedent’s GST exemption to all or a portion of the QTIP assets. It is common that the Decedent’s remaining GST exemption is only sufficient to exempt some, but not all, of the QTIP trust assets from GST tax; however, a reverse QTIP election is only permitted with respect to the entirety of a QTIP trust. As a result, typically the QTIP trust will be severed into both a GST-Exempt QTIP Trust, and a GST Non-Exempt QTIP Trust, and the reverse QTIP election is made only with respect to the GST-Exempt QTIP Trust. (See Treas. Reg. § 26.2652-2.)

15

5. Basis Consistency Rules; Form 8971. Within 30 days of the extended due date of the Form 706, the executor must file Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, with the IRS, along with a Schedule A to Form 8971 for each beneficiary receiving assets from the estate. Each of the beneficiaries is required to receive from the executor a Schedule A reflecting the property receivable by the respective beneficiary. This is to satisfy the requirement that estates report to the IRS and the beneficiaries the estate tax value of each asset of the gross estate. (See IRC § 6035.) The basis of certain assets when sold or otherwise disposed of must be consistent with the basis (estate tax value) of the asset when it was received by the beneficiary.

6. Penalties

a. Late filing and late payment. IRC § 6651 imposes penalties for late filing and for late payment without reasonable cause.

b. Valuation Understatements. IRC § 6662 imposes a 20% penalty for the underpayment of estate tax that exceeds $5,000 when the underpayment is attributable to valuation understatements. A valuation understatement occurs when the value of property reported on Form 706 is 65% or less of the actual value of the property. This penalty increases to 40% if there is a gross valuation understatement, which occurs if any property on the return is valued at 40% or less of the value determined to be correct. Penalties also apply to late filing, late payment, and underpayment of GST taxes.

c. Return Preparer Penalties. Estate tax return preparers who prepare any return or claim for refund which reflects an understatement of tax liability due to an unreasonable position are subject to a penalty equal to the greater of $1,000 or 50% of the income earned (or to be earned). Estate tax return preparers who prepare a return or claim for refund which reflects an understatement of tax liability due to willful or reckless conduct are subject to a penalty of $5,000 or 75% of the income earned (or income to be earned), whichever is greater, for the preparation of each such return. (See IRC §§ 6694(a) and 6694(b) and related Treasury Regulations.)

Form 56 (Rev. November 2017)Department of the Treasury Internal Revenue Service

Notice Concerning Fiduciary Relationship▶ Go to www.irs.gov/Form56 for instructions and the latest information.

(Internal Revenue Code sections 6036 and 6903)

OMB No. 1545-0013

Part I Identification

Name of person for whom you are acting (as shown on the tax return) Identifying number Decedent’s social security no.

Address of person for whom you are acting (number, street, and room or suite no.)

City or town, state, and ZIP code (If a foreign address, see instructions.)

Fiduciary’s name

Address of fiduciary (number, street, and room or suite no.)

City or town, state, and ZIP code Telephone number (optional)

( )

Section A. Authority

1 Authority for fiduciary relationship. Check applicable box: a Court appointment of testate estate (valid will exists) b Court appointment of intestate estate (no valid will exists)c Court appointment as guardian or conservatord Valid trust instrument and amendments e Bankruptcy or assignment for the benefit or creditors f Other. Describe ▶

2 a If box 1a or 1b is checked, enter the date of death ▶

b If box 1c—1f is checked, enter the date of appointment, taking office, or assignment or transfer of assets ▶

Section B. Nature of Liability and Tax Notices

3 Type of taxes (check all that apply): Income Gift Estate Generation-skipping transfer Employment Excise Other (describe) ▶

4 Federal tax form number (check all that apply): a 706 series b 709 c 940 d 941, 943, 944 e 1040, 1040-A, or 1040-EZ f 1041 g 1120 h Other (list) ▶

5 If your authority as a fiduciary does not cover all years or tax periods, check here . . . . . . . . . . . . . ▶

and list the specific years or periods ▶

For Paperwork Reduction Act and Privacy Act Notice, see separate instructions. Cat. No. 16375I Form 56 (Rev. 11-2017)

Form 56 (Rev. 11-2017) Page 2

Part II Revocation or Termination of Notice

Section A—Total Revocation or Termination6 Check this box if you are revoking or terminating all prior notices concerning fiduciary relationships on file with the Internal

Revenue Service for the same tax matters and years or periods covered by this notice concerning fiduciary relationship ▶

Reason for termination of fiduciary relationship. Check applicable box:a Court order revoking fiduciary authorityb Certificate of dissolution or termination of a business entity c Other. Describe ▶

Section B—Partial Revocation7 a Check this box if you are revoking earlier notices concerning fiduciary relationships on file with the Internal Revenue Service

for the same tax matters and years or periods covered by this notice concerning fiduciary relationship . . . . . . ▶

b Specify to whom granted, date, and address, including ZIP code.▶

Section C—Substitute Fiduciary8 Check this box if a new fiduciary or fiduciaries have been or will be substituted for the revoking or terminating fiduciary and

specify the name(s) and address(es), including ZIP code(s), of the new fiduciary(ies) . . . . . . . . . . . . ▶

▶

Part III Court and Administrative Proceedings

Name of court (if other than a court proceeding, identify the type of proceeding and name of agency) Date proceeding initiated

Address of court Docket number of proceeding

City or town, state, and ZIP code Date Time a.m.

p.m.

Place of other proceedings

Part IV Signature

Please Sign Here

I certify that I have the authority to execute this notice concerning fiduciary relationship on behalf of the taxpayer.

▲

Fiduciary’s signature Title, if applicable Date

Form 56 (Rev. 11-2017)

Form 706(Rev. August 2019)

Department of the Treasury Internal Revenue Service

United States Estate (and Generation-Skipping Transfer) Tax Return

▶ Estate of a citizen or resident of the United States (see instructions). To be filed for decedents dying after December 31, 2018.

▶ Go to www.irs.gov/Form706 for instructions and the latest information.

OMB No. 1545-0015

Par

t 1—

Dec

eden

t an

d E

xecu

tor

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

3a City, town, or post office; county; state or province; country; and ZIP or foreign postal code

3b Year domicile established 4 Date of birth 5 Date of death

6a Name of executor (see instructions)

6b Executor’s address (number and street including apartment or suite no.; city, town, or post office; state or province; country; and ZIP or foreign postal code) and phone no.

Phone no.

6c Executor’s social security number (see instructions)

6d If there are multiple executors, check here and attach a list showing the names, addresses, telephone numbers, and SSNs of the additional executors.

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

8 If decedent died testate, check here ▶ and attach a certified copy of the will. 9 If you extended the time to file this Form 706, check here ▶

10 If Schedule R-1 is attached, check here ▶ 11 If you are estimating the value of assets included in the gross estate on line 1 pursuant to the special rule of Reg. section 20.2010-2(a)(7)(ii), check here ▶

Par

t 2—

Tax

Co

mp

utat

ion

1 Total gross estate less exclusion (from Part 5—Recapitulation, item 13) . . . . . . . . . . 1

2 Tentative total allowable deductions (from Part 5—Recapitulation, item 24) . . . . . . . . . 2

3a Tentative taxable estate (subtract line 2 from line 1) . . . . . . . . . . . . . . . . 3a

b State death tax deduction . . . . . . . . . . . . . . . . . . . . . . . 3b

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

4 Adjusted taxable gifts (see instructions) . . . . . . . . . . . . . . . . . . . 4

5 Add lines 3c and 4 . . . . . . . . . . . . . . . . . . . . . . . . . 5

6 Tentative tax on the amount on line 5 from Table A in the instructions . . . . . . . . . . 6

7 Total gift tax paid or payable (see instructions) . . . . . . . . . . . . . . . . . 7

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

9a Basic exclusion amount . . . . . . . . . . . . . . . 9a

b

Deceased spousal unused exclusion (DSUE) amount from predeceased spouse(s), if any (from Section D, Part 6—Portability of Deceased Spousal Unused Exclusion) 9b

c Restored exclusion amount (see instructions) . . . . . . . . 9c

d Applicable exclusion amount (add lines 9a, 9b, and 9c) . . . . . 9d

e

Applicable credit amount (tentative tax on the amount in line 9d from Table A in the instructions) . . . . . . . . . . . . . . 9e

10 Adjustment to applicable credit amount (May not exceed $6,000. See instructions.) . . . . . . . . . . . . . . . . . . 10

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

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

13 Credit for foreign death taxes (from Schedule P). (Attach Form(s) 706-CE.) 13

14 Credit for tax on prior transfers (from Schedule Q) . . . . . . . 14

15 Total credits (add lines 13 and 14) . . . . . . . . . . . . . . . . . . . . . 15

16 Net estate tax (subtract line 15 from line 12) . . . . . . . . . . . . . . . . . . 16

17 Generation-skipping transfer (GST) taxes payable (from Schedule R, Part 2, line 10) . . . . . . 17

18 Total transfer taxes (add lines 16 and 17) . . . . . . . . . . . . . . . . . . . 18

19 Prior payments (explain in an attached statement) . . . . . . . . . . . . . . . . 19

20 Balance due (or overpayment) (subtract line 19 from line 18) . . . . . . . . . . . . . 20Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than the executor) is based on all information of which preparer has any knowledge.

Sign Here

▲

Signature of executor

▲

Date▲

Signature of executor

▲

Date

Paid Preparer Use Only

Print/Type preparer’s name Preparer’s signature Date Check if self-employed

PTIN

Firm’s name ▶

Firm’s address ▶

Firm’s EIN ▶

Phone no.

For Privacy Act and Paperwork Reduction Act Notice, see instructions. Cat. No. 20548R Form 706 (Rev. 8-2019)

Form 706 (Rev. 8-2019)

Estate of:Decedent’s social security number

Part 3—Elections by the ExecutorNote: For information on electing portability of the decedent’s DSUE amount, including how to opt out of the election, see Part 6—

Portability of Deceased Spousal Unused Exclusion. Note: Some of the following elections may require the posting of bonds or liens. Yes NoPlease check “Yes” or “No” for each question. See instructions.

1 Do you elect alternate valuation? . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2 Do you elect special-use valuation? If “Yes,” you must complete and attach Schedule A-1 . . . . . . . . . . 2

3

Do you elect to pay the taxes in installments as described in section 6166? . . . . . . . . . . . . . . . If “Yes,” you must attach the additional information described in the instructions. Note: By electing section 6166 installment payments, you may be required to provide security for estate tax deferred under section 6166 and interest in the form of a surety bond or a section 6324A lien. 3

4 Do you elect to postpone the part of the taxes due to a reversionary or remainder interest as described in section 6163? . 4

Part 4—General InformationNote: Please attach the necessary supplemental documents. You must attach the death certificate. See instructions.

Authorization to receive confidential tax information under Reg. section 601.504(b)(2)(i); to act as the estate’s representative before the IRS; and to make written or oral presentations on behalf of the estate:

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

I declare that I am the attorney/ certified public accountant/ enrolled agent (check the applicable box) for the executor. I am not undersuspension or disbarment from practice before the Internal Revenue Service and am qualified to practice in the state shown above.

Signature CAF number Date Telephone number

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

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

3a Marital status of the decedent at time of death:

Married Widow/widower Single Legally separated Divorced

3 b

For all prior marriages, list the name and SSN of the former spouse, the date the marriage ended, and whether the marriage ended by annulment, divorce, or death. Attach additional statements of the same size if necessary.

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

5

Individuals (other than the surviving spouse), trusts, or other estates who receive benefits from the estate (do not include charitable beneficiaries shown in Schedule O) (see instructions).

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

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

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

If you answer “Yes” to any of the following questions, you must attach additional information as described. Yes No6 Is the estate filing a protective claim for refund? . . . . . . . . . . . . . . . . . . . . . . . .

If “Yes,” complete and attach two copies of Schedule PC for each claim.

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

8 a Have federal gift tax returns ever been filed? . . . . . . . . . . . . . . . . . . . . . . . . . If “Yes,” attach copies of the returns, if available, and furnish the following information.

b Period(s) covered c Internal Revenue office(s) where filed

9a Was there any insurance on the decedent’s life that is not included on the return as part of the gross estate? . . . . . .

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

Page 2

Form 706 (Rev. 8-2019)


Part 4—General Information (continued)If you answer “Yes” to any of the following questions, you must attach additional information as described. Yes No

10

Did the decedent at the time of death own any property as a joint tenant with right of survivorship in which (a) one or more of the other joint tenants was someone other than the decedent’s spouse, and (b) less than the full value of the property is included on the return as part of the gross estate? If “Yes,” you must complete and attach Schedule E . . . . . . . . . . .

11 a Did the decedent, at the time of death, own any interest in a partnership (for example, a family limited partnership), an unincorporated business, or a limited liability company; or own any stock in an inactive or closely held corporation? . . . .

b If “Yes,” was the value of any interest owned (from above) discounted on this estate tax return? If “Yes,” see the instructions on reporting the total accumulated or effective discounts taken on Schedule F or G . . . . . . . . . . . . . .

12 Did the decedent make any transfer described in sections 2035, 2036, 2037, or 2038? See instructions. If “Yes,” you must complete and attach Schedule G . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13a Were there in existence at the time of the decedent’s death any trusts created by the decedent during his or her lifetime? . .

b Were there in existence at the time of the decedent’s death any trusts not created by the decedent under which the decedent possessed any power, beneficial interest, or trusteeship? . . . . . . . . . . . . . . . . . . . . .

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

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

d If there was a GST taxable termination (under section 2612), attach a statement to explain. Provide a copy of the trust or will creating the trust, and give the name, address, and phone number of the current trustee(s).

e

Did the decedent at any time during his or her lifetime transfer or sell an interest in a partnership, limited liability company, or closely held corporation to a trust described in line 13a or 13b? . . . . . . . . . . . . . . . . . . .

If “Yes,” provide the EIN for this transferred/sold item. ▶

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

15 Did the decedent have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account, or other financial account? . . . . . . . . . . . . . . . . . . . . .

16 Was the decedent, immediately before death, receiving an annuity described in the “General” paragraph of the instructions for Schedule I or a private annuity? If “Yes,” you must complete and attach Schedule I . . . . . . . . . . . . .

17 Was the decedent ever the beneficiary of a trust for which a deduction was claimed by the estate of a predeceased spouse under section 2056(b)(7) and which is not reported on this return? If “Yes,” attach an explanation . . . . . . . . .

Part 5—Recapitulation. Note: If estimating the value of one or more assets pursuant to the special rule of Reg. section 20.2010-2(a)(7)(ii), enter on both lines 10 and 23 the amount noted in the instructions for the corresponding range of values. See instructions for details.

Item no. Gross estate Alternate value Value at date of death

1 Schedule A—Real Estate . . . . . . . . . . . . . . . . 1

2 Schedule B—Stocks and Bonds . . . . . . . . . . . . . . 2

3 Schedule C—Mortgages, Notes, and Cash . . . . . . . . . . . 3

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

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

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

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

8 Schedule H—Powers of Appointment . . . . . . . . . . . . 89 Schedule I—Annuities . . . . . . . . . . . . . . . . . 910 Estimated value of assets subject to the special rule of Reg. section 20.2010-2(a)(7)(ii) 1011 Total gross estate (add items 1 through 10) . . . . . . . . . . . 11

12 Schedule U—Qualified Conservation Easement Exclusion . . . . . . 12

13

Total gross estate less exclusion (subtract item 12 from item 11). Enter here and on line 1 of Part 2—Tax Computation . . . . . . . . . . . . . 13

Item no. Deductions Amount

14 Schedule J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims . . 14

15 Schedule K—Debts of the Decedent . . . . . . . . . . . . . . . . . . . . . 15

16 Schedule K—Mortgages and Liens . . . . . . . . . . . . . . . . . . . . . 16

17 Total of items 14 through 16 . . . . . . . . . . . . . . . . . . . . . . . 17

18 Allowable amount of deductions from item 17 (see the instructions for item 18 of the Recapitulation) . . 18

19 Schedule L—Net Losses During Administration . . . . . . . . . . . . . . . . . . 19

20 Schedule L—Expenses Incurred in Administering Property Not Subject to Claims . . . . . . . . 20

21 Schedule M—Bequests, etc., to Surviving Spouse . . . . . . . . . . . . . . . . . 2122 Schedule O—Charitable, Public, and Similar Gifts and Bequests . . . . . . . . . . . . . 2223 Estimated value of deductible assets subject to the special rule of Reg. section 20.2010-2(a)(7)(ii) . . . 2324 Tentative total allowable deductions (add items 18 through 23). Enter here and on line 2 of the Tax Computation 24

Page 3

Form 706 (Rev. 8-2019)


Part 6—Portability of Deceased Spousal Unused Exclusion (DSUE)

Portability ElectionA decedent with a surviving spouse elects portability of the DSUE amount, if any, by completing and timely filing this return. No further action is required to elect portability of the DSUE amount to allow the surviving spouse to use the decedent’s DSUE amount.

Section A. Opting Out of PortabilityThe estate of a decedent with a surviving spouse may opt out of electing portability of the DSUE amount. Check here and do not complete Sections B and C of Part 6 only if the estate opts NOT to elect portability of the DSUE amount.

Section B. Qualified Domestic Trust (QDOT) Yes NoAre any assets of the estate being transferred to a QDOT? . . . . . . . . . . . . . . . . . . . . . . .If “Yes,” the DSUE amount portable to a surviving spouse (calculated in Section C, below) is preliminary and shall be redetermined at the time of the final distribution or other taxable event imposing estate tax under section 2056A. See instructions for more details.

Section C. DSUE Amount Portable to the Surviving Spouse (To be completed by the estate of a decedent making a portability election.)Complete the following calculation to determine the DSUE amount that can be transferred to the surviving spouse.

1 Enter the amount from line 9d, Part 2—Tax Computation . . . . . . . . . . . . . . . 1

2 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

3 Enter the value of the cumulative lifetime gifts on which tax was paid or payable. See instructions . . . 3

4 Add lines 1 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

5 Enter amount from line 10, Part 2—Tax Computation . . . . . . . . . . . . . . . . 5

6 Divide amount on line 5 by 40% (0.40) (do not enter less than zero) . . . . . . . . . . . . 6

7 Subtract line 6 from line 4 . . . . . . . . . . . . . . . . . . . . . . . . 7

8 Enter the amount from line 5, Part 2—Tax Computation . . . . . . . . . . . . . . . . 8

9 Subtract line 8 from line 7 (do not enter less than zero) . . . . . . . . . . . . . . . . 910 DSUE amount portable to surviving spouse (Enter lesser of line 9 or line 9a, Part 2—Tax Computation) . . 10

Section D. DSUE Amount Received From Predeceased Spouse(s) (To be completed by the estate of a deceased surviving spouse with DSUE amount from predeceased spouse(s))

Provide the following information to determine the DSUE amount received from deceased spouses.

Part 1 — DSUE RECEIVED FROM LAST DECEASED SPOUSE

A Name of Deceased Spouse

(dates of death after December 31, 2010, only)

B Date of Death

(enter as mm/dd/yy)

C Portability Election Made?

Yes No

D If “Yes,” DSUE

Amount Received From Spouse

E DSUE Amount

Applied by Decedent to Lifetime Gifts

F Year of Form 709

Reporting Use of DSUE Amount Listed in col. E

G Remaining DSUE

Amount, if any (subtract col. E

from col. D)

Part 2 — DSUE RECEIVED FROM OTHER PREDECEASED SPOUSE(S) AND USED BY DECEDENT

Total (for all DSUE amounts from predeceased spouse(s) applied) . .

Add the amount from Part 1, column D, and the total from Part 2, column E. Enter the result on line 9b, Part 2—Tax Computation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶

Page 4

Form 706 (Rev. 8-2019)


SCHEDULE A—Real Estate• For jointly owned property that must be disclosed on Schedule E, see instructions.• Real estate that is part of a sole proprietorship should be shown on Schedule F.• Real estate that is included in the gross estate under sections 2035, 2036, 2037, or 2038 should be shown on Schedule G.• Real estate that is included in the gross estate under section 2041 should be shown on Schedule H.• If you elect section 2032A valuation, you must complete Schedule A and Schedule A-1.

Note: If the value of the gross estate, together with the amount of adjusted taxable gifts, is less than the basic exclusion amount and Form 706 is being filed solely to elect portability of the DSUE amount, consideration should be given as to whether you are required to report the value of assets eligible for the marital or charitable deduction on this schedule. See the instructions for more information. If you are not required to report the value of an asset, identify the property but make no entries in the last three columns.

Item number

DescriptionAlternate

valuation dateAlternate value Value at date of death

1

Total from continuation schedules or additional statements attached to this schedule .TOTAL (Also enter on Part 5—Recapitulation, page 3, at item 1.) . . . . . . . . . .

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

Schedule A—Page 5

Form 706 (Rev. 8-2019)


SCHEDULE A-1—Section 2032A ValuationPart 1. Type of Election (Before making an election, see the checklist in the instructions):

Protective election (Reg. section 20.2032A-8(b)). Complete Part 2, line 1, and column A of lines 3 and 4. See instructions.Regular election. Complete all of Part 2 (including line 11, if applicable) and Part 3. See instructions.

Before completing Schedule A-1, see the instructions for the information and documents that must be included to make a valid election.The election is not valid unless the agreement (that is, Part 3. Agreement to Special Valuation Under Section 2032A):• Is signed by each qualified heir with an interest in the specially valued property, and• Is attached to this return when it is filed.Part 2. Notice of Election (Reg. section 20.2032A-8(a)(3))Note: All real property entered on lines 2 and 3 must also be entered on Schedules A, E, F, G, or H, as applicable.

1 Qualified use—check one ▶ Farm used for farming, orTrade or business other than farming

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

Schedule and item number from Form 706

B Full value

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

C Adjusted value

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

D Value based on qualified use


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

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

Schedule and item number from Form 706

B Full value


C Adjusted value

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

D Value based on qualified use


Totals . . . . . . . . . .If you checked “Regular election,” you must attach copies of appraisals showing the column B values for all property listed on line 3. (continued on next page)

Schedule A-1—Page 6

Form 706 (Rev. 8-2019)


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

A Schedule and item

number from Form 706

B Adjusted value (with section 2032A(b)(3)(B) adjustment)

Subtotal . . . . . . .

A (continued) Schedule and item

number from Form 706

B (continued) Adjusted value (with section 2032A(b)(3)(B) adjustment)

“Subtotal” from col. B, below left

Total adjusted value . . .5 Enter the value of the total gross estate as adjusted under section 2032A(b)(3)(A). ▶6 Attach a description of the method used to determine the special value based on qualified use.

Yes No7 Did the decedent and/or a member of his or her family own all property listed on line 2 for at least 5 of the 8 years immediately preceding the date of the decedent’s death? . . . . . . . . . . . . . . . . . . .

8 Were there any periods during the 8-year period preceding the date of the decedent’s death during which thedecedent or a member of his or her family:

a Did not own the property listed on line 2? . . . . . . . . . . . . . . . . . . . . . . . .b Did not use the property listed on line 2 in a qualified use? . . . . . . . . . . . . . . . . . .c Did not materially participate in the operation of the farm or other business within the meaning of section 2032A(e)(6)?

If you answered “Yes” to any of the above, attach a statement listing the periods. If applicable, describe whether the exceptions of sections 2032A(b)(4) or (5) are met.

9 Attach affidavits describing the activities constituting material participation and the identity and relationship to the decedent of the material participants.

10

Persons holding interests. Enter the requested information for each party who received any interest in the specially valued property. (Each of the qualified heirs receiving an interest in the property must sign the agreement, to be found on Part 3 of this Schedule A-1, and the agreement must be filed with this return.)

Name Address

ABCDEFGH

Identifying number Relationship to decedent Fair market value Special-use value

ABCDEFGH

You must attach a computation of the GST tax savings attributable to direct skips for each person listed above who is a skip person. See instructions.11 Woodlands election. Check here ▶ if you wish to make a Woodlands election as described in section 2032A(e)(13). Enter

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

Attach a statement explaining why you are entitled to make this election. The IRS may issue regulations that require more information to substantiate this election. You will be notified by the IRS if you must supply further information.


Form 706 (Rev. 8-2019)


Part 3. Agreement to Special Valuation Under Section 2032A

There cannot be a valid election unless:• The agreement is executed by each one of the qualified heirs, and• The agreement is included with the estate tax return when the estate tax return is filed.We (list all qualified heirs)

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

,being all other parties having interests in the property, which is qualified real property and which is valued under section 2032A, dohereby approve of the election made by ,Executor/Administrator of the estate of ,pursuant to section 2032A to value said property on the basis of the qualified use to which the property is devoted and do hereby enter into this agreement pursuant to section 2032A(d).

The undersigned agree and consent to the application of subsection (c) of section 2032A with respect to all the property described on Form 706, Schedule A-1, Part 2, line 2, attached to this agreement. More specifically, the undersigned heirs expressly agree and consent to personal liability under subsection (c) of 2032A for the additional estate and GST taxes imposed by that subsection with respect to their respective interests in the above-described property in the event of certain early dispositions of the property or early cessation of the qualified use of the property. It is understood that if a qualified heir disposes of any interest in qualified real property to any member of his or her family, such member may thereafter be treated as the qualified heir with respect to such interest upon filing a Form 706-A, United States Additional Estate Tax Return, and a new agreement.

The undersigned interested parties who are not qualified heirs consent to the collection of any additional estate and GST taxes imposed under section 2032A(c) from the specially valued property.

If there is a disposition of any interest which passes, or has passed to him or her, or if there is a cessation of the qualified use of any specially valued property which passes or passed to him or her, each of the undersigned heirs agrees to file a Form 706-A, and pay any additional estate and GST taxes due within 6 months of the disposition or cessation.

It is understood by all interested parties that this agreement is a condition precedent to the election of special-use valuation under section 2032A and must be executed by every interested party even though that person may not have received the estate (or GST) tax benefits or be in possession of such property.

Each of the undersigned understands that by making this election, a lien will be created and recorded pursuant to section 6324B on the property referred to in this agreement for the adjusted tax differences with respect to the estate as defined in section 2032A(c)(2)(C).

As the interested parties, the undersigned designate the following individual as their agent for all dealings with the Internal Revenue Service concerning the continued qualification of the specially valued property under section 2032A and on all issues regarding the special lien under section 6324B. The agent is authorized to act for the parties with respect to all dealings with the Internal Revenue Service on matters affecting the qualified real property described earlier. This includes the authorization:

• To receive confidential information on all matters relating to continued qualification under section 2032A of the specially valued real property and on all matters relating to the special lien arising under section 6324B;

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

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

• To receive, but not to endorse and collect, checks in payment of any refund of Internal Revenue taxes, penalties, or interest;

• To execute waivers (including offers of waivers) of restrictions on assessment or collection of deficiencies in tax and waivers of notice of disallowance of a claim for credit or refund; and

• To execute closing agreements under section 7121.

(continued on next page)


Form 706 (Rev. 8-2019)


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

• Other acts (specify) ▶

By signing this agreement, the agent agrees to provide the Internal Revenue Service with any requested information concerning this property and to notify the Internal Revenue Service of any disposition or cessation of the qualified use of any part of this property.

Name of Agent Signature Address

The property to which this agreement relates is listed in Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and in the Notice of Election, along with its fair market value according to section 2031 and its special-use value according to section 2032A. The name, address, social security number, and interest (including the value) of each of the undersigned in this property are as set forth in the attached Notice of Election.

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

this day of .

SIGNATURES OF EACH OF THE QUALIFIED HEIRS:

Signature of qualified heir Signature of qualified heir






Signatures of other interested parties

Signatures of other interested parties


Form 706 (Rev. 8-2019)


SCHEDULE B—Stocks and Bonds(For jointly owned property that must be disclosed on Schedule E, see instructions.)

Note: If the value of the gross estate, together with the amount of adjusted taxable gifts, is less than the basic exclusion amount and Form 706 is being filed solely to elect portability of the DSUE amount, consideration should be given as to whether you are required to report the value of assets eligible for the marital or charitable deduction on this schedule. See the instructions for more information. If you are not required to report the value of an asset, identify the property but make no entries in the last four columns.

Item number

Description, including face amount of bonds or number of shares and par value for identification. Give CUSIP number. If trust, partnership, or closely held entity, give EIN.

Unit valueAlternate

valuation dateAlternate value

Value at date of death

CUSIP number or EIN, where applicable

1

Total from continuation schedules (or additional statements) attached to this schedule .TOTAL (Also enter on Part 5—Recapitulation, page 3, at item 2.) . . . . . . . . . .


Schedule B—Page 10

Form 706 (Rev. 8-2019)


SCHEDULE C—Mortgages, Notes, and Cash(For jointly owned property that must be disclosed on Schedule E, see instructions.)


Item number




1



Schedule C—Page 11

Form 706 (Rev. 8-2019)


SCHEDULE D—Insurance on the Decedent’s LifeYou must list all policies on the life of the decedent and attach a Form 712 for each policy.


Item number




1



Schedule D—Page 12

Form 706 (Rev. 8-2019)


SCHEDULE E—Jointly Owned Property (If you elect section 2032A valuation, you must complete Schedule E and Schedule A-1.)

PART 1. Qualified Joint Interests—Interests Held by the Decedent and His or Her Spouse as the Only Joint Tenants (Section 2040(b)(2))


Item number

Description. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN.

Alternate valuation date

Alternate valueValue at

date of death

CUSIP number or

EIN, where applicable

1

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

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

PART 2. All Other Joint Interests

2a State the name and address of each surviving co-tenant. If there are more than three surviving co-tenants, list the additional co-tenants on an attached statement.

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

A.

B.

C.

Item number

Enter letter for

co-tenant

Description (including alternate valuation date, if any). For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN

Percentage includibleIncludible alternate

valueIncludible value at

date of death

CUSIP number or


1

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

b Total other joint interests . . . . . . . . . . . . . . . . . . . . . 2b

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

(If more space is needed, attach the continuation schedule from the end of this package or additional statements of the same size.)Schedule E—Page 13

Form 706 (Rev. 8-2019)


SCHEDULE F—Other Miscellaneous Property Not Reportable Under Any Other Schedule (For jointly owned property that must be disclosed on Schedule E, see instructions.)

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


1 Did the decedent own any works of art, items, or any collections whose artistic or collectible value at date of deathexceeded $3,000? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes No

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

2 Has the decedent’s estate, spouse, or any other person received (or will receive) any bonus or award as a result ofthe decedent’s employment or death? . . . . . . . . . . . . . . . . . . . . . . . . . .If “Yes,” submit full details on this schedule.

3 Did the decedent at the time of death have, or have access to, a safe deposit box? . . . . . . . . . . .If ‘‘Yes,’’ state location, and if held jointly by decedent and another, state name and relationship of joint depositor.

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

Item number

Description. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN



date of death

CUSIP number or


1



Schedule F—Page 14

Form 706 (Rev. 8-2019)


SCHEDULE G—Transfers During Decedent’s Life(If you elect section 2032A valuation, you must complete Schedule G and Schedule A-1.)


Item number

Description. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN



date of death

A.

Gift tax paid or payable by the decedent or the estate for all gifts made by the decedent or his or her spouse within 3 years before thedecedent’s death (section 2035(b)) . . . . . . . . . . . . X X X X X

B. Transfers includible under sections 2035(a), 2036, 2037, or 2038:1


SCHEDULE H—Powers of Appointment (Include “5 and 5 lapsing” powers (section 2041(b)(2)) held by the decedent.)

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


Item number

DescriptionAlternate valuation

dateAlternate value


1



Schedules G and H—Page 15

Form 706 (Rev. 8-2019)


SCHEDULE I—Annuities

Note: Generally, no exclusion is allowed for the estates of decedents dying after December 31, 1984. See instructions.


A Are you excluding from the decedent’s gross estate the value of a lump-sum distribution described in section 2039(f)(2) (as in effect before its repeal by the Deficit Reduction Act of 1984)? . . . . . . . . . . . . . . . . .

Yes No

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

Item number

Description. Show the entire value of the annuity before any exclusions


Includible alternate value

Includible value at date of death

1



Schedule I—Page 16

Form 706 (Rev. 8-2019)


SCHEDULE J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims ▶ Use Schedule PC to make a protective claim for refund due to an expense not currently deductible.

For such a claim, report the expense on Schedule J but without a value in the last column.

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

If executors’ commissions, attorney fees, etc., are claimed and allowed as a deduction for estate tax purposes, they are not allowable as a deduction in computing the taxable income of the estate for federal income tax purposes. They are allowable as an income tax deduction on Form 1041, U.S. Income Tax Return for Estates and Trusts, if a waiver is filed to forgo the deduction on Form 706. See the Instructions for Form 1041.

Are you aware of any actual or potential reimbursement to the estate for any expense claimed as a deduction on thisschedule? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Yes No

If “Yes,” attach a statement describing the expense(s) subject to potential reimbursement. See instructions.

Item number

Description Expense amount Total amount

A. Funeral expenses:1

Total funeral expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . ▶

B. Administration expenses:1 Executors’ commissions—amount estimated/agreed upon/paid. (Strike out the words that do not

apply.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Attorney fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.) . . .3 Accountant fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.) . .

4 Miscellaneous expenses: Expense amount

Total miscellaneous expenses from continuation schedules (or additional statements) attached to this schedule . . . . . . . . . . . . . . . . . . . . .Total miscellaneous expenses . . . . . . . . . . . . . . . . . . . . . . . . ▶

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


Schedule J—Page 17

Form 706 (Rev. 8-2019)


SCHEDULE K—Debts of the Decedent, and Mortgages and Liens ▶ Use Schedule PC to make a protective claim for refund due to a claim not currently deductible.

For such a claim, report the expense on Schedule K but without a value in the last column.

Yes NoAre you aware of any actual or potential reimbursement to the estate for any debt of the decedent, mortgage, or lienclaimed as a deduction on this schedule? . . . . . . . . . . . . . . . . . . . . . . . . . .If “Yes,” attach a statement describing the items subject to potential reimbursement. See instructions.Are any of the items on this schedule deductible under Reg. section 20.2053-4(b) and Reg. section 20.2053-4(c)? . .If “Yes,” attach a statement indicating the applicable provision and documenting the value of the claim.

Item number

Debts of the Decedent—Creditor and nature of debt, and allowable death taxes

Amount

1

Total from continuation schedules (or additional statements) attached to this schedule . . . . . .TOTAL (Also enter on Part 5—Recapitulation, page 3, at item 15.) . . . . . . . . . . . . . . .

Item number

Mortgages and Liens—Description Amount

1



Schedule K—Page 18

Form 706 (Rev. 8-2019)


SCHEDULE L—Net Losses During Administration and Expenses Incurred in Administering Property Not Subject to Claims ▶ Use Schedule PC to make a protective claim for refund due to an expense not currently deductible.

For such expenses, report the expense on Schedule L but without a value in the last column.

Item number

Net losses during administration (Note: Do not deduct losses claimed on a federal income tax return.)

Amount

1


Item number

Expenses incurred in administering property not subject to claims. (Indicate whether estimated, agreed upon, or paid.)

Amount

1



Schedule L—Page 19

Form 706 (Rev. 8-2019)


SCHEDULE M—Bequests, etc., to Surviving Spouse

Note: If the value of the gross estate, together with the amount of adjusted taxable gifts, is less than the basic exclusion amount and Form 706 is being filed solely to elect portability of the DSUE amount, consideration should be given as to whether you are required to report the value of assets eligible for the marital or charitable deduction on this schedule. See the instructions for more information. If you are not required to report the value of an asset, identify the property but make no entry in the last column.

Yes No1 Did any property pass to the surviving spouse as a result of a qualified disclaimer? . . . . . . . . 1

If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b).2a In what country was the surviving spouse born?

b What is the surviving spouse’s date of birth?c Is the surviving spouse a U.S. citizen? . . . . . . . . . . . . . . . . . . . . . . . 2cd If the surviving spouse is a naturalized citizen, when and where did the surviving spouse acquire citizenship?

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

3

Election Out of QTIP Treatment of Annuities. Do you elect under section 2056(b)(7)(C)(ii) not to treat as qualified terminable interest property any joint and survivor annuities that are included in the gross estate and would otherwise be treated as qualified terminable interest property under section 2056(b)(7)(C)? See instructions 3

Item number

Description of property interests passing to surviving spouse. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN

Amount

QTIP property: A1

All other property: B1

Total from continuation schedules (or additional statements) attached to this schedule . . . . . . .4 Total amount of property interests listed on Schedule M . . . . . . . . . . . . . . . 45a Federal estate taxes payable out of property interests listed on Schedule M . 5a

b Other death taxes payable out of property interests listed on Schedule M . . 5bc Federal and state GST taxes payable out of property interests listed on Schedule M 5cd Add items 5a, 5b, and 5c . . . . . . . . . . . . . . . . . . . . . . . . . 5d

6 Net amount of property interests listed on Schedule M (subtract item 5d from item 4). Also enter onPart 5—Recapitulation, page 3, at item 21 . . . . . . . . . . . . . . . . . . . . 6


Schedule M—Page 20

Form 706 (Rev. 8-2019)


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

Note: If the value of the gross estate, together with the amount of adjusted taxable gifts, is less than the basic exclusion amount and Form 706 is being filed solely to elect portability of the DSUE amount, consideration should be given as to whether you are required to report the value of assets eligible for the marital or charitable deduction on this schedule. See the instructions for more information. If you are not required to report the value of an asset, identify the property but make no entry in the last column.

Yes No

1 a If the transfer was made by will, has any action been instituted to contest or have interpreted any of its provisionsaffecting the charitable deductions claimed in this schedule? . . . . . . . . . . . . . . . . . .If ‘‘Yes,’’ full details must be submitted with this schedule.

b According to the information and belief of the person or persons filing this return, is any such action planned? .If ‘‘Yes,’’ full details must be submitted with this schedule.

2 Did any property pass to charity as the result of a qualified disclaimer? . . . . . . . . . . . . . .If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b).

Item number

Name and address of beneficiary Character of institution Amount

1

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

3 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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

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

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

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

5

Net value of property interests listed above (subtract item 4d from item 3). Also enter on Part 5—Recapitulation, page 3, at item 22 . . . . . . . . . . . . . . . . . . . . . . . 5


Schedule O—Page 21

Form 706 (Rev. 8-2019)


SCHEDULE P—Credit for Foreign Death TaxesList all foreign countries to which death taxes have been paid and for which a credit is claimed on this return.

If a credit is claimed for death taxes paid to more than one foreign country, compute the credit for taxes paid to one country on this sheet and attach a separate copy of Schedule P for each of the other countries.

The credit computed on this sheet is for the(Name of death tax or taxes)

imposed in(Name of country)

Credit is computed under the(Insert title of treaty or statute)

Citizenship (nationality) of decedent at time of death(All amounts and values must be entered in U.S. money.)

1 Total of estate, inheritance, legacy, and succession taxes imposed in the country named above attributable to property situated in that country, subjected to these taxes, and included in the gross estate (as defined by statute) . 1

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

3 Value of property situated in that country, subjected to death taxes imposed in that country, and included in the gross estate (adjusted, if necessary, according to the instructions) . . . . . . . . . . . . . . . 3

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

5 Amount of federal estate tax attributable to property specified at item 3. (Divide item 3 by item 2 and multiply the result by item 4.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Credit for death taxes imposed in the country named above (the smaller of item 1 or item 5). Also enter on line 13 of Part 2—Tax Computation . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 6

SCHEDULE Q—Credit for Tax on Prior Transfers

Part 1. Transferor Information

Name of transferor Social security numberIRS office where estate

tax return was filedDate of death

A

B

CCheck here ▶ if section 2013(f) (special valuation of farm, etc., real property) adjustments to the computation of the credit were made. See instructions.

Part 2. Computation of Credit (see instructions)

ItemTransferor Total

A, B, and C A B C

1 Transferee’s tax as apportioned (from worksheet, (line 7 ÷ line 8) × line 35 for each column) . . .

2 Transferor’s tax (from each column of worksheet, line 20) . . . . . . . . . . . . .

3

Maximum amount before percentage requirement (for each column, enter amount from line 1 or line 2, whichever is smaller) . . . . . . . . .

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

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

6

TOTAL credit allowable (add columns A, B, and C of line 5). Enter here and on line 14 of Part 2—Tax Computation . . . . . . . . . . . .

Schedules P and Q—Page 22

Form 706 (Rev. 8-2019)


SCHEDULE R—Generation-Skipping Transfer Tax

Note: To avoid application of the deemed allocation rules, Form 706 and Schedule R should be filed to allocate the GST exemption to trusts that may later have taxable terminations or distributions under section 2612 even if the form is not required to be filed to report estate or GST tax.

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

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

You no longer need to check a box to make a section 2652(a)(3) (special QTIP) election. If you list qualifying property in Part 1, line 9, below, you will be considered to have made this election. See instructions for details.

1 Maximum allowable GST exemption . . . . . . . . . . . . . . . . . . . . . 1

2 Total GST exemption allocated by the decedent against decedent’s lifetime transfers . . . . . 23 Total GST exemption allocated by the executor, using Form 709, against decedent’s lifetime

transfers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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

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

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

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

8 GST exemption available to allocate to trusts and section 2032A interests (subtract line 7 fromline 1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

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

A Name of trust

B Trust’s

EIN (if any)

C GST exemption allocated

on lines 2–6 above (see instructions)

D Additional GST

exemption allocated (see instructions)

E Trust’s inclusion ratio (optional)

(see instructions)

9D Total. May not exceed line 8 above . . . . . . . . . . . 9D10 GST exemption available to allocate to section 2032A interests received by individual beneficiaries

(subtract line 9D from line 8). You must attach special-use allocation statement. See instructions . 10Schedule R—Page 23

Form 706 (Rev. 8-2019)


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

Name of skip person Description of property interest transferred Estate tax value

1 Total estate tax values of all property interests listed above . . . . . . . . . . . . . . 12 Estate taxes, state death taxes, and other charges borne by the property interests listed above . . 23 GST taxes borne by the property interests listed above but imposed on direct skips other than those

shown on this Part 2 (see instructions) . . . . . . . . . . . . . . . . . . . . . 34 Total fixed taxes and other charges (add lines 2 and 3) . . . . . . . . . . . . . . . 45 Total tentative maximum direct skips (subtract line 4 from line 1) . . . . . . . . . . . . 56 GST exemption allocated . . . . . . . . . . . . . . . . . . . . . . . . . 67 Subtract line 6 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . 78 GST tax due (divide line 7 by 3.5) . . . . . . . . . . . . . . . . . . . . . . 89 Enter the amount from line 8 of Schedule R, Part 3 . . . . . . . . . . . . . . . . . 9

10 Total GST taxes payable by the estate (add lines 8 and 9). Enter here and on line 17 of Part 2—Tax Computation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Schedule R—Page 24

Form 706 (Rev. 8-2019)


Part 3. Direct Skips Where the Property Interests Transferred Do Not Bear the GST Tax on the Direct Skips

Name of skip person Description of property interest transferred Estate tax value

1 Total estate tax values of all property interests listed above . . . . . . . . . . . . . . 12 Estate taxes, state death taxes, and other charges borne by the property interests listed above . . 23 GST taxes borne by the property interests listed above but imposed on direct skips other than those

shown on this Part 3 (see instructions) . . . . . . . . . . . . . . . . . . . . . 34 Total fixed taxes and other charges (add lines 2 and 3) . . . . . . . . . . . . . . . 45 Total tentative maximum direct skips (subtract line 4 from line 1) . . . . . . . . . . . . 56 GST exemption allocated . . . . . . . . . . . . . . . . . . . . . . . . . 67 Subtract line 6 from line 5 . . . . . . . . . . . . . . . . . . . . . . . . . 78 GST tax due (multiply line 7 by 0.40). Enter here and on Schedule R, Part 2, line 9 . . . . . . 8

Schedule R—Page 25

Form 706 (Rev. 8-2019)


SCHEDULE U—Qualified Conservation Easement Exclusion

Part 1. Election

Note: The executor is deemed to have made the election under section 2031(c)(6) if he or she files Schedule U and excludes any qualifying conservation easements from the gross estate.

Part 2. General Qualifications1 Describe the land subject to the qualified conservation easement. See instructions

2 Did the decedent or a member of the decedent’s family own the land described above during the 3-year period ending on the date of the decedent’s death? . . . . . . . . . . . . . . . . . . . Yes No

3 Describe the conservation easement with regard to which the exclusion is being claimed. See instructions.

Part 3. Computation of Exclusion4 Estate tax value of the land subject to the qualified conservation easement (see instructions) . 45 Date of death value of any easements granted prior to decedent’s

death and included on line 10 below (see instructions) . . . . 56 Add lines 4 and 5 . . . . . . . . . . . . . . . . 67 Value of retained development rights on the land (see instructions) 7

8 Subtract line 7 from line 6 . . . . . . . . . . . . . 8

9 Multiply line 8 by 30% (0.30) . . . . . . . . . . . . 910 Value of qualified conservation easement for which the exclusion is

being claimed (see instructions) . . . . . . . . . . . 10Note: If line 10 is less than line 9, continue with line 11. If line 10 is equal to or more than line 9, skip lines 11 through 13, enter “0.40”on line 14, and complete the schedule.

11 Divide line 10 by line 8. Figure to 3 decimal places (for example,“0.123”) . . . . . . . . . . . . . . . . . . . 11Note: If line 11 is equal to or less than 0.100, stop here; the estate does not qualify for the conservation easement exclusion.

12

Subtract line 11 from 0.300. Enter the answer in hundredths by rounding any thousandths up to the next higher hundredth (that is, 0.030 = 0.03, but 0.031 = 0.04) . . . . . . . . . . . . 12

13 Multiply line 12 by 2.0 . . . . . . . . . . . . . . . 13

14 Subtract line 13 from 0.40 . . . . . . . . . . . . . 1415 Deduction under section 2055(f) for the conservation easement (see

instructions) . . . . . . . . . . . . . . . . . . 1516 Amount of indebtedness on the land (see instructions) . . . . 1617 Total reductions in value (add lines 7, 15, and 16) . . . . . . . . . . . . . . . 17

18 Net value of land (subtract line 17 from line 4) . . . . . . . . . . . . . . . . . 18

19 Multiply line 18 by line 14 . . . . . . . . . . . . . . . . . . . . . . . 1920 Enter the smaller of line 19 or the exclusion limitation. See instructions. Also enter this amount

on item 12, Part 5—Recapitulation, page 3 . . . . . . . . . . . . . . . . . . 20

Schedule U—Page 26

Schedule PC (Rev. August 2019) Department of the Treasury Internal Revenue Service

Protective Claim for Refund ▶ To be used for decedents dying after December 31, 2011. File 2 copies of this schedule with

Form 706 for each pending claim or expense under section 2053.

OMB No. 1545-0015

• Timely filing a protective claim for refund preserves the estate’s right to claim a refund based on the amount of an unresolved claim or expense that may not become deductible under section 2053 until after the limitation period ends.

• Schedule PC can be used to file a protective claim for refund and, once the claim or expense becomes deductible, Schedule PC can be used to notify the IRS that a refund is being claimed.

• Schedule PC can be used by the estate of a decedent dying after 2011.• Schedule PC must be filed with Form 706 and cannot be filed separately. (To file a protective claim for refund or notify the IRS that a

refund is being claimed in a form separate from the Form 706, instead use Form 843, Claim for Refund and Request for Abatement.)• Each separate claim or expense requires a separate Schedule PC (or Form 843, if not filed with Form 706).• Schedule PC must be filed in duplicate (two copies) for each separate claim or expense.

Part 1. General Information1. Name of decedent 2. Decedent’s social security no.

3. Name of fiduciary 4. Date of death

5a. Address (number, street, and room or suite no.) 5b. Room or suite no.

5c. City or town, state, and ZIP or postal code 6. Daytime telephone number

7. Number of Claims. Enter number of Schedules PC being filed with Form 706.

If the number is greater than one OR if another Schedule PC or Form 843 was previously filed by or on behalf of the estate, complete Part 3 of this Schedule PC.

8. Fiduciary Check here if this Schedule PC is being filed with the original Form 706 or is being filed by the same fiduciary who filed the original Form 706 for decedent’s estate. If a different fiduciary is filing this Schedule PC, see instructions for establishing the legal authority to pursue the claim for refund on behalf of the estate.

Part 2. Claim InformationCheck the box that applies to this claim for refund.

a. Protective claim for refund made for unresolved claim or expense.

Amount in contest:

b.

Partial refund claimed: partial resolution and/or satisfaction of claim or expense for which a protective claim for refund hasbeen filed previously.

Date protective claim for refund filed for this claim or expense:

Amount of claim or expense partially resolved and/or satisfied and presently claimed as a deduction under section 2053 (do not include amounts previously deducted):

c.

Full and final refund claimed for this claim or expense: resolution and/or satisfaction of claim or expense for which a protective claim for refund has been filed previously.

Date protective claim for refund filed for this claim or expense:

Amount of claim or expense finally resolved and/or satisfied and presently claimed as a deduction under section 2053 (do not include amounts previously deducted):

Schedule PC—Page 27

Form 706 (Rev. 8-2019)


A Form 706 Schedule and Item number

B Identification of the claim

• Name or names of the claimant(s) • Basis of the claim or other description of the pending claim or

expense • Reasons and contingencies delaying resolution

• Status of contested matters • Attach copies of relevant pleadings or other documents

C Amount, if any, deducted under

Treas. Reg. sections 20.2053-1(d)(4) or 20.2053-4(b) or (c) for the identified claim or expense

D Amount presently

claimed as a deduction under

section 2053 for the identified claim

E Ancillary expenses

estimated/ agreed upon/paid (Please indicate)

F Amount of tax to be refunded

Part 3. Other Schedules PC and Forms 843 Filed by EstateIf a Schedule PC or Form 843 was previously filed by the estate, complete Part 3 to identify each claim for refund reported.

A Date of death

B Internal Revenue office where filed

C Date filed

D Indicate whether

(1) Protective Claim for Refund,

(2) Partial Claim for Refund, or

(3) Full and Final Claim for Refund

E Amount in Contest

1

To inquire about the receipt and/or processing of the protective claim for refund, please call 866-699-4083.

Schedule PC—Page 28

Form 706 (Rev. 8-2019) (Make copies of this schedule before completing it if you will need more than one schedule.)


CONTINUATION SCHEDULEContinuation of Schedule

(Enter letter of schedule you are continuing.)

Item number

Description. For securities, give CUSIP number.

If trust, partnership, or closely held entity, give EIN.

Unit value (Sch. B, E, or

G only)


Alternate valueValue at date of death or amount

deductible

TOTAL (Carry forward to main schedule.) . . . . . . . . . . . . . . . . . .

Continuation Schedule—Page 29

Request for Discharge From Personal Liability UnderInternal Revenue Code Section 2204 or 6905

Form 5495 OMB No. 1545-0432

© See instructions on back. Department of the TreasuryInternal Revenue Service Social security number Decedent’s name

Tax Returns for Which Discharge From Personal Liability is Requested Form

Number

Form 5495 (Rev. 12-2008) Cat. No. 42571S For Privacy Act and Paperwork Reduction Act Notice, see back of form.

For IRS Use Only (Rev. December 2008)

Date of death

Requester’s name

Title

Number, street, and room or suite no. (If a P.O. box, see instructions.)

City, town, or post office, state, and ZIP code

Kind of Tax

Income

Gift

Estate

Daytime phone number

Tax PeriodEnded

SSN/EIN onReturn

DateFiled

Service CenterWhere Filed

Name and AddressShown on Return

Spouse’s social security number If applicable, provide the name of the decedent’s spouse (surviving or deceased)

Under penalties of perjury, I declare that I have examined this request, including accompanying schedules and statements, and to the best of myknowledge and belief, it is true, correct, and complete.

Identifying number Date Signature of requester © ©

Sign Here

I certify that I have never been assessed any penalties for civil fraud for any federal or state tax matter nor have I been charged with,indicted for, or convicted of fraud. If you cannot certify this statement, attach a detailed statement explaining the circumstances underwhich you were assessed a penalty, charged with, indicted for, or convicted of fraud.

I have attached the items checked to help expedite action on my request.

Copies of returns listed above. Copies of letters of administration or letters testamentary. Other (describe):

I request a discharge from personal liability for any deficiency for the kind of tax and periods shown above, as provided by section 2204or 6905 of the Internal Revenue Code.

Form 5495 (Rev. 12-2008) Page 2

General Information

When To File Do not file Form 5495 requesting a discharge fromincome or gift tax liability until after you file the taxreturns listed on the front of this form. If you arerequesting a discharge from personal liability for theestate tax, you may attach this form to Form 706,United States Estate (and Generation-SkippingTransfer) Tax Return, or you may file this form any timeduring the 3-year period following the date the Form706 is filed. You must submit a separate request fordischarge from personal liability for any tax returnsfiled after this Form 5495.

Privacy Act and Paperwork Reduction Act Notice.We ask for the information on this form to carry out theInternal Revenue laws of the United States. We collectthis information under the authority of Internal RevenueCode sections 2204 and 6905. We need it to ensurethat you are complying with these laws and to allow usto figure and collect the right amount of tax. Thisinformation is needed to determine eligibility for therequested discharge from personal liability. You are notrequired to request discharge from personal liability;however, if you do so you are required to provide theinformation requested on this form. Failure to providethe information may delay or prevent processing yourrequest; providing false information may subject you topenalties. Section 6109 requires you to provide therequested taxpayer identification numbers. You are not required to provide the informationrequested on a form that is subject to the PaperworkReduction Act unless the form displays a valid OMBcontrol number. Books or records relating to a form orits instructions must be retained as long as theircontents may become material in the administration ofany Internal Revenue law. Generally, tax returns andreturn information are confidential, as required bysection 6103. However, section 6103 allows or requiresthe Internal Revenue Service to disclose or give suchinformation to the Department of Justice for civil andcriminal litigation; to cities, states, the District ofColumbia, and U.S. commonwealths and possessionsto administer their tax laws; and to other countriesunder a tax treaty. We may also disclose thisinformation to federal and state agencies to enforcefederal nontax criminal laws, or to federal lawenforcement and intelligence agencies to combatterrorism. The time needed to complete and file this form andrelated schedules will vary depending on individualcircumstances. The estimated average times are:

If you have comments concerning the accuracy ofthese time estimates or suggestions for making thisform simpler, we would be happy to hear from you.You can write to the Internal Revenue Service, TaxProducts Coordinating Committee,SE:W:CAR:MP:T:T:SP, 1111 Constitution Ave. NW,IR-6526, Washington, DC 20224. Do not send the taxform to this address. Instead, see Where To File.

Ordinarily, the IRS has 3 years after an income tax, gifttax, or estate tax return has been filed to assess taxand demand payment of any deficiency. The executorrepresenting a decedent’s estate or a fiduciary of adecedent’s trust may request a discharge frompersonal liability for the decedent’s income, gift, andestate taxes. Nine months, or 6 months in the case ofa fiduciary’s request, after the IRS’s receipt of therequest for discharge or the earlier payment of anyamount determined by the IRS to be owed, theexecutor or fiduciary will be discharged from personalliability for any deficiency in such tax thereafter foundto be due. In certain instances where the date forpayment of the estate tax has been extended, the IRSmay require a bond as a condition for discharge.

Information and Instructions

An executor means the executor or administrator ofa decedent, who was appointed, qualified, and actingwithin the United States.

Where To File Send your request to the Internal Revenue ServiceCenter where you filed the returns listed on the front ofthis form. If you are requesting taxes reported onmultiple returns filed at different Service Centers, youmust mail separate Forms 5495 to each Service Centerto receive a discharge from liability for each type oftax. If an estate tax return was filed, file Form 5495 forall taxes at the address where the estate tax returnwas filed. What To File This Form 5495 provides spaces for all informationrequired to process a request for discharge frompersonal liability under IRC section 2204 or 6905.Attach to your request the information anddocumentation requested on Form 5495. If you aresubmitting this request with your estate tax return, youwill not be required to provide an additional copy. If,however, this form is filed after Form 706, then a copyof pages 1–3 and Schedules A through I of Form 706must be attached. If you are a fiduciary requestingdischarge from personal liability under section 2204,check the “Other” box and include a copy of the trustinstrument(s), a list of assets transferred from thisdecedent to the trust, and any other relevantinformation. If you prefer to use your own format, yourwritten request must list the same information asrequested on this form and include the applicableattachments.

Recordkeeping 5 hr., 30 min. Learning about the law

or the form 1 hr., 30 min. Preparing the form 4 hr., 27 min. Copying, assembling, and

sending the form to the IRS 48 min.

Form 8971(January 2016)Department of the Treasury Internal Revenue Service

Information Regarding Beneficiaries Acquiring Property From a Decedent

▶ Information about Form 8971 and its separate instructions is at www.irs.gov/form8971.

OMB No. 1545-2264

Check box if this is a supplemental filing

Part I Decedent and Executor Information1 Decedent's name 2 Decedent's date of death 3 Decedent's SSN

4 Executor's name (see instructions) 5 Executor's phone no. 6 Executor's TIN

7 Executor's address (number and street including apartment or suite no.; city, town, or post office; state or province; country; and ZIP or foreign postal code)

8 If there are multiple executors, check here and attach a statement showing the names, addresses, telephone numbers, and TINs of the additional executors.

9 If the estate elected alternate valuation, indicate the alternate valuation date:

Part II Beneficiary InformationHow many beneficiaries received (or are expected to receive) property from the estate? For each beneficiary, provide the information requested below. If more space is needed, attach a statement showing the requested information for the additional beneficiaries.

A Name of Beneficiary

B TIN

C

Address, City, State, ZIPD

Date Provided

Notice to Executors:Submit Form 8971 with a copy of each completed Schedule A to the IRS. To protect privacy, Form 8971 should not be provided to any beneficiary. Only Schedule A of Form 8971 should be provided to the beneficiary. Retain copies of all forms for the estate's records.

Sign Here

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, all information reported herein is true, correct, and complete.

▲

Signature of executor Date

May the IRS discuss this return with the preparer shown below? See instructions . . . . . . . . . . . . . . Yes No

Paid Preparer Use Only

Print/Type preparer’s name Preparer’s signature DateCheck if self-employed

PTIN

Firm’s name ▶

Firm’s address ▶

Firm’s EIN ▶

Phone no.

For Privacy Act and Paperwork Reduction Act Notice, see the separate instructions. Cat. No. 37794V Form 8971 (1-2016)

[This page left blank intentionally]

Form 8971 (1-2016)

SCHEDULE A—Information Regarding Beneficiaries Acquiring Property From a Decedent

▶ Information about Form 8971 (including Schedule A) and its separate instructions is at www.irs.gov/form8971.


Part 1. General Information1 Decedent's name 2 Decedent’s SSN 3 Beneficiary's name 4 Beneficiary's TIN

5 Executor's name 6 Executor's phone no.

7 Executor's address

Part 2. Information on Property AcquiredA

Item No.

B

Description of property acquired from the decedent and the Schedule and item number where reported on the decedent's Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. If the beneficiary acquired a partial

interest in the property, indicate the interest acquired here.

C

Did this asset

increase estate tax liability?

(Y/N)

D

Valuation Date

E

Estate Tax Value

(in U.S. dollars)

Form 706, Schedule , Item

Description —

Notice to Beneficiaries:You have received this schedule to inform you of the value of property you received from the estate of the decedent named above. Retain this schedule for tax reporting purposes. If the property increased the estate tax liability, Internal Revenue Code section 1014(f) applies, requiring the consistent reporting of basis information. For more information on determining basis, see IRC section 1014 and/or consult a tax professional.

Page A-1

1

Page ofForm 8971 (1-2016)

SCHEDULE A—Continuation SheetUse only if you need additional space to report property acquired (or expected to be acquired) by the beneficiary.


Part 1. General Information1 Decedent's name 2 Decedent’s SSN 3 Beneficiary's name 4 Beneficiary's TIN

5 Executor's name 6 Executor's phone no.

7 Executor's address

Part 2. Information on Property AcquiredA

Item No.

(continue from

previous page)

B

Description of property acquired from the decedent and the Schedule and item number where reported on the decedent's Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. If the beneficiary acquired a partial

interest in the property, indicate the interest acquired here.

C

Did this asset

increase estate tax liability?

(Y/N)

D

Valuation Date

E

Estate Tax Value

(in U.S. dollars)

Notice to Beneficiaries:You have received this schedule to inform you of the value of property you received from the estate of the decedent named above. Retain this schedule for tax reporting purposes. If the property increased the estate tax liability, Internal Revenue Code section 1014(f) applies, requiring the consistent reporting of basis information. For more information on determining basis, see IRC section 1014 and/or consult a tax professional.

Page A-2

Documents

1. - CalCPA