Instructions for Form 706 (Rev. August 2017)

1 Userid: CPMS chema: instrxLeadpct: 100%Pt. size: Draft Ok to PrintAH XSL/XMLF ileid: .. ons/I706/201708/A/XML/Cycle05/source(Ini t. & Date) _____Page 1 of 55 18:12 - 29-Aug- 2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before for form 706(Rev. August 2017 )For decedents dying after December 31, 2016 United States Estate (and Generation-Skipping Transfer) Tax ReturnDepartment of the TreasuryInternal Revenue ServiceSection references are to the Internal Revenue Code unless otherwise Revisions of form 706 For Decedents DyingUse Revision of form 706 DatedAfterand BeforeDecember 31, 1998 January 1, 2001 July 1999 December 31, 2000 January 1, 2002 November 2001 December 31, 2001 January 1, 2003 August 2002 December 31, 2002 January 1, 2004 August 2003 December 31, 2003 January 1, 2005 August 2004 December 31, 2004 January 1, 2006 August 2005 December 31, 2005 January 1, 2007 October 2006 December 31, 2006 January 1, 2008 September 2007 December 31, 2007 January 1, 2009 August 2008 December 31, 2008 January 1, 2010 September 2009 December 31, 2009 January 1, 2011 July 2011 December 31, 2010 January 1.

2 2012 August 2011 December 31, 2011 January 1, 2013 August 2012 December 31, 2012 January 1, 2017 August 2013 December 31, 2016 January 1, 2018 August of Estates Must to to the and form Off to Whole Forms and Publications to File or 1 Decedent and 2 Tax 3 Elections by the 4 General 5 6 Portability of Deceased Spousal Unused Exclusion (DSUE)..18 Schedule A Real A-1 Section 2032A B Stocks and C Mortgages, Notes, and D Insurance on the Decedent's E Jointly Owned F Other Miscellaneous Who Was a Surviving G Transfers During Decedent's H Powers of I J Funeral Expenses and Expenses Incurred in Administering Property Subject to K Debts of the Decedent and Mortgages and L Net Losses During Administration and Expenses Incurred in Administering Property Not Subject to M Bequests, etc.

3 , to Surviving Spouse (Marital Deduction)..35 Schedule O Charitable, Public, and Similar Gifts and P Credit for Foreign Death Q Credit for Tax on Prior R and R-1 Generation-Skipping Transfer U Qualified Conservation Easement PC Protective Claim for DevelopmentsFor the latest information about developments related to form 706 and its Instructions , such as legislation enacted after they were published, go to 's NewVarious dollar amounts and limitations in the form 706 are indexed for inflation. For decedents dying in 2017 , the following amounts are basic exclusion amount is $5,490, ceiling on special-use valuation is $1,120, amount used in figuring the 2% portion of estate tax payable in installments is $1,490, IRS will publish amounts for future years in annual revenue marriages.

4 For federal tax purposes, marriages of couples of the same sex are treated the same as marriages of couples of the opposite sex. The term spouse includes an individual married to a person of the same sex. However, individuals who have entered into a registered domestic partnership, civil union, or other similar relationship that isn t considered a marriage under state law aren t considered married for federal tax Exclusion and GST exemption amounts. If a decedent made a taxable gift during the decedent's lifetime to the decedent's same-sex spouse and that transfer resulted in a reduction of the decedent's available applicable exclusion amount, there is a new procedure allowing the decedent to restore the exclusion that was utilized in the transfer. For more details, see the Instructions to Part 2 Tax Computation, lines 9a through 9e, a decedent made a taxable gift during the decedent's lifetime to a skip person Aug 29, 2017 Cat.

5 No. 16779 EPage 2 of 55 Fileid: .. ons/I706/201708/A/XML/Cycle05/source18:1 2 - 29-Aug- 2017 The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before generation assignment is changed as a result of Notice 2017 -15, any GST exemption amount allocated to the gift will be deemed void. For more details, see the Instructions to Schedules R and R-1 Generation Skipping Transfer more information about the Restored Exclusion Amount and GST transfers, see Notice 2017 -15, 2017 -06 for executors filing to elect portability. Executors who did not have a filing requirement under section 6018(a), but failed to timely file form 706 to make the portability election, may be eligible for an extension under Rev. Proc. 2017 34, 2017 26 1282.

6 Executors filing to elect portability, may now file form 706 on or before the later of January 2, 2018 or the second anniversary of the decedent s death. For more information see Rev. Proc. 2017 must provide documentation of their credit for transfers made by lifetime gift(s) is reunified with the credit against transfers made at death. The applicable credit amount for 2017 is $2,141,800 (based on the basic exclusion amount of $5,490,000). This does not include any applicable credit resulting from a deceased spousal unused exclusion (DSUE) amount received from a predeceased spouse or any Restored Exclusion Amount on taxable transfers to a same-sex of estates who are not required to file form 706 under section 6018(a) but who are filing to elect portability of DSUE amount to the surviving spouse are not required to report the value of certain property eligible for the marital deduction under section 2056 or 2056A or the charitable deduction under section 2055 under the special rule of Regulations section (a)(7)(ii).

7 However, the value of those assets must be estimated and included in the total value of the gross estate. The special rule does not apply to assets whose valuation is required for eligibility under section 2032, 2032A, 2652(a)(3), 6166 or other provision of the Code or timely and complete form 706 must be filed by the executor of any estate who intends to transfer the DSUE amount to the decedent's surviving spouse, regardless of the amount of the gross estate. See Instructions for Part 6 Portability of Deceased Spousal Unused Exclusion, a timely and complete form 706 with a DSUE amount will be considered an election to transfer the DSUE amount to the surviving spouse. An executor of an estate who files a form 706 that does not elect to transfer the DSUE amount to the surviving spouse must affirmatively opt out of portability.

8 See Part 6 Portability of Deceased Spousal Unused Exclusion, Section basis reporting. On July 31, 2015, the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Public Law 114-41) was enacted. Section 2004 of the Act requires that certain estates report, both to the IRS and the recipient, the estate tax value of each asset included in the gross estate within 30 days of the due date (including extensions) of form 706 or the date of filing form 706 if the return is filed late. It also requires that the beneficiary s initial basis in certain assets be consistent with the estate tax value of the asset. Any estate required to file form 706 under section 6018(a) or 6018(b) also must file form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, to satisfy the new consistent basis reporting requirement.

9 Additional guidance and other information regarding consistent basis reporting are being developed. If you believe the new requirements impact this estate or its beneficiaries, please check for additional letter procedure. Effective for all estate tax returns filed on or after June 1, 2015, closing letters will not be issued unless requested by the executor of the estate or the designated power of attorney. To allow time for processing, please wait at least four months after filing form 706 to request a closing of an estate tax closing letter, the executor of the estate may request an account transcript, which reflects transactions including the acceptance of form 706. Account transcripts are available to authorized representatives making requests using form 4506-T. Transcripts are also available online to registered tax professionals using the Transcript Delivery System (TDS).

10 Specific Instructions are available for requesting online transcripts using the TDS or hardcopy transcripts using form 4506-T at Transcripts in Lieu of Estate Tax Closing Letters. For questions about estate tax closing letter requests, call 866-699-4083 or see the Frequently Asked Questions on Estate Tax at InstructionsPurpose of FormThe executor of a decedent's estate uses form 706 to figure the estate tax imposed by Chapter 11 of the Internal Revenue Code. This tax is levied on the entire taxable estate and not just on the share received by a particular beneficiary. form 706 also is used to figure 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).