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Instructions for Form 706 - Introductory Material

Table of Contents

Prior Revisions of Form 706 After For Decedents Dyingand Before Use Revision ofForm 706 Dated December 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

What's New

  • Use this revision of Form 706 only for the estates of decedents who died in calendar year 2011.

  • The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (Act) included several provisions affecting the 2011 Form 706. They are:

    a. Estates, generation-skipping transfers (GST), and lifetime gifts all have a maximum tax rate of 35%.

    b. The credit for transfers made by gift is reunified with the credit for transfers made at death. Both will receive a combined unified credit of $1,730,800 (basic exclusion amount of $5,000,000) under section 2010.

    c. The applicable exclusion amount now may consist of a basic exclusion amount of $5,000,000 and, in the case of a surviving spouse, the unused exclusion amount of a predeceased spouse (who died after December 31, 2010). A timely and complete Form 706 filed for the predeceased spouse's estate is required, even if there is no tax due, to allow the surviving spouse to use the last predeceased spouse's unused exclusion amount. See instructions for Part 2—Tax Computation, line 9 and Part 4—General Information, line 3 and line 4.

    d. If the estate chooses not to allow the surviving spouse to take into account, for estate and gift tax purposes, the decedent's unused exclusion amount, then do one of the following: attach a statement to the Form 706 indicating that the estate is not making the election under section 2010(c)(5) or enter “No Election Under Section 2010(c)(5)” across the top of the first page of Form 706.

    e. Prior gifts must be calculated at the rate in effect at the decedent's date of death. See Worksheet TG —Taxable Gifts Reconciliation, Line 4 Worksheet, and Line 7 Worksheet (Unified Credit Allowable for Prior Periods), below.

  • Various dollar amounts and limitations in the Form 706 are indexed for inflation. For decedents dying in 2011, the following amounts are applicable:

    a. The ceiling on special-use valuation is $1,020,000.

    b. The amount used in figuring the 2% portion of estate tax payable in installments is $1,360,000. 
    The IRS will publish amounts for future years in annual revenue procedures.

    • Executors must provide documentation of their status.

    • The IRS has created a page on IRS.gov for information about Form 706 and its instructions, at www.irs.gov/form706. Information about any future developments affecting Form 706 (such as legislation enacted after we release it) will be posted on that page.

Reminders

In 2008, we added a worksheet to help executors figure how much of the estate tax may be paid in installments under section 6166. See Determine how much of the estate tax may be paid in installments under section 6166, below.

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