Table of Contents
- Part I—General Information
- Part II—Trust Information
- Schedule A (Lines 1–4)
- Schedules B(1) and B(2)
- Schedule A (Lines 5–10)
- Part III—Tax Computation
Complete Form 706-GS(T) in the following order: Parts I and II, Schedule A (through line 4), Schedule B, Schedule A (lines 5 through 10), Part III.
All trusts filing Form 706-GS(T) must have an employer identification number (EIN). A nonexplicit trust, defined above, must have an EIN that is separate from any other entity's EIN and that will be used only by the entity in its capacity as the nonexplicit trust.
A trust or nonexplicit trust that does not have an EIN should apply for one on Form SS-4, Application for Employer Identification Number. You can get Form SS-4, and other IRS tax forms and publications, by visiting IRS.gov.
Send Form SS-4 to the address listed under Where To File. If you do not receive the EIN by the due date for the 706-GS(T), write “Applied for” on line 1b.
You can also apply for an EIN at www.irs.gov/businesses.
Whenever property is transferred into a pre-existing trust, the inclusion ratio must be refigured. See Multiple transfers, later, for the rule on how to refigure the inclusion ratio.
If a qualified terminable interest property deduction was taken by the settlor as donor spouse or by the executor of a deceased settlor's estate for the transfer of any property into this trust, the donor spouse or the executor, as the case may be, may have made an election at that time to treat such transfer for the purpose of the GST tax as if it was not qualified terminable interest property. In this case, you must refer to the gift tax return (Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return) of the donor spouse or the deceased settlor's estate tax return (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return) for the information needed to figure the inclusion ratio.
For the purposes of line 2, termination means the conclusion (for example, by death, lapse of time, or release of power, etc.) of an interest in property held in trust unless:
Immediately after the termination, a non-skip person has an interest in such property or
At no time after the termination is it possible for a distribution (including distributions on termination) to be made from the trust to a skip person.
Also, if you are reporting separate trusts, defined above, on this Form 706-GS(T), explain why you are treating parts of the trust as separate trusts.
You may elect alternate valuation under section 2032 for all terminations in the same trust that occurred at the same time as and as a result of the death of an individual. If you elect alternate valuation, you must use it to value all property included in those terminations.
You may not elect alternate valuation unless the election will decrease both the total value of the property interests that were subject to the termination and the total net GST tax due after the allowable credit.
Check the box on line 3 of all the applicable Schedules A if you elect alternate valuation. Once made, the election cannot be revoked. You may make the election on a late filed Form 706-GS(T), provided it is not filed later than 1 year after the due date (including extensions).
If you elect alternate valuation, value the property interest that has been terminated as follows:
Any property distributed or otherwise disposed of or separated from the trust within 6 months after the termination is valued on the date of distribution or other disposition. Value the property on the date it ceases to form a part of the trust; that is, on the date the title passes as a result of its distribution or other disposition.
Any property not distributed or otherwise disposed of within 6 months following the termination is valued on the date 6 months after the termination.
Any property or interest that is affected by mere lapse of time is valued as of the time of termination. However, you may change this date of termination value to the value as of the date of distribution or other disposition to account for any change that is not due to mere lapse of time.
If the alternate valuation date falls after the initial due date of the return, you must request an extension to file on Form 7004. The extension is automatic, so you do not have to sign the form or provide a reason for your request. See Form 7004 for more information.
The value of the portion of the trust subject to the GST tax immediately before the last addition, and
The amount of the latest addition.
Describe the real estate in enough detail so that the IRS can easily locate it for inspection and valuation. For each parcel of real estate, report the area and, if the parcel is improved, describe the improvements. For city or town property, report the street number, ward, subdivision, block and lot, etc. For rural property, report the township, range, landmarks, etc.
For stocks, give:
Number of shares;
Whether common or preferred;
Par value where needed for valuation;
Price per share;
Exact name of corporation;
Principal exchange upon which sold, if listed on an exchange; and
For bonds, give:
Quantity and denomination;
Name of obligor;
Date of maturity;
Principal exchange, if listed on an exchange;
Interest due date; and
To figure the taxable amount for a taxable termination, you may deduct expenses similar to those deductible under section 2053 from the value of the property subject to the termination.
Report here only those expenses related to the entire trust. Examples of such expenses are trustee's fees, administrative expenses, financial advisor's fees, and accounting fees.
Divide the value of the interest that has been terminated by the total value of the trust at the time of the termination; and
Multiply the result by a fraction, the numerator of which is the number of days in the year through the date of the termination, and the denominator of which is the total number of days in the year (or, if the entire trust was terminated during the year, the total number of days the trust was in existence during the year).
Report here only those expenses related solely to the interest that has terminated. Examples of these expenses are property tax on real estate, the cost of selling property, or attorney's fees for defending the title to property.
The trustee must figure the inclusion ratio for every termination. All terminations, or any parts of a single termination, that have different inclusion ratios must be shown on separate Schedules A. Identify the separate trusts by Schedule A number when showing your inclusion ratio calculation.
The inclusion ratio is the excess of 1 over the applicable fraction determined for the trust in which the termination occurred.
The value of the property transferred to the trust, minus
The sum of:
Any federal estate tax or state death tax actually recovered from the trust attributable to the property, and
Any charitable deduction allowed under section 2055 or 2522 with respect to the property.
Year of Transfer
|2004 and 2005||$1,500,000|
|2006, 2007, and 2008||$2,000,000|
|2010 and 2011||$5,000,000|
The time the transferred property would no longer be includible in the settlor's estate,
The date of a generation-skipping transfer of the property, or
The date of death of the settlor.
The exemption allocated to the current transfer and
The nontax portion of the trust immediately before the current transfer (the product of the applicable fraction and the value of all the property in the trust immediately before the current transfer).
The value of the current transfer (minus any federal estate tax or state death tax actually paid by the trust attributable to such property and any charitable deduction allowed for such property) and
The value (determined under the rules described above) of all property in the trust immediately before the current transfer.
The exemption allocated to the trust and
Interest on the exemption determined at the interest rate used to figure the estate or gift deduction for the charitable lead annuity and for the actual period of the charitable lead annuity.
Enter, from the table below, the applicable tax rate at the time the generation-skipping transfer occurred.
Table of Maximum Tax Rates
|If the generation-skipping transfer occurred||The maximum tax rate is|
|After December 31, 2002, but before January 1, 2004||49%|
|After December 31, 2003, but before January 1, 2005||48%|
|After December 31, 2004, but before January 1, 2006||47%|
|After December 31, 2005, but before January 1, 2007||46%|
|After December 31, 2006, but before January 1, 2010||45%|
|After December 31, 2009, but before January 1, 2011||0%|
|After December 31, 2010, but before January 1, 2013||35%|
|After December 31, 2012||40%|
If you have more than six Schedules A attached to this form, enter the total GST tax from all Schedules A in excess of six.
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