3.12.263  Estate and Gift Tax Returns (Cont. 2)

3.12.263.3 
Section 01 Data, Form 706 General Information

3.12.263.3.15 
Field 01PI - Payment Indicator

3.12.263.3.15.2  (01-01-2014)
Correction Procedures

  1. PI Codes are entered on Form 706 in the following priority:

    1. For balance due returns, use a "1" code if the taxpayer has checked the "Yes" box for Section 6166 or 6163 on Page 2, Part 3, Line 3/Line 4, or has an attachment requesting deferment or installments citing these Sections.

    2. For refund/zero liability returns, or for Balance Due returns on which the taxpayer is not requesting deferment of installments, use a "0" (zero) code.

      Note:

      The only PI codes now used will be "0" and "1" .

3.12.263.3.16  (01-01-2014)
Field 01CRD - Correspondence Received Date

  1. When needed the correspondence received date is edited in YYYYMMDD format.

  2. The 45-day interest free period for processing refund returns does not begin until we receive the return in a processable format. If we correspond for missing information, the correspondence received date must be input to the Master File for the purpose of computing credit interest.

3.12.263.3.16.1  (01-01-2014)
Invalid Conditions

  1. Field 01CRD is invalid if:

    1. It is not in YYYYMMDD format.

    2. It is not numeric.

    3. The month is not 01-12.

    4. The day is not valid for the month.

    5. 01CRD is not greater than the IRS received date.

    6. 01CRD is not greater than the return due date.

    7. 01CRD is greater than the processing date.

3.12.263.3.16.2  (01-01-2014)
Correction Procedures

  1. Check for coding and transcription errors and correct as needed.

    If Then
    No reply or the correspondence was undeliverable Enter CCC "3" in Field 01CCC. NOTE: This will suppress credit interest from being generated.
    Entity Control has assigned an SSN to the return If Entity has edited an "A" or "E" in left margin of the return, enter the Entity Assignment Date in Field 01CRD if it is later than the IRS received date and return due date.
    The taxpayer replies to our request for missing information Enter the correspondence received date in Field 01CRD if the correspondence was necessary and was received after the return due date. See IRM 3.12.38.19.8 for determining the correspondence received date.

3.12.263.3.17  (01-01-2014)
Field 01RD> - Return Due Date

  1. This is a computer-generated field that calculates the return due date as 9 months after the DOD in YYYYMMDD format.

    Exception:

    If the date of death is between January 1, 2010, and December 17, 2010 (inclusively); the return due date is September 19, 2011, as mandated in the Extender's Legislation (PL 111-312).

  2. This field is used to determine if a return is filed timely. If the return is filed late, it is used to calculate any applicable penalties and interest.

3.12.263.3.17.1  (01-01-2014)
Invalid Conditions

  1. None. (This is a computer-generated field.)

3.12.263.3.17.2  (01-01-2014)
Correction Procedures

  1. None.

3.12.263.4  (01-01-2014)
Section 02 Data, Form 706 General Information

  1. Section 02 field designators, line numbers, field lengths and titles are listed below. It is transcribed in dollars and cents or dollars only, whichever is applicable. Field 0203C may be positive or zero (0). Section 02 cannot be present on a "G" coded amended return (delete if present).

3.12.263.4.1  (01-01-2014)
Processing Field Errors

  1. Correct transcription errors if the field is not entirely numeric.

  2. If the money amounts on a return exceed the maximum field length allowable, take the following action:

    1. Enter the maximum amount allowable on the original return. Recompute the tax data and enter the corrected amount(s) on the screen display and the return. DO NOT SEND A TAXPAYER NOTICE CODE to the taxpayer.

    2. Write on the original return, "Dummy Return prepared due to overflow document" .

    3. Prepare a "Dummy Return" by computing and entering the remaining overflow money amount(s) for the correct fields. On the top of the return write "Prepared from Overflow Return" ; write the entity data and DLN from the original return; enter CCC "G" in Field 01CCC; and write "Signature on Original Return" in the signature area.

    4. Attach routing slip to the completed "Dummy Return" and send to Receipt and Control to have the "Dummy Return" numbered and processed.

3.12.263.4.2  (01-01-2014)
Error Record Format - Section 02

  1. The Error Record Format for Section 02 is listed as follows:

    Field
    Designator
    Maximum
    Characters
    Field Name Location
    0201 12 Total Gross Estate Page 1, Part 2, Line 1
    0202 12 Total Allowable Deductions Page 1, Part 2, Line 2
    0203A 12 Tentative Taxable Estate Page 1, Part 2, Line 3a
    >>>> 12 Tentative Taxable Estate
    Computer Generated
     
    0203B 12 State Death Tax Deduction Page 1, Part 2, Line 3b
    0203C 12 Taxable Estate Page 1, Part 2, Line 3c
    >>>> 12 Taxable Estate
    Computer Generated
     
    0204 12 Adjusted Taxable Gifts Page 1, Part 2, Line 4
    0205 12 Net Taxable Estate Page 1, Part 2, Line 5
    >>>> 12 Net Taxable Estate
    Computer Generated
     
    0206 12 Tentative Tax Page 1, Part 2, Line 6
    >>>> 12 Tentative Tax
    Computer Generated
     
    02GTT 12 Gross Tax Tentative Page 1, Part 2, Line 7a (Tax Years 2001 and prior)
    02NTT 12 Net Tax Tentative Page 1, Part 2, Line 7b (Tax Years 2001 and prior)
    >>>> 12 Net Tax Tentative
    Computer Generated
     
    02TNT 12 Total Net Tax Tentative Page 1, Part 2, Line 7c (Tax Years 2001 and prior)
    >>>> 12 Total Net Tax Tentative
    Computer Generated
     
    02TTT 12 Total Transfer Taxes Tentative Page 1, Part 2, Line 8 (Tax Years 2001 and prior)
    >>>> 12 Total Transfer Taxes Tentative
    Computer Generated
     
    0207 12 Aggregate Gift Tax Page 1, Part 2, Line 7
    0208 12 Gross Estate Tax Page 1, Part 2, Line 8
    >>>> 12 Gross Estate Tax
    Computer Generated
     
    0209 12 Unified Credit (2011 and prior revisions) Page 1, Part 2, Line 9
    >>>> 12 Unified Credit (2011 and prior revisions)
    Computer Generated
     
    0209A 15 Basic Exclusion Amount Page 1, Part 2, Line 9a
    0209B 15 DSUE Amount Page 1, Part 2, Line 9b
    0209C 15 Applicable Exclusion Amount Page 1, Part 2, Line 9c
    >>>> 15 Applicable Exclusion Amount
    Computer Generated
     
    0209D 15 Applicable Credit Amount Page 1, Part 2, Line 9d
    >>>> 15 Applicable Credit Amount
    Computer Generated
     
    0210 12 Adjustment to Unified/Applicable Credit Page 1, Part 2, Line 10
    0211 12 Allowable Unified/Applicable Credit Page 1, Part 2, Line 11
    >>>> 12 Allowable Unified/Applicable Credit
    Computer Generated
     
    0212 12 Balance After Unified/Applicable Adjustment Page 1, Part 2, Line 12
    >>>> 12 Balance After Unified/Applicable Adjustment
    Computer Generated
     
    02TBA 12 State Death Tax Credit (Table B amount) Page 1, Part 2, Line 13A (Tax Years 2002-2004) (new Table B figure preceding
    Line 13 (Page 1, Form 706.
    >>>> 12 State Death Tax Credit
    Computer Generated
     
    02SDC 12 State Death Tax Credit Page 1, Part 2, Line 13B (Tax Years 2002-2004)
    >>>> 12 State Death Tax Credit
    Computer Generated
     
    02BSD 12 Balance After State Death Tax Credit Page 1, Part 2, Line 14 (Tax Years 2002-2004)
    >>>> 12 Balance After State Death Tax Credit
    Computer Generated
     

3.12.263.4.3  (01-01-2014)
Field 0201 - Total Gross Estate

  1. This field is transcribed from Page 1, Part 2, Line 1, of the return and is verified by Code and Edit tax examiners. It is transferred from Page 3, Part 5, Item number 13, of the Recapitulation schedule. The amount transcribed will be either the taxpayer's amount or the examiner's corrected amount. It must be entered in dollars and cents or dollars only, whichever is applicable.

  2. This line shows the total amount of assets owned by the decedent at death. After deductions are taken and certain gifts given during life are added back, this amount provides the basis upon which the estate tax (before credits or other adjustments) is calculated.

3.12.263.4.3.1  (01-01-2014)
Invalid Conditions

  1. Field 0201 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.3.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.4  (01-01-2014)
Field 0202 - Total Allowable Deductions

  1. This field is transcribed from Page 1, Part 2, Line 2 of the return and is verified by Code and Edit examiners. It is transferred from Page 3, Part 5, Item number 24 of the return. The amount transcribed will be either the taxpayer's amount or the examiner's corrected amounts.

  2. After allowable deductions are taken and certain gifts given during life are added back, this amount provides the basis upon which the estate tax (before credits or other adjustments) is calculated.

3.12.263.4.4.1  (01-01-2014)
Invalid Condition

  1. Field 0202 is invalid if it is not all numeric or exceeds 9,999,999,999.99.

3.12.263.4.5  (01-01-2014)
Field 0203A - Tentative Taxable Estate

  1. This field is transcribed from Page 1, Part 2, Line 3a of the return. It is computed by subtracting Page 1, Part 2, Line 2 from Line 1 (Fields 0202 and 0201). This field can be positive or zero.

3.12.263.4.5.1  (01-01-2014)
Invalid Conditions

  1. Field 0203A is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.5.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.6  (01-01-2014)
Field 0203B - State Death Tax Deduction

  1. This field is transcribed from Page 1, Part 2, Line 3b of the return. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. The state death tax credit has been repealed for estates of decedents dying after December 31, 2004. Beginning in 2005, the credit was replaced with a state death tax deduction against the value of the gross federal estate.

3.12.263.4.6.1  (01-01-2014)
Invalid Conditions

  1. Field 0203B is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.6.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.7  (01-01-2014)
Field 0203C - Taxable Estate

  1. This field is transcribed from Page 1, Part 2, Line 3c of the return. It is computed by subtracting Page 1, Part 2, Line 3b from Line 3a (Fields 0203B and 0203A). This field can be positive or zero.

  2. This is the amount on which, after certain gifts given during life are added back, the estate tax (before credits or other adjustments) is calculated.

3.12.263.4.7.1  (01-01-2014)
Invalid Conditions

  1. Field 0203C is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.7.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.8  (01-01-2014)
Field 0204 - Adjusted Taxable Gifts

  1. This field is transcribed from Page 1, Part 2, Line 4 of the return. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Estate and gift taxes have a unified tax structure. Tax is calculated on assets given as gifts after December 31, 1976, as well as assets owned at death. Therefore, those gifts not excludable under the Internal Revenue Code must be added to the taxable estate to determine the amount upon which estate tax can be imposed.

3.12.263.4.8.1  (01-01-2014)
Invalid Conditions

  1. Field 0204 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.8.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.9  (01-01-2014)
Field 0205 - Net Taxable Estate

  1. This field is transcribed from Page 1, Part 2, Line 5 of the return. It is computed by adding Page 1, Part 2, Lines 3C and 4 (Fields 0203C and 0204).

  2. This is the amount on which the tentative tax is calculated.

3.12.263.4.9.1  (01-01-2014)
Invalid Conditions

  1. Field 0205 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.9.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.10  (01-01-2014)
Field 0206 - Tentative Tax

  1. This field is transcribed from Page 1, Part 2, Line 6. The computer figures the tax in this field by using the amount in Net Taxable Estate Computer and Tax Table A on Page 4 of the instructions.

  2. This is the basic estate tax, subject to adjustments.

3.12.263.4.10.1  (01-01-2014)
Invalid Conditions

  1. Field 0206 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.10.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.11  (01-01-2014)
Field 0207 - Aggregate Gift Tax

  1. This field is transcribed from Page 1, Part 2, Line 7. It is the total amount of gift tax payable on gifts made after December 31, 1976.

  2. Taxable gifts made after December 31, 1976, are taken into account in computing the estate tax upon death. The gift and estate taxes are not separate taxes. Rather, they are designed to impose a tax or transfer of assets, whether made during life or upon death. This line gives a credit against estate tax for gift taxes payable. Were this not so, an individual would have to pay tax on the gift twice, once when he/she made the gift and again at death.

3.12.263.4.11.1  (01-01-2014)
Invalid Conditions

  1. Field 0207 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.11.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.12  (01-01-2014)
Field 0208 - Gross Estate Tax

  1. This field is transcribed from Page 1, Part 2, Line 8 (Field 0208). It is computed by subtracting Page 1, Part 2, Line 7 from Line 6 (Fields 0207 and 0206).

  2. See IRM 3.12.263.4.11, Field 0207-Aggregate Gift Tax, for the reasons this field allows gift taxes paid to be subtracted from estate tax.

3.12.263.4.12.1  (01-01-2014)
Invalid Conditions

  1. Field 0208 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.12.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.13  (01-01-2014)
Field 0209 - Unified Credit (2011 and prior revisions)

  1. This field is transcribed from (2011 and prior revisions) Page 1, Part 2, Line 9 (Field 0209). The computer will math verify this field by using the DOD (Field 01DOD) and the Unified Credit amounts.

  2. The Unified Credit is similar to the standard deduction or personal exemptions allowed on an individual income tax return. Individuals do not pay income tax on income that is less than the total amount of the standard deduction or personal exemptions. Nor do they pay estate or gift taxes on gifts or bequests whose total tax is less than the Unified Credit. There are 2 differences between the Unified Credit and the standard deduction/personal exemption. First the Unified Credit is a credit against tax, not a deduction from income or assets. The credit is subtracted against the estate tax, not the total amount of the estate. Second, the Unified Credit is much larger than the standard deduction/personal exemption.

3.12.263.4.13.1  (01-01-2014)
Invalid Conditions

  1. Field 0209 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.13.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.14  (01-01-2014)
Field 0209A - Basic Exclusion Amount

  1. This field is transcribed from Page 1, Part 2, Line 9a and is valid for DOD in 2012 and subsequent.

3.12.263.4.14.1  (01-01-2014)
Invalid Conditions

  1. Field 0209A is invalid if it is not all numeric or exceeds $9,999,999,999.99.

    Note:

    For DOD in 2013, the Basic Exclusion Amount is $5,250,000. If 0209A exceeds that amount then both 0209A and 01DOD are set to error.

3.12.263.4.14.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.15  (01-01-2014)
Field 0209B - DSUE Amount

  1. This field is transcribed from Page 1, Part 2, Line 9b and is valid for DOD in 2012 and subsequent revisions of Form 706.

  2. If the decedent had a spouse who died on or after January 1, 2011, whose estate did not use all of its applicable exclusion against gift or estate tax liability, a Deceased Spousal Unused Exclusion (DSUE) amount may be available for use by the decedent's estate. If the predeceased spouse died in 2011, the DSUE amount was calculated and attached to his or her Form 706. If the predeceased spouse died in 2012 or after, this amount is found in Part 6, Section C of the Form 706 filed by the estate of the decedent's predeceased spouse. The amount to be entered on line 9b is calculated in Part 6, Section D.

3.12.263.4.15.1  (01-01-2014)
Invalid Conditions

  1. Field 0209B is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.15.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.16  (01-01-2014)
Field 0209C - Applicable Exclusion Amount

  1. This field is transcribed from Page 1, Part 2, Line 9c and is valid for DOD in 2012 and subsequent.

3.12.263.4.16.1  (01-01-2014)
Invalid Conditions

  1. Field 0209C is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.16.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.17  (01-01-2014)
Field 0209D - Applicable Credit Amount

  1. This field is transcribed from Page 1, Part 2, Line 9d and is valid for DOD in 2012 and subsequent.

3.12.263.4.17.1  (01-01-2014)
Invalid Conditions

  1. Field 0209D is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.17.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.18  (01-01-2014)
Unified/Applicable Credit Table

  1. The Unified/Applicable Credit for the following years is:

    Year
    (Date of Death)
    Maximum Amount of Credit
    (Estate Tax Only)
    Exemption Equivalent Amount
    1987 thru 1997 192,800 600,000
    1998 202,050 625,000
    1999 211,300 650,000
    2000 and 2001 220,550 675,000
    2002 and 2003 345,800 1,000,000
    2004 and 2005 555,800 1,500,000
    2006 thru 2008 780,800 2,000,000
    2010 and 2011* 1,730,800* 5,000,000
    2012** 1,772,800** 5,120,000
    2013** 2,045,800** 5,250,000

    Note:

    If the amount in Field 0209 (Unified Credit -2011 and prior returns) is lower than the maximum amount of Unified Credit allowed for that year, the taxpayer may have filed a Schedule T (Qualified Family-Owned Business Interest (i.e., QFOBI). If a Schedule T was filed, or if Line 24 (Page 3, Part 5 (Recapitulation), Form 706) contains an entry, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    *2011 entries for Field 0209 (Unified Credit - 2011 and prior returns) can be greater than the amount from the table's middle column because of the Portability election.

    ** For 2012 and subsequent years, Field 0209A (Basic Exclusion Amount) should equal the amount on the table's right column. Field 0209D (Applicable Credit Amount) may be greater than the amount from the table's middle column because of the Portability election.

3.12.263.4.19  (01-01-2014)
Field 0210 - Adjustment to Unified/Applicable Credit

  1. This "dual use" field is transcribed from Page 1, Part 2, Line 10. The maximum allowable credit is $6,000 for this field. "Dual use" meaning either term will be correct for programming purposes.

  2. At the time the current Unified/Applicable Credit system was created, Congress provided that the taxpayer's use of the former gift tax exemption for gifts made between September 8 and December 31, 1976, would result in an adjustment to the Unified/Applicable Credit applicable to the taxpayer's transfers after 1976 (reduction in Unified/Applicable Credit is 20% of exemption claimed).

3.12.263.4.19.1  (01-01-2014)
Invalid Conditions

  1. Field 0210 is invalid if it is not all numeric or exceeds $9,999,999,999.99.

3.12.263.4.19.2  (01-01-2014)
Correction Procedure

  1. Check for coding and transcription errors and correct as needed.

3.12.263.4.20  (01-01-2014)
Field 0211 - Allowable Unified/Applicable Credit

  1. This "dual use" field is transcribed from Page 1, Part 2, Line 11. It is computed by subtracting Page 1, Part 2, Line 10 from Line 9d (Line 9 for 2011 and prior revisions) (Fields 0210 and 0209d).

  2. At the time the Unified/Applicable Credit was created, Congress provided that the taxpayer's use of the former gift tax exemption for gifts made between September 8, and December 31, 1976, would result in an adjustment to the Unified/Applicable Credit applicable to the taxpayer's transfers after 1976.


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