Use Tax Form 706-instructions: Instructions for Form 706-QDT as a stand alone tax form calculator to quickly calculate specific amounts for your 2023 tax return. Alternatively you can use one of our Combined Federal and State Tax Estimator to quickly calculate your salary, tax and take home pay.
Instructions for Form 706-QDT Column A Column B Column C Column D $0 $10000 $0 18% Worksheet TG—Taxable Gifts Reconciliation Gifts a. b. Note. For the definition of a taxable gift, see section 2503. Follow Form 709. That is, include only the decedent’s one-half of split gifts, whether the gifts were made by the decedent or the decedent’s spouse. In addition to gifts reported on Form 709, you must include any taxable gifts in excess of the annual exclusion that were not reported on Form 709. c. d. e. f. 1. Total taxable gifts made before 1977Gifts 2. Totals for gifts made after 1976Line 4 Worksheet—Adjusted Taxable Gifts Made After 1976 1 Taxable gifts made after 1976. Enter the amount from Worksheet TG, line 2, column b 1 2 Taxable gifts made after 1976 reportable on Schedule G. Enter the amount from Worksheet TG, line 2, column c 2 3 Taxable gifts made after 1976 that qualify for “special treatment.” Enter the amount from Worksheet TG, line 2, column d 3 4 Add lines 2 and 3 4 5 Adjusted taxable gifts. Subtract line 4 from line 1. Enter here and on Part 2—Tax Computation, line 4 5 Line 7 Worksheet – Submit a copy with Form 706 Line 7 Worksheet Part A- Used to determine Applicable Credit Allowable for Prior Periods after 1976 (a) Tax Period Pre-1977 (b) Taxable Gifts for Applicable Period (c) Taxable Gifts for Prior Periods (d) Cumulative Taxable Gifts Including Applicable Period (add Row (b) and Row (c)) (e) Tax at Date of Death Rates for Prior Gifts (from Row (c)) (f) Tax at Date of Death Rates for Cumulative Gifts including Applicable Period (from Row (d)) (g) Tax at Date of Death Rates for Gifts in Applicable Period (subtract Row (e) from Row (f)) (h) Total DSUE applied from Prior Periods and Applicable Period (from Line 2 of Schedule C of Applicable Period Form 709) (i) Basic Exclusion for Applicable Period (Enter the amount from the Table of Basic Exclusion Amounts) (j) Basic Exclusion amount plus Total DSUE applied in Prior Periods and Applicable Period (add Row (h) and Row (i)) (k) Maximum Applicable Credit amount based on Row (j) (Using Table A—Unified Rate Schedule) (l) Applicable Credit amount used in Prior Periods (add Row (l) and Row (n) from prior period) (m) Available Credit in Applicable Period (subtract Row (l) from Row (k)) (n) Credit Allowable (lesser of Row (g) or Row (m)) (o) Tax paid or payable at Date of Death rates for Applicable Period (subtract Row (n) from Row (g)) (p) Tax on Cumulative Gifts less tax paid or payable for Applicable Period (subtract Row (o) from Row (f)) (q) Cumulative Taxable Gifts less Gifts in the Applicable Period on which tax was paid or payable based on Row (p) (Using the Taxable Gift Amount Table) (r) Gifts in the Applicable Period on which tax was payable (subtract Row (q) from Row (d)) Line 7 Worksheet Part B 1 Total gift taxes payable on gifts after 1976 (sum of amounts in Row (o)). 2 Gift taxes paid by the decedent on gifts that qualify for “special treatment.” Enter the amount from Worksheet TG, line 2, col. (e). 3 Subtract line 2 from line 1. 4 Gift tax paid by decedent's spouse on split gifts included on Schedule G. Enter amount from Worksheet TG, line 2, col. (f). 5 Add lines 3 and 4. Enter here and on Part 2—Tax Computation, line 7. 6 Cumulative lifetime gifts on which tax was paid or payable. Enter this amount on line 3, Section C, Part 6 of Form 706 (sum of amounts in Row (r)). Footnotes: Taxable Gift Amount Table Line 3 Worksheet—Adjusted Gross Estate Column A Column B Column C Column D Amount in Row (p) Line 7 Worksheet over... Amount in Row (p) Line 7 Worksheet not over... Property Value on Amount in Column A Rate (Divisor) on excess of amount in Column A 0 1800 0 18% Table of Basic Exclusion Amounts Period Basic Exclusion Amount Credit Equivalent at 2016 rates 1977 (Quarters 1 and 2) $30000 $6000 1 What is the value of the decedent's interest in closely-held business(es) included in the gross estate (less value of passive assets, as mentioned in section 6166(b)(9))? 2 What is the value of the gross estate (Form 706, page 3, Part 5, line 13)? 3 Add lines 18, 19, and 20 from Form 706, page 3, Part 5 4 Subtract line 3 from line 2 to calculate the adjusted gross estate 5 Divide line 1 by line 4 to calculate the value the business interest bears to the value of the adjusted gross estate. For purposes of this calculation, carry the decimal to the sixth place; the IRS will make this adjustment for purposes of determining the correct amount. If this amount is less than 0, the estate does not qualify to make the election under section 6166 6 Multiply line 5 by the amount on line 16 of Form 706, page 1, Part 2. This is the maximum amount of estate tax that may be paid in installments under section 6166. (Certain GST taxes may be deferred as well; see section 6166(i) for more information.) Table of Estimated Values If the total estimated value of the assets eligible for the special rule under Reg. section 20.2010-2(a)(7)(ii) is more than But less than or equal to Include this amount on lines 10 and 23: $0 $250000 $250000 $250000 $500000 $500000 $500000 $750000 $750000 $750000 $1000000 $1000000 $1000000 $1250000 $1250000 $1250000 $1500000 $1500000 $1500000 $1750000 $1750000 $1750000 $2000000 $2000000 $2000000 $2250000 $2250000 $2250000 $2500000 $2500000 $2500000 $2750000 $2750000 $2750000 $3000000 $3000000 $3000000 $3250000 $3250000 $3250000 $3500000 $3500000 $3500000 $3750000 $3750000 $3750000 $4000000 $4000000 $4000000 $4250000 $4250000 $4250000 $4500000 $4500000 $4500000 $4750000 $4750000 $4750000 $5000000 $5000000 $5000000 $5250000 $5250000 $5250000 $5450000 $5450000 Schedule A–Example 1 In this example, alternate valuation is not adopted; the date of death is January 1, 2016. Item Description Alternate valuation date Alternate value Value at date of death 1 House and lot, 1921 William Street, NW, Washington, DC (lot 6, square 481). Rent of $8100 due Rent due on item 1 for quarter ending November 1, 2015, but not collected at date of death Rent accrued on Item 1 for November and December 2015 2 House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1800 payable Rent due on Item 2 for December 2015, but not collected at death . Schedule A–Example 2 In this example, alternate valuation is adopted; the date of death is January 1, 2016. Item Description Alternate valuation date Alternate value Value at date of death 1 House and lot, 1921 William Street, NW, Washington, DC (lot 6, square 481). Rent of $8100 due at Rent due on item 1 for quarter ending November 1, 2015, but not collected until February 1, 2016 Rent accrued on Item 1 for November and December 2015, collected on February 1, 2016 2 House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1800 payable Rent due on Item 2 for December 2015, but not collected until February 1, 2016 Schedule B Examples Example showing use of Schedule B where the alternate valuation is not adopted; date of death, January 1, 2016 Item Description, including face amount of bonds or number of shares and par value where Unit value Alternate valuation date Alternate value Value at date of death CUSIP number or 1 $60000-Arkansas Railroad Co. first mortgage 4%, 20-year XXXXXXXXX $ $ Interest coupons attached to bonds, item 1, due and payable on Interest accrued on item 1, from Nov. 1, 2015, to Jan. 1, 2016 2 500 shares Public Service Corp., common; N.Y. Exchange XXXXXXXXX Dividend on item 2 of $2 per share declared Dec. 10, 2015, Example showing use of Schedule B where the alternate valuation is adopted; date of death, January 1, 2016 Item Description, including face amount of bonds or number of shares and par value where Unit value Alternate valuation date Alternate value Value at date of death CUSIP number or 1 $60000-Arkansas Railroad Co. first mortgage 4%, 20-year bonds, XXXXXXXXX $ $ $30000 of item 1 distributed to legatees on Apr. 1, 2016 $30000 of item 1 sold by executor on May 1, 2016 Interest coupons attached to bonds, item 1, due and payable on Interest accrued on item 1, from Nov. 1, 2015, to Jan. 1, 2016. 1 500 shares Public Service Corp., common; N.Y. Exchange XXXXXXXXX Not disposed of within 6 months following death . Dividend on item 2 of $2 per share declared Dec. 10, 2015, paid Example of effective discount: a Pro-rata value of limited liability company (before any discounts) $100 b Minus: 10% discounts for lack of control (10) c Marketable minority interest value (as if freely traded minority interest value) $90 d Minus: 15% discount for lack of marketability (13.5) e Non-marketable minority interest value $76.5 Calculation of effective discount: (a minus e) divided by a = effective discount ($100 - $76.5) ÷ $100 = 23.5% Example—Listing Property Interests on Schedule M Item Description of property interests passing to surviving spouse. Amount All other property: B1 One-half the value of a house and lot, 256 South West Street, held by decedent and surviving spouse as joint tenants with right of survivorship under deed dated July 15, 1975 (Schedule E, Part I, item 1) $182500 B2 Proceeds of Metropolitan Life Insurance Company policy No. 104729, payable in one sum to surviving spouse (Schedule D, item 3) 200000 B3 Cash bequest under Paragraph Six of will 100000 Period of Time Exceeding Not Exceeding Percent Allowable - - - - 2 years 100 Worksheet for Schedule Q—Credit for Tax on Prior Transfers Part I Transferor’s tax on prior transfers Total for all transfers Item Transferor (From Schedule Q) A B C 1. Gross value of prior transfer to this transferee 2. Death taxes payable from prior transfer 3. Encumbrances allocable to prior transfer 4. Obligations allocable to prior transfer 5. Marital deduction applicable to line 1 above, as shown on transferor’s Form 706 6. TOTAL. Add lines 2, 3, 4, and 5 7. Net value of transfers. Subtract line 6 from line 1 8. Net value of transfers. Add columns A, B, and C of line 7 9. Transferor’s tentative taxable estate (see line 3a, page 1, Form 706) 10. Federal estate tax paid 11. State death taxes paid 12. Foreign death taxes paid 13. Other death taxes paid 14. TOTAL taxes paid. Add lines 10, 11, 12, and 13 15. Value of transferor’s estate. Subtract line 14 from line 9 16. Net federal estate tax paid on transferor’s estate 17. Credit for gift tax paid on transferor’s estate with respect to pre-1977 gifts (section 2012) 18. Credit allowed transferor’s estate for tax onprior transfers from prior transferor(s) who died 19. Tax on transferor’s estate. Add lines 16, 17, and 18 20. Transferor’s tax on prior transfers ((line 7 ÷ line 15) × line 19 of respective estates) Part II Transferee’s tax on prior transfers Item Amount 21. Transferee’s actual tax before allowance of credit for prior transfers (see instructions) 21 22. Total gross estate of transferee from line 1 of the Tax Computation, page 1, Form 706 22 23. Net value of all transfers from line 8 of this worksheet 23 24. Transferee’s reduced gross estate. Subtract line 23 from line 22 24 25. Total debts and deductions (not including marital and charitable deductions) 25 26. Marital deduction from item 21, Recapitulation, page 3, Form 706 (see instructions) 26 27. Charitable bequests from item 22, Recapitulation, page 3, Form 706 27 28. Charitable deduction proportion ( [ line 23 ÷ (line 22 – line 25) ] × line 27 ) 28 29. Reduced charitable deduction. Subtract line 28 from line 27 29 30. Transferee’s deduction as adjusted. Add lines 25, 26, and 29 30 31. (a) Transferee’s reduced taxable estate. Subtract line 30 from line 24 31(a) (b) Adjusted taxable gifts 31(b) (c) Total reduced taxable estate. Add lines 31(a) and 31(b) 31(c) 32. Tentative tax on reduced taxable estate 32 33. (a) Post-1976 gift taxes paid 33(a) (b) Unified credit (applicable credit amount) 33(b) (c) Section 2012 gift tax credit 33(c) (d) Section 2014 foreign death tax credit 33(d) (e) Total credits. Add lines 33(a) through 33(d) 33(e) 34. Net tax on reduced taxable estate. Subtract line 33(e) from line 32 34 35. Transferee’s tax on prior transfers. Subtract line 34 from line 21 35 Year of transfer GST exemption 1999 $1010000 WORKSHEET (inclusion ratio): 1 Total estate and gift tax value of all of the property interests that passed to the trust 2 Estate taxes, state death taxes, and other charges actually recovered from the trust 3 GST taxes imposed on direct skips to skip persons other than this trust and borne by the property transferred to this trust 4 GST taxes actually recovered from this trust (from Schedule R, Part 2, line 8 or Schedule R-1, line 6) 5 Add lines 2 through 4 6 Subtract line 5 from line 1 7 Add columns C and D of line 9 8 Divide line 7 by line 6 9 Trust's inclusion ratio. Subtract line 8 from 1.000 Form Recordkeeping Learning about the law or the form Preparing the form Copying, assembling, and sending the form to the IRS 706 1 hr., 25 min. 1 hr., 50 min. 3 hr., 42 min. 48 min. Schedule A - - - - 15 min. 12 min. 20 min. Schedule A-1 33 min. 31 min. 1 hr., 15 min. 1 hr., 3 min. Schedule B 19 min. 9 min. 16 min. 20 min. Schedule C 19 min. 1 min. 13 min. 20 min. Schedule D 6 min. 6 min. 13 min. 20 min. Schedule E 39 min. 6 min. 36 min. 20 min. Schedule F 26 min. 8 min. 18 min. 20 min. Schedule G 26 min. 21 min. 12 min. 13 min. Schedule H 26 min. 6 min. 12 min. 13 min. Schedule I 13 min. 30 min. 15 min. 20 min. Schedule J 26 min. 6 min. 16 min. 20 min. Schedule K 13 min. 9 min. 18 min. 20 min. Schedule L 13 min. 4 min. 15 min. 20 min. Schedule M 13 min. 34 min. 25 min. 20 min. Schedule O 19 min. 12 min. 21 min. 20 min. Schedule P 6 min. 15 min. 18 min. 13 min. Schedule Q - - - - 12 min. 15 min. 13 min. Worksheet for Schedule Q 6 min. 6 min. 58 min. 20 min. Schedule R 19 min. 45 min. 1 hr., 10 min. 48 min. Schedule R-1 6 min. 46 min. 35 min. 20 min. Schedule U 19 min. 26 min. 29 min. 20 min. Schedule pc - - - - 2 min. 12 min. 20min. Continuation Schedule 19 min. 1 min. 13 min. 20 min.