United States Estate (and Generation-Skipping Transfer) Tax Return 706 Form OMB No. 1545-0015 (Rev. August 2008) Estate of a citizen or resident of the United States (see separate instructions). Department of the Treasury Internal Revenue Service Decedent’s last name 1b Decedent’s Social Security No. 2 Decedent’s first name and middle initial (and maiden name, if any) 1a 3b Year domicile established 4 Date of birth Date of death 5 3a County, state, and ZIP code, or foreign country, of legal residence (domicile) at time of death Name of executor (see page 4 of the instructions) 6a Executor’s address (number and street including apartment or suite no.; city, town, or post office; state; and ZIP code) and phone no. 6b Executor’s social security number (see page 5 of the instructions) 6c Name and location of court where will was probated or estate administered 7a 7b Case number If decedent died testate, check here  and attach a certified copy of the will. 8 If you extended the time to file this Form 706, check here  9 Part 1—Decedent and Executor If Schedule R-1 is attached, check here  10 1 1 Total gross estate less exclusion (from Part 5—Recapitulation, page 3, item 12) 2 2 Tentative total allowable deductions (from Part 5—Recapitulation, page 3, item 22) 3a 3a Tentative taxable estate (before state death tax deduction) (subtract line 2 from line 1) 4 Adjusted taxable gifts (total taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts that are includible in decedent’s gross estate (section 2001(b))) 4 5 5 Add lines 3c and 4 6 Tentative tax on the amount on line 5 from Table A on page 4 of the instructions 6 Total gift tax paid or payable with respect to gifts made by the decedent after December 31, 1976. Include gift taxes by the decedent’s spouse for such spouse’s share of split gifts (section 2513) only if the decedent was the donor of these gifts and they are includible in the decedent’s gross estate (see instructions) 7 7 8 8 Gross estate tax (subtract line 7 from line 6) 9 9 Maximum unified credit (applicable credit amount) against estate tax Adjustment to unified credit (applicable credit amount). (This adjustment may not exceed $6,000. See page 6 of the instructions.) 10 10 11 11 Allowable unified credit (applicable credit amount) (subtract line 10 from line 9) Part 2—Tax Computation 12 12 Subtract line 11 from line 8 (but do not enter less than zero) 15 15 16 Credit for tax on prior transfers (from Schedule Q) 17 18 Total credits (add lines 13 and 14) 19 Net estate tax (subtract line 15 from line 12) 20 Generation-skipping transfer (GST) taxes payable (from Schedule R, Part 2, line 10) Total transfer taxes (add lines 16 and 17) Prior payments. Explain in an attached statement Balance due (or overpayment) (subtract line 19 from line 18) Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer other than the executor is based on all information of which preparer has any knowledge. Cat. No. 20548R To be filed for decedents dying after December 31, 2007, and before January 1, 2009. Phone no. ( ) b c State death tax deduction Taxable estate (subtract line 3b from line 3a) 3b 3c Credit for foreign death taxes (from Schedule(s) P). (Attach Form(s) 706-CE.) 13 14 13 14 16 17 18 19 20 Form 706 (Rev. 8-2008) For Privacy Act and Paperwork Reduction Act Notice, see page 30 of the separate instructions for this form. Sign Here Date Preparer’s signature Check if self-employed  Preparer’s SSN or PTIN Firm’s name (or yours if self-employed), address, and ZIP code EIN  Phone no. ( )     Date Paid Preparer’s Use Only Date   Signature of executor Signature of executor I declare that I am the attorney/ certified public accountant/ enrolled agent (you must check the applicable box) for the executor and prepared this return for the executor. I am not under suspension or disbarment from practice before the Internal Revenue Service and am qualified to practice in the state shown above. Form 706 (Rev. 8-2008) Estate of: Part 3—Elections by the Executor Please check the “Yes” or “No” box for each question (see instructions beginning on page 6). No Yes Do you elect alternate valuation? 1 Do you elect special-use valuation? 2 If “Yes,” you must complete and attach Schedule A-1. Do you elect to pay the taxes in installments as described in section 6166? 3 If “Yes,” you must attach the additional information described on pages 10 and 11 of the instructions. Do you elect to postpone the part of the taxes attributable to a reversionary or remainder interest as described in section 6163? 4 Part 4—General Information Authorization to receive confidential tax information under Regs. sec. 601.504(b)(2)(i); to act as the estate’s representative before the IRS; and to make written or oral presentations on behalf of the estate if return prepared by an attorney, accountant, or enrolled agent for the executor: Address (number, street, and room or suite no., city, state, and ZIP code) State Name of representative (print or type) Telephone number CAF number Date Signature 1 Death certificate number and issuing authority (attach a copy of the death certificate to this return). Decedent’s business or occupation. If retired, check here  and state decedent’s former business or occupation. 2 Marital status of the decedent at time of death: 3 Married Widow or widower—Name, SSN, and date of death of deceased spouse  Single Legally separated Divorced—Date divorce decree became final  4b Social security number 4c Amount received (see page 12 of the instructions) Surviving spouse’s name 4a Individuals (other than the surviving spouse), trusts, or other estates who receive benefits from the estate (do not include charitable beneficiaries shown in Schedule O) (see instructions). 5 Relationship to decedent Identifying number Name of individual, trust, or estate receiving $5,000 or more Amount (see instructions) All unascertainable beneficiaries and those who receive less than $5,000  Total (continued on next page) Page 2 (Note. Please attach the necessary supplemental documents. You must attach the death certificate.) (see instructions on page 12) Please check the “Yes” or “No” box for each question. No Yes Does the gross estate contain any section 2044 property (qualified terminable interest property (QTIP) from a prior gift or estate) (see page 12 of the instructions)? 6 1 2 3 4 Have federal gift tax returns ever been filed? 7a If “Yes,” please attach copies of the returns, if available, and furnish the following information: 7c Period(s) covered 7b Internal Revenue office(s) where filed Note. Some of these elections may require the posting of bonds or liens. Note. By electing section 6166, you may be required to provide security for estate tax deferred under section 6166 and interest in the form of a surety bond or a section 6324A lien. 8a Was there any insurance on the decedent’s life that is not included on the return as part of the gross estate? b Did the decedent own any insurance on the life of another that is not included in the gross estate? Decedent’s Social Security Number Form 706 (Rev. 8-2008) No Yes If you answer “Yes” to any of questions 9–16, you must attach additional information as described in the instructions. Did the decedent at the time of death own any property as a joint tenant with right of survivorship in which (a) one or more of the other joint tenants was someone other than the decedent’s spouse, and (b) less than the full value of the property is included on the return as part of the gross estate? If “Yes,” you must complete and attach Schedule E 9 Did the decedent, at the time of death, own any interest in a partnership (for example, a family limited partnership), an unincorporated business, or a limited liability company; or own any stock in an inactive or closely held corporation? 10a 11 Did the decedent make any transfer described in section 2035, 2036, 2037, or 2038 (see the instructions for Schedule G beginning on page 15 of the separate instructions)? If “Yes,” you must complete and attach Schedule G 12a Were there in existence at the time of the decedent’s death any trusts created by the decedent during his or her lifetime? Were there in existence at the time of the decedent’s death any trusts not created by the decedent under which the decedent possessed any power, beneficial interest, or trusteeship? b c Was the decedent receiving income from a trust created after October 22, 1986 by a parent or grandparent? Did the decedent ever possess, exercise, or release any general power of appointment? If “Yes,” you must complete and attach Schedule H 13 14 Did the decedent have an interest in or a signature or other authority over a financial account in a foreign country, such as a bank account, securities account, or other financial account? Was the decedent, immediately before death, receiving an annuity described in the “General” paragraph of the instructions for Schedule I or a private annuity? If “Yes,” you must complete and attach Schedule I 15 Part 5—Recapitulation Item number Value at date of death Alternate value Gross estate Schedule A—Real Estate 1 Schedule B—Stocks and Bonds 2 Schedule C—Mortgages, Notes, and Cash 3 Schedule D—Insurance on the Decedent’s Life (attach Form(s) 712) 4 Schedule E—Jointly Owned Property (attach Form(s) 712 for life insurance) 5 Schedule F—Other Miscellaneous Property (attach Form(s) 712 for life insurance) 6 Schedule G—Transfers During Decedent’s Life (att. Form(s) 712 for life insurance) 7 8 Schedule H—Powers of Appointment Schedule I—Annuities 9 Total gross estate (add items 1 through 9) 10 Item number Amount Deductions 11 Schedule K—Debts of the Decedent 12 Schedule K—Mortgages and Liens 13 Total of items 13 through 15 14 Allowable amount of deductions from item 16 (see the instructions for item 17 of the Recapitulation) 15 Schedule L—Net Losses During Administration 16 Schedule L—Expenses Incurred in Administering Property Not Subject to Claims 17 Schedule M—Bequests, etc., to Surviving Spouse 18 Schedule O—Charitable, Public, and Similar Gifts and Bequests 19 20 Tentative total allowable deductions (add items 17 through 21). Enter here and on line 2 of the Tax Computation Page 3 Schedule U—Qualified Conservation Easement Exclusion Total gross estate less exclusion (subtract item 11 from item 10). Enter here and on line 1 of Part 2—Tax Computation 21 22 Schedule J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims Was the decedent ever the beneficiary of a trust for which a deduction was claimed by the estate of a pre-deceased spouse under section 2056(b)(7) and which is not reported on this return? If “Yes,” attach an explanation 16 Part 4—General Information (continued) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 If there was a GST taxable termination (under section 2612), attach a statement to explain. Provide a copy of the trust or will creating the trust, and give the name, address, and phone number of the current trustee(s). If “Yes,” was there a GST taxable termination (under section 2612) upon the death of the decedent? d Did the decedent at any time during his or her lifetime transfer or sell an interest in a partnership, limited liability company, or closely held corporation to a trust described in question 12a or 12b? e If “Yes,” provide the EIN number to this transferred/sold item.  If “Yes,” was the value of any interest owned (from above) discounted on this estate tax return? If “Yes,” see the instructions for Schedule F on page 20 for reporting the total accumulated or effective discounts taken on Schedule F or G b Form 706 (Rev. 8-2008) SCHEDULE A—Real Estate ● For jointly owned property that must be disclosed on Schedule E, see the instructions on the reverse side of Schedule E. ● Real estate that is part of a sole proprietorship should be shown on Schedule F. ● If you elect section 2032A valuation, you must complete Schedule A and Schedule A-1. Alternate valuation date Item number Value at date of death Alternate value Description 1 Total from continuation schedules or additional sheets attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 1.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) Schedule A—Page 4 (See the instructions on the reverse side.) ● Real estate that is included in the gross estate under section 2035, 2036, 2037, or 2038 should be shown on Schedule G. ● Real estate that is included in the gross estate under section 2041 should be shown on Schedule H. Decedent’s Social Security Number Estate of: Form 706 (Rev. 8-2008) In this example, alternate valuation is not adopted; the date of death is January 1, 2008. Value at date of death Alternate valuation date Item number Alternate value Description House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100 due at end of each quarter, February 1, May 1, August 1, and November 1. Value based on appraisal, copy of which is attached 1 $550,000 Rent due on item 1 for quarter ending November 1, 2007, but not collected at date of death 8,100 Rent accrued on item 1 for November and December 2007 5,400 House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800 payable monthly. Value based on appraisal, copy of which is attached 2 375,000 Rent due on item 2 for December 2007, but not collected at date of death 1,800 In this example, alternate valuation is adopted; the date of death is January 1, 2008. Value at date of death Alternate valuation date Item number Alternate value Description House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100 due at end of each quarter, February 1, May 1, August 1, and November 1. Value based on appraisal, copy of which is attached. Not disposed of within 6 months following death 1 $550,000 $535,000 7/1/08 Rent due on item 1 for quarter ending November 1, 2007, but not collected until February 1, 2008 8,100 8,100 2/1/08 Rent accrued on item 1 for November and December 2007, collected on February 1, 2008 5,400 5,400 2/1/08 House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800 payable monthly. Value based on appraisal, copy of which is attached. Property exchanged for farm on May 1, 2008 2 375,000 369,000 5/1/08 Rent due on item 2 for December 2007, but not collected until February 1, 2008 1,800 1,800 2/1/08 Schedule A—Page 5 Instructions for Schedule A—Real Estate If the total gross estate contains any real estate, you must complete Schedule A and file it with the return. On Schedule A, list real estate the decedent owned or had contracted to purchase. Number each parcel in the left-hand column. 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 and number, ward, subdivision, block and lot, etc. For rural property, report the township, range, landmarks, etc. Also list on Schedule A real property the decedent contracted to purchase. Report the full value of the property and not the equity in the value column. Deduct the unpaid part of the purchase price on Schedule K. Report the value of real estate without reducing it for homestead or other exemption, or the value of dower, curtesy, or a statutory estate created instead of dower or curtesy. If any item of real estate is subject to a mortgage for which the decedent’s estate is liable; that is, if the indebtedness may be charged against other property of the estate that is not subject to that mortgage, or if the decedent was personally liable for that mortgage, you must report the full value of the property in the value Explain how the reported values were determined and attach copies of any appraisals. Schedule A Examples If the decedent’s estate is not liable for the amount of the mortgage, report only the value of the equity of redemption (or value of the property less the indebtedness) in the value column as part of the gross estate. Do not enter any amount less than zero. Do not deduct the amount of indebtedness on Schedule K. column. Enter the amount of the mortgage under “Description” on this schedule. The unpaid amount of the mortgage may be deducted on Schedule K. Form 706 (Rev. 8-2008) If the skip person received interests in specially valued property that were shown on Schedule R-1, show these interests on the Schedule R, Parts 2 and 3 worksheets, as appropriate. Do not use Schedule R-1 as a worksheet. Instructions for Schedule A-1. Section 2032A Valuation The election to value certain farm and closely held business property at its special-use value is made by checking “Yes” to Form 706, Part 3—Elections by the Executor, line 2. Schedule A-1 is used to report the additional information that must be submitted to support this election. In order to make a valid election, you must complete Schedule A-1 and attach all of the required statements and appraisals. Completing the special-use value worksheets. On Schedule R, Parts 2 and 3, lines 2 through 4 and 6, enter -0-. Completing the fair market value worksheets. For definitions and additional information concerning special-use valuation, see section 2032A and the related regulations. ● Schedule R, Parts 2 and 3, line 6—GST exemption allocation. If you completed Schedule R, Part 1, line 10, enter on line 6 the amount shown for the skip person on the line 10 special-use allocation schedule you attached to Schedule R. If you did not complete Schedule R, Part 1, line 10, enter -0- on line 6. Part 1. Type of Election Estate and GST tax elections. If you elect special-use valuation for the estate tax, you must also elect special-use valuation for the GST tax and vice versa. You must value each specific property interest at the same value for GST tax purposes that you value it at for estate tax purposes. Total GST tax savings. For each skip person, subtract the tax amount on line 10, Part 2 of the special-use value worksheet from the tax amount on line 10, Part 2 of the fair market value worksheet. This difference is the skip person’s total GST tax savings. Protective election. To make the protective election described in the separate instructions for Part 3—Elections by the Executor, line 2, you must check this box, enter the decedent’s name and social security number in the spaces provided at the top of Schedule A-1, and complete Part 2. Notice of Election, line 1 and lines 3 and 4, column A. For purposes of the protective election, list on line 3 all of the real property that passes to the qualified heirs even though some of the property will be shown on line 2 when the additional notice of election is subsequently filed. You need not complete columns B through D of lines 3 and 4. You need not complete any other line entries on Schedule A-1. Completing Schedule A-1 as described above constitutes a Notice of Protective Election as described in Regulations section 20.2032A-8(b). Part 3. Agreement to Special Valuation Under Section 2032A The agreement to special valuation by persons with an interest in property is required under section 2032A(a)(1)(B) and (d)(2) and must be signed by all parties who have any interest in the property being valued based on its qualified use as of the date of the decedent’s death. An interest in property is an interest that, as of the date of the decedent’s death, can be asserted under applicable local law so as to affect the disposition of the specially valued property by the estate. Any person who at the decedent’s death has any such interest in the property, whether present or future, or vested or contingent, must enter into the agreement. Included are owners of remainder and executory interests; the holders of general or special powers of appointment; beneficiaries of a gift over in default of exercise of any such power; joint tenants and holders of similar undivided interests when the decedent held only a joint or undivided interest in the property or when only an undivided interest is specially valued; and trustees of trusts and representatives of other entities holding title to, or holding any interests in the property. An heir who has the power under local law to caveat (challenge) a will and thereby affect disposition of the property is not, however, considered to be a person with an interest in property under section 2032A solely by reason of that right. Likewise, creditors of an estate are not such persons solely by reason of their status as creditors. Part 2. Notice of Election Line 10. Because the special-use valuation election creates a potential tax liability for the recapture tax of section 2032A(c), you must list each person who receives an interest in the specially valued property on Schedule A-1. If there are more than eight persons who receive interests, use an additional sheet that follows the format of line 10. In the columns “Fair market value” and “Special-use value,” you should enter the total respective values of all the specially valued property interests received by each person. GST Tax Savings If any person required to enter into the agreement either desires that an agent act for him or her or cannot legally bind himself or herself due to infancy or other incompetency, or due to death before the election under section 2032A is timely exercised, a representative authorized by local law to bind the person in an agreement of this nature may sign the agreement on his or her behalf. Because the GST tax depends on the executor’s allocation of the GST exemption and the grandchild exclusion, the skip person who receives the interests is unable to compute this GST tax savings. Therefore, for each skip person who receives an interest in specially valued property, you must attach worksheets showing the total GST tax savings attributable to all of that person’s interests in specially valued property. The Internal Revenue Service will contact the agent designated in the agreement on all matters relating to continued qualification under section 2032A of the specially valued real property and on all matters relating to the special lien arising under section 6324B. It is the duty of the agent as attorney-in-fact for the parties with interests in the specially valued property to furnish the IRS with any requested information and to notify the IRS of any disposition or cessation of qualified use of any part of the property. How to compute the GST tax savings. Before computing each skip person’s GST tax savings, you must complete Schedules R and R-1 for the entire estate (using the special-use values). For each skip person, you must complete two Schedules R (Parts 2 and 3 only) as worksheets, one showing the interests in Schedule A-1—Page 6 To compute the additional GST tax due upon disposition (or cessation of qualified use) of the property, each “skip person” (as defined in the instructions to Schedule R) who receives an interest in the specially valued property must know the total GST tax savings on all of the interests in specially valued property received. This GST tax savings is the difference between the total GST tax that was imposed on all of the interests in specially valued property received by the skip person valued at their special-use value and the total GST tax that would have been imposed on the same interests received by the skip person had they been valued at their fair market value. specially valued property received by the skip person at their special-use value and one showing the same interests at their fair market value. ● Schedule R, Parts 2 and 3, lines 2 and 3, fixed taxes and other charges. If valuing the interests at their fair market value (instead of special-use value) causes any of these taxes and charges to increase, enter the increased amount (only) on these lines and attach an explanation of the increase. Otherwise, enter -0-. Form 706 (Rev. 8-2008) Schedule A-1—Page 7 Checklist for Section 2032A Election To have a valid special-use valuation election under section 2032A, you must file, in addition to the federal estate tax return, (a) a notice of election (Schedule A-1, Part 2), and (b) a fully executed agreement (Schedule A-1, Part 3). You must include certain information in the notice of election. To ensure that the notice of election includes all of the information required for a valid election, use the following checklist. The checklist is for your use only. Do not file it with the return. 1. Does the notice of election include the decedent’s name and social security number as they appear on the estate tax return? 2. Does the notice of election include the relevant qualified use of the property to be specially valued? 3. Does the notice of election describe the items of real property shown on the estate tax return that are to be specially valued and identify the property by the Form 706 schedule and item number? 4. Does the notice of election include the fair market value of the real property to be specially valued and also include its value based on the qualified use (determined without the adjustments provided in section 2032A(b)(3)(B))? 5. Does the notice of election include the adjusted value (as defined in section 2032A(b)(3)(B)) of (a) all real property that both passes from the decedent and is used in a qualified use, without regard to whether it is to be specially valued, and (b) all real property to be specially valued? 6. Does the notice of election include (a) the items of personal property shown on the estate tax return that pass from the decedent to a qualified heir and that are used in qualified use and (b) the total value of such personal property adjusted under section 2032A(b)(3)(B)? 7. Does the notice of election include the adjusted value of the gross estate? (See section 2032A(b)(3)(A).) 8. Does the notice of election include the method used to determine the special-use value? 9. Does the notice of election include copies of written appraisals of the fair market value of the real property? 10. Does the notice of election include a statement that the decedent and/or a member of his or her family has owned all of the specially valued property for at 11. Does the notice of election include a statement as to whether there were any periods during the 8-year period preceding the decedent’s date of death during which the decedent or a member of his or her family did not (a) own the property to be specially valued, (b) use it in a qualified use, or (c) materially participate in the operation of the farm or other business? (See section 2032A(e)(6).) 12. Does the notice of election include, for each item of specially valued property, the name of every person taking an interest in that item of specially valued property and the following information about each such person: (a) the person’s address, (b) the person’s taxpayer identification number, (c) the person’s relationship to the decedent, and (d) the value of the property interest passing to that person based on both fair market value and qualified use? 13. Does the notice of election include affidavits describing the activities constituting material participation and the identity of the material participants? 14. Does the notice of election include a legal description of each item of specially valued property? (In the case of an election made for qualified woodlands, the information included in the notice of election must include the reason for entitlement to the Woodlands election.) Any election made under section 2032A will not be valid unless a properly executed agreement (Schedule A-1, Part 3) is filed with the estate tax return. To ensure that the agreement satisfies the requirements for a valid election, use the following checklist. 1. Has the agreement been signed by each and every qualified heir having an interest in the property being specially valued? 2. Has every qualified heir expressed consent to personal liability under section 2032A(c) in the event of an early disposition or early cessation of qualified use? 3. Is the agreement that is actually signed by the qualified heirs in a form that is binding on all of the qualified heirs having an interest in the specially valued property? 4. Does the agreement designate an agent to act for the parties to the agreement in all dealings with the IRS on matters arising under section 2032A? 5. Has the agreement been signed by the designated agent and does it give the address of the agent? least 5 years of the 8 years immediately preceding the date of the decedent’s death? If you are going to make the special-use valuation election on Schedule A-1, please use this checklist to ensure that you are providing everything necessary to make a valid election. CAUTION Form 706 (Rev. 8-2008) Decedent’s Social Security Number Estate of: SCHEDULE A-1—Section 2032A Valuation Part 1. Type of Election (Before making an election, see the checklist on page 7.): Protective election (Regulations section 20.2032A-8(b)). Complete Part 2, line 1, and column A of lines 3 and 4. (see instructions) Regular election. Complete all of Part 2 (including line 11, if applicable) and Part 3. (see instructions) Part 2. Notice of Election (Regulations section 20.2032A-8(a)(3)) Note. All real property entered on lines 2 and 3 must also be entered on Schedules A, E, F, G, or H, as applicable. Farm used for farming, or Qualified use—check one   1 Trade or business other than farming Real property used in a qualified use, passing to qualified heirs, and to be specially valued on this Form 706. 2 D C B A Schedule and item number from Form 706 Value based on qualified use (without section 2032A(b)(3)(B) adjustment) Adjusted value (with section 2032A(b)(3)(B) adjustment) Totals Attach a legal description of all property listed on line 2. Attach copies of appraisals showing the column B values for all property listed on line 2. 3 Real property used in a qualified use, passing to qualified heirs, but not specially valued on this Form 706. Totals If you checked “Regular election,” you must attach copies of appraisals showing the column B values for all property listed on line 3. Schedule A-1—Page 8 (continued on next page) Full value (without section 2032A(b)(3)(B) adjustment) D C B A Schedule and item number from Form 706 Value based on qualified use (without section 2032A(b)(3)(B) adjustment) Adjusted value (with section 2032A(b)(3)(B) adjustment) Full value (without section 2032A(b)(3)(B) adjustment) Before completing Schedule A-1, see the checklist on page 7 for the information and documents that must be included to make a valid election. The election is not valid unless the agreement (that is, Part 3. Agreement to Special Valuation Under Section 2032A): ● Is signed by each and every qualified heir with an interest in the specially valued property and ● Is attached to this return when it is filed. Form 706 (Rev. 8-2008) Personal property used in a qualified use and passing to qualified heirs. 4 B (continued) A (continued) B A Adjusted value (with section 2032A(b)(3)(B) adjustment) Schedule and item number from Form 706 Adjusted value (with section 2032A(b)(3)(B) adjustment) Schedule and item number from Form 706 “Subtotal” from Col. B, below left Total adjusted value Subtotal Enter the value of the total gross estate as adjusted under section 2032A(b)(3)(A).  5 6 Attach a description of the method used to determine the special value based on qualified use. Did the decedent and/or a member of his or her family own all property listed on line 2 for at least 5 of the 8 years immediately preceding the date of the decedent’s death? 7 No Yes Were there any periods during the 8-year period preceding the date of the decedent’s death during which the decedent or a member of his or her family: 8 No Yes Did not own the property listed on line 2? a Did not use the property listed on line 2 in a qualified use? b Did not materially participate in the operation of the farm or other business within the meaning of section 2032A(e)(6)? c If “Yes” to any of the above, you must attach a statement listing the periods. If applicable, describe whether the exceptions of sections 2032A(b)(4) or (5) are met. Attach affidavits describing the activities constituting material participation and the identity and relationship to the decedent of the material participants. 9 Persons holding interests. Enter the requested information for each party who received any interest in the specially valued property. 10 Name Address A B C D E F G H Special-use value Fair market value Relationship to decedent Identifying number A B C D E F G H You must attach a computation of the GST tax savings attributable to direct skips for each person listed above who is a skip person. (see instructions) Woodlands election. Check here  if you wish to make a Woodlands election as described in section 2032A(e)(13). Enter the schedule and item numbers from Form 706 of the property for which you are making this election  11 You must attach a statement explaining why you are entitled to make this election. The IRS may issue regulations that require more information to substantiate this election. You will be notified by the IRS if you must supply further information. Schedule A-1—Page 9 (Each of the qualified heirs receiving an interest in the property must sign the agreement, and the agreement must be filed with this return.) Form 706 (Rev. 8-2008) Decedent’s Social Security Number Estate of: We (list all qualified heirs and other persons having an interest in the property required to sign this agreement) , being all the qualified heirs and , being all other parties having interests in the property which is qualified real property and which is valued under section 2032A of the , Internal Revenue Code, do hereby approve of the election made by Executor/Administrator of the estate of , pursuant to section 2032A to value said property on the basis of the qualified use to which the property is devoted and do hereby enter into this agreement pursuant to section 2032A(d). The undersigned agree and consent to the application of subsection (c) of section 2032A of the Code with respect to all the property described on Form 706, Schedule A-1, Part 2, line 2, attached to this agreement. More specifically, the undersigned heirs expressly agree and consent to personal liability under subsection (c) of 2032A for the additional estate and GST taxes imposed by that subsection with respect to their respective interests in the above-described property in the event of certain early dispositions of the property or early cessation of the qualified use of the property. It is understood that if a qualified heir disposes of any interest in qualified real property to any member of his or her family, such member may thereafter be treated as the qualified heir with respect to such interest upon filing a Form 706-A, United States Additional Estate Tax Return, and a new agreement. The undersigned interested parties who are not qualified heirs consent to the collection of any additional estate and GST taxes imposed under section 2032A(c) of the Code from the specially valued property. If there is a disposition of any interest which passes, or has passed to him or her, or if there is a cessation of the qualified use of any specially valued property which passes or passed to him or her, each of the undersigned heirs agrees to file a Form 706-A, and pay any additional estate and GST taxes due within 6 months of the disposition or cessation. It is understood by all interested parties that this agreement is a condition precedent to the election of special-use valuation under section 2032A of the Code and must be executed by every interested party even though that person may not have received the estate (or GST) tax benefits or be in possession of such property. Each of the undersigned understands that by making this election, a lien will be created and recorded pursuant to section 6324B of the Code on the property referred to in this agreement for the adjusted tax differences with respect to the estate as defined in section 2032A(c)(2)(C). As the interested parties, the undersigned designate the following individual as their agent for all dealings with the Internal Revenue Service concerning the continued qualification of the specially valued property under section 2032A of the Code and on all issues regarding the special lien under section 6324B. The agent is authorized to act for the parties with respect to all dealings with the Service on matters affecting the qualified real property described earlier. This includes the authorization: ● To receive confidential information on all matters relating to continued qualification under section 2032A of the specially valued real property and on all matters relating to the special lien arising under section 6324B; ● To furnish the Internal Revenue Service with any requested information concerning the property; ● To notify the Internal Revenue Service of any disposition or cessation of qualified use of any part of the property; ● To receive, but not to endorse and collect, checks in payment of any refund of Internal Revenue taxes, penalties, or interest; ● To execute waivers (including offers of waivers) of restrictions on assessment or collection of deficiencies in tax and waivers of notice of disallowance of a claim for credit or refund; and ● To execute closing agreements under section 7121. Schedule A-1— Page 10 ● The agreement is executed by each and every one of the qualified heirs and ● The agreement is included with the estate tax return when the estate tax return is filed. There cannot be a valid election unless: (continued on next page) Part 3. Agreement to Special Valuation Under Section 2032A Form 706 (Rev. 8-2008) Part 3. Agreement to Special Valuation Under Section 2032A (continued) Decedent’s Social Security Number Estate of: ● Other acts (specify)  By signing this agreement, the agent agrees to provide the Internal Revenue Service with any requested information concerning this property and to notify the Internal Revenue Service of any disposition or cessation of the qualified use of any part of this property. Signature Name of Agent Address The property to which this agreement relates is listed in Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and in the Notice of Election, along with its fair market value according to section 2031 of the Code and its special-use value according to section 2032A. The name, address, social security number, and interest (including the value) of each of the undersigned in this property are as set forth in the attached Notice of Election. IN WITNESS WHEREOF, the undersigned have hereunto set their hands at , this day of . SIGNATURES OF EACH OF THE QUALIFIED HEIRS: Schedule A-1—Page 11 Signature of qualified heir Signature of qualified heir Signature of qualified heir Signature of qualified heir Signatures of other interested parties Signatures of other interested parties Signature of qualified heir Signature of qualified heir Signature of qualified heir Signature of qualified heir Signature of qualified heir Signature of qualified heir Signature of qualified heir Signature of qualified heir Form 706 (Rev. 8-2008) Estate of: SCHEDULE B—Stocks and Bonds (For jointly owned property that must be disclosed on Schedule E, see the instructions for Schedule E.) Alternate valuation date Description, including face amount of bonds or number of shares and par value for identification. Give CUSIP number. If trust, partnership, or closely held entity, give EIN Item number Value at date of death Alternate value Unit value 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 2.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (The instructions to Schedule B are in the separate instructions.) Schedule B—Page 12 CUSIP number or EIN, where applicable Decedent’s Social Security Number Form 706 (Rev. 8-2008) Estate of: SCHEDULE C—Mortgages, Notes, and Cash (For jointly owned property that must be disclosed on Schedule E, see the instructions for Schedule E.) Alternate valuation date Item number Value at date of death Alternate value Description 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 3.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) Schedule C—Page 13 (See the instructions on the reverse side.) Decedent’s Social Security Number Form 706 (Rev. 8-2008) Instructions for Schedule C— Mortgages, Notes, and Cash Schedule C—Page 14 Complete Schedule C and file it with your return if the total gross estate contains any: ● Mortgages, ● Notes, or ● Cash. List on Schedule C: ● Mortgages and notes payable to the decedent at the time of death. ● Cash the decedent had at the date of death. Do not list on Schedule C: ● Mortgages and notes payable by the decedent. (If these are deductible, list them on Schedule K.) List the items on Schedule C in the following order: 1. Mortgages; 2. Promissory notes; 3. Contracts by decedent to sell land; 4. Cash in possession; and 5. Cash in banks, savings and loan associations, and other types of financial organizations. What to enter in the “Description” column: For mortgages, list: ● Face value, ● Unpaid balance, ● Date of mortgage, ● Name of maker, ● Property mortgaged, ● Date of maturity, ● Interest rate, and ● Interest date. Example to enter in “Description” column: “Bond and mortgage of $50,000, unpaid balance: $17,000; dated: January 1, 1992; John Doe to Richard Roe; premises: 22 Clinton Street, Newark, NJ; due: January 1, 2012; interest payable at 10% a year—January 1 and July 1.” For promissory notes, list in the same way as mortgages. For contracts by the decedent to sell land, list: ● Name of purchaser, ● Contract date, ● Property description, ● Sale price, ● Initial payment, ● Amounts of installment payment, ● Unpaid balance of principal, and ● Interest rate. For cash in possession, list such cash separately from bank deposits. For cash in banks, savings and loan associations, and other types of financial organizations, list: ● Name and address of each financial organization, ● Amount in each account, ● Serial or account number, ● Nature of account—checking, savings, time deposit, etc., and ● Unpaid interest accrued from date of last interest payment to the date of death. Note. If you obtain statements from the financial organizations, keep them for IRS inspection. Form 706 (Rev. 8-2008) Estate of: SCHEDULE D—Insurance on the Decedent’s Life You must list all policies on the life of the decedent and attach a Form 712 for each policy. Alternate valuation date Item number Value at date of death Alternate value Description 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 4.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) Schedule D—Page 15 (See the instructions on the reverse side.) Decedent’s Social Security Number Form 706 (Rev. 8-2008) Schedule D—Page 16 If you are required to file Form 706 and there was any insurance on the decedent’s life, whether or not included in the gross estate, you must complete Schedule D and file it with the return. Insurance you must include on Schedule D. Under section 2042, you must include in the gross estate: ● Insurance on the decedent’s life receivable by or for the benefit of the estate; and ● Insurance on the decedent’s life receivable by beneficiaries other than the estate, as described below. The term ‘‘insurance’’ refers to life insurance of every description, including death benefits paid by fraternal beneficiary societies operating under the lodge system, and death benefits paid under no-fault automobile insurance policies if the no-fault insurer was unconditionally bound to pay the benefit in the event of the insured’s death. Insurance in favor of the estate. Include on Schedule D the full amount of the proceeds of insurance on the life of the decedent receivable by the executor or otherwise payable to or for the benefit of the estate. Insurance in favor of the estate includes insurance used to pay the estate tax, and any other taxes, debts, or charges that are enforceable against the estate. The manner in which the policy is drawn is immaterial as long as there is an obligation, legally binding on the beneficiary, to use the proceeds to pay taxes, debts, or charges. You must include the full amount even though the premiums or other consideration may have been paid by a person other than the decedent. Insurance receivable by beneficiaries other than the estate. Include on Schedule D the proceeds of all insurance on the life of the decedent not receivable by or for the benefit of the decedent’s estate if the decedent possessed at death any of the incidents of ownership, exercisable either alone or in conjunction with any person. ● The right of the insured or estate to its economic benefits; ● The power to change the beneficiary; Incidents of ownership in a policy include: ● The power to surrender or cancel the policy; ● The power to assign the policy or to revoke an assignment; ● The power to pledge the policy for a loan; ● The power to obtain from the insurer a loan against the surrender value of the policy; and ● A reversionary interest if the value of the reversionary interest was more than 5% of the value of the policy immediately before the decedent died. (An interest in an insurance policy is considered a reversionary interest if, for example, the proceeds become payable to the insured’s estate or payable as the insured directs if the beneficiary dies before the insured.) Life insurance not includible in the gross estate under section 2042 may be includible under some other section of the Code. For example, a life insurance policy could be transferred by the decedent in such a way that it would be includible in the gross estate under section 2036, 2037, or 2038. See the instructions to Schedule G for a description of these sections. Completing the Schedule You must list every policy of insurance on the life of the decedent, whether or not it is included in the gross estate. Under “Description,” list: ● The name of the insurance company, and ● The number of the policy. For every policy of life insurance listed on the schedule, you must request a statement on Form 712, Life Insurance Statement, from the company that issued the policy. Attach the Form 712 to the back of Schedule D. If part or all of the policy proceeds are not included in the gross estate, you must explain why they were not included. If the policy proceeds are paid in one sum, enter the net proceeds received (from Form 712, line 24) in the value (and alternate value) columns of Schedule D. If the policy proceeds are not paid in one sum, enter the value of the proceeds as of the date of the decedent’s death (from Form 712, line 25). Instructions for Schedule D—Insurance on the Decedent’s Life Form 706 (Rev. 8-2008) Estate of: SCHEDULE E—Jointly Owned Property (If you elect section 2032A valuation, you must complete Schedule E and Schedule A-1.) PART 1. Qualified Joint Interests—Interests Held by the Decedent and His or Her Spouse as the Only Joint Tenants (Section 2040(b)(2)) Description. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN Alternate valuation date Item number Value at date of death Alternate value Total from continuation schedules (or additional sheets) attached to this schedule 1a Totals 1b Amounts included in gross estate (one-half of line 1a) PART 2. All Other Joint Interests 2a State the name and address of each surviving co-tenant. If there are more than three surviving co-tenants, list the additional co-tenants on an attached sheet. Address (number and street, city, state, and ZIP code) Name A. B. C. Enter letter for co-tenant Description (including alternate valuation date if any). For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN Includible value at date of death Includible alternate value Percentage includible Item number Total from continuation schedules (or additional sheets) attached to this schedule 2b Total other joint interests 3 (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (See the instructions on the reverse side.) Schedule E—Page 17 1a 1b 2b Total includible joint interests (add lines 1b and 2b). Also enter on Part 5—Recapitulation, page 3, at item 5 3 1 1 CUSIP number or EIN, where applicable CUSIP number or EIN, where applicable Decedent’s Social Security Number Form 706 (Rev. 8-2008) Schedule E—Page 18 For each item of property, enter the appropriate letter A, B, C, etc., from line 2a to indicate the name and address of the surviving co-tenant. Under “Description,” describe the property as required in the instructions for Schedules A, B, C, and F for the type of property involved. In the “Percentage includible” column, enter the percentage of the total value of the property that you intend to include in the gross estate. Generally, you must include the full value of the jointly owned property in the gross estate. However, the full value should not be included if you can show that a part of the property originally belonged to the other tenant or tenants and was never received or acquired by the other tenant or tenants from the decedent for less than adequate and full consideration in money or money’s worth, or unless you can show that any part of the property was acquired with consideration originally belonging to the surviving joint tenant or tenants. In this case, you may exclude from the value of the property an amount proportionate to the consideration furnished by the other tenant or tenants. Relinquishing or promising to relinquish dower, curtesy, or statutory estate created instead of dower or curtesy, or other marital rights in the decedent’s property or estate is not consideration in money or money’s worth. See the Schedule A instructions for the value to show for real property that is subject to a mortgage. If the property was acquired by the decedent and another person or persons by gift, bequest, devise, or inheritance as joint tenants, and their interests are not otherwise specified by law, include only that part of the value of the property that is figured by dividing the full value of the property by the number of joint tenants. If you believe that less than the full value of the entire property is includible in the gross estate for tax purposes, you must establish the right to include the smaller value by attaching proof of the extent, origin, and nature of the decedent’s interest and the interest(s) of the decedent’s co-tenant or co-tenants. In the “Includible alternate value” and “Includible value at date of death” columns, you should enter only the values that you believe are includible in the gross estate. Part 2. All other joint interests. All joint interests that were not entered in Part 1 must be entered in Part 2. Instructions for Schedule E—Jointly Owned Property If you are required to file Form 706, you must complete Schedule E and file it with the return if the decedent owned any joint property at the time of death, whether or not the decedent’s interest is includible in the gross estate. Enter on this schedule all property of whatever kind or character, whether real estate, personal property, or bank accounts, in which the decedent held at the time of death an interest either as a joint tenant with right to survivorship or as a tenant by the entirety. Do not list on this schedule property that the decedent held as a tenant in common, but report the value of the interest on Schedule A if real estate, or on the appropriate schedule if personal property. Similarly, community property held by the decedent and spouse should be reported on the appropriate Schedules A through I. The decedent’s interest in a partnership should not be entered on this schedule unless the partnership interest itself is jointly owned. Solely owned partnership interests should be reported on Schedule F, “Other Miscellaneous Property Not Reportable Under Any Other Schedule.” Part 1. Qualified joint interests held by decedent and spouse. Under section 2040(b)(2), a joint interest is a qualified joint interest if the decedent and the surviving spouse held the interest as: ● Tenants by the entirety, or ● Joint tenants with right of survivorship if the decedent and the decedent’s spouse are the only joint tenants. Interests that meet either of the two requirements above should be entered in Part 1. Joint interests that do not meet either of the two requirements above should be entered in Part 2. Under “Description,” describe the property as required in the instructions for Schedules A, B, C, and F for the type of property involved. For example, jointly held stocks and bonds should be described using the rules given in the instructions to Schedule B. Under “Alternate value” and “Value at date of death,” enter the full value of the property. Note. You cannot claim the special treatment under section 2040(b) for property held jointly by a decedent and a surviving spouse who is not a U.S. citizen. You must report these joint interests on Part 2 of Schedule E, not Part 1. Form 706 (Rev. 8-2008) Estate of: SCHEDULE F—Other Miscellaneous Property Not Reportable Under Any Other Schedule (For jointly owned property that must be disclosed on Schedule E, see the instructions for Schedule E.) (If you elect section 2032A valuation, you must complete Schedule F and Schedule A-1.) No Yes 1 Did the decedent at the time of death own any works of art or items with collectible value in excess of $3,000 or any collections whose artistic or collectible value combined at date of death exceeded $10,000? If “Yes,” submit full details on this schedule and attach appraisals. 2 Has the decedent’s estate, spouse, or any other person, received (or will receive) any bonus or award as a result of the decedent’s employment or death? Did the decedent at the time of death have, or have access to, a safe deposit box? 3 If ‘‘Yes,’’ state location, and if held in joint names of decedent and another, state name and relationship of joint depositor. If any of the contents of the safe deposit box are omitted from the schedules in this return, explain fully why omitted. Description. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN Alternate valuation date Item number Value at date of death Alternate value 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 6.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (See the instructions on the reverse side.) Schedule F—Page 19 If “Yes,” submit full details on this schedule. CUSIP number or EIN, where applicable Decedent’s Social Security Number Form 706 (Rev. 8-2008) ● Household goods and personal effects, including wearing apparel; Instructions for Schedule F—Other Miscellaneous Property ● Farm products and growing crops; You must complete Schedule F and file it with the return. ● Livestock; On Schedule F, list all items that must be included in the gross estate that are not reported on any other schedule, including: ● Farm machinery; and ● Automobiles. Interests. If the decedent owned any interest in a partnership or unincorporated business, attach a statement of assets and liabilities for the valuation date and for the 5 years before the valuation date. Also, attach statements of the net earnings for the same 5 years. Be sure to include the EIN of the entity. You must account for goodwill in the valuation. In general, furnish the same information and follow the methods used to value close corporations. See the instructions for Schedule B. ● Debts due the decedent (other than notes and mortgages included on Schedule C); ● Interests in business; ● Insurance on the life of another (obtain and attach Form 712, Life Insurance Statement, for each policy). Note (for single premium or paid-up policies). In certain situations, for example where the surrender value of the policy exceeds its replacement cost, the true economic value of the policy will be greater than the amount shown on line 59 of Form 712. In these situations, you should report the full economic value of the policy on Schedule F. See Rev. Rul. 78-137, 1978-1 C.B. 280 for details. All partnership interests should be reported on Schedule F unless the partnership interest, itself, is jointly owned. Jointly owned partnership interests should be reported on Schedule E. If real estate is owned by the sole proprietorship, it should be reported on Schedule F and not on Schedule A. Describe the real estate with the same detail required for Schedule A. ● Section 2044 property (see Decedent Who Was a Surviving Spouse below); ● Claims (including the value of the decedent’s interest in a claim for refund of income taxes or the amount of the refund actually received); Line 1. If the decedent owned at the date of death works of art or items with collectible value (for example, jewelry, furs, silverware, books, statuary, vases, oriental rugs, coin or stamp collections), check the “Yes” box on line 1 and provide full details. If any one work of art or item with collectible value is valued at more than $3,000, or any collection of similar articles is valued at more than $10,000, attach an appraisal by an expert under oath and the required statement regarding the appraiser’s qualifications (see Regulations section 20.2031-6(b)). ● Rights; ● Royalties; ● Leaseholds; ● Judgments; ● Reversionary or remainder interests; Schedule F—Page 20 ● Shares in trust funds (attach a copy of the trust instrument); Decedent Who Was a Surviving Spouse If the decedent was a surviving spouse, he or she may have received qualified terminable interest property (QTIP) from the predeceased spouse for which the marital deduction was elected either on the predeceased spouse’s estate tax return or on a gift tax return, Form 709. The election was available for gifts made and decedents dying after December 31, 1981. List such property on Schedule F. If this election was made and the surviving spouse retained his or her interest in the QTIP property at death, the full value of the QTIP property is includible in his or her estate, even though the qualifying income interest terminated at death. It is valued as of the date of the surviving spouse’s death, or alternate valuation date, if applicable. Do not reduce the value by any annual exclusion that may have applied to the transfer creating the interest. The value of such property included in the surviving spouse’s gross estate is treated as passing from the surviving spouse. It therefore qualifies for the charitable and marital deductions on the surviving spouse’s estate tax return if it meets the other requirements for those deductions. For additional details, see Regulations section 20.2044-1. ● Any interest in an Archer medical savings account (MSA) or health savings account (HSA), unless such interest passes to the surviving spouse; and schedule owned by the decedent at the time of death, attach a statement which lists the item number from Schedule F and identifies the total accumulated discount taken (that is, XX.XX%) on such interest. If you answered “Yes” to line 10b for an interest in a limited liability company owned by the decedent at the time of death, attach a statement which lists the item number from Schedule F and identifies the effective discount taken on such interest. If you answered “Yes” to line 10b for any transfer(s) described in (1) through (5) on pages 15 and 16 of the separate Form 706 instructions (and made by the decedent), attach a statement to Schedule G which lists the item number from that schedule and identifies the total accumulated discount taken (that is, XX.XX%) on such transfer(s). Example of effective discount: a Pro-rata value of limited liability company (before any discounts) b Minus: 10% discounts for lack of control c Marketable minority interest value (as if freely traded minority interest value) d Minus: 15% discount for lack of marketability e Non-marketable minority interest value $76.50 $100.00 (10.00) $90.00 (13.50) Valuation discounts. If you answered “Yes” to Part 4—General Information, line 10b for any interest in miscellaneous property not reportable under any other Calculation of effective discount: (a minus e ) divided by a = effective discount ($100.00 - $76.50)  $100.00 = 23.50% Note. The amount of discounts are based on the factors pertaining to a specific interest and those discounts shown in the example are for demonstration purposes only. Form 706 (Rev. 8-2008) Estate of: SCHEDULE G—Transfers During Decedent’s Life (If you elect section 2032A valuation, you must complete Schedule G and Schedule A-1.) Description. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN Alternate valuation date Item number Value at date of death Alternate value Gift tax paid or payable by the decedent or the estate for all gifts made by the decedent or his or her spouse within 3 years before the decedent’s death (section 2035(b)) A. X X X X X Transfers includible under section 2035(a), 2036, 2037, or 2038: B. 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 7.) SCHEDULE H—Powers of Appointment (If you elect section 2032A valuation, you must complete Schedule H and Schedule A-1.) 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 8.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (The instructions to Schedules G and H are in the separate instructions.) Schedules G and H—Page 21 Description Alternate valuation date Item number Value at date of death Alternate value (Include “5 and 5 lapsing” powers (section 2041(b)(2)) held by the decedent.) Decedent’s Social Security Number Form 706 (Rev. 8-2008) Estate of: SCHEDULE I—Annuities Note. Generally, no exclusion is allowed for the estates of decedents dying after December 31, 1984 (see page 17 of the instructions). No Yes Are you excluding from the decedent’s gross estate the value of a lump-sum distribution described in section 2039(f)(2) (as in effect before its repeal by the Deficit Reduction Act of 1984)? A If “Yes,” you must attach the information required by the instructions. Includible value at date of death Includible alternate value Alternate valuation date Description. Show the entire value of the annuity before any exclusions Item number 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 9.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (The instructions to Schedule I are in the separate instructions.) Schedule I—Page 22 Decedent’s Social Security Number Form 706 (Rev. 8-2008) Estate of: SCHEDULE J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims Note. Do not list on this schedule expenses of administering property not subject to claims. For those expenses, see the instructions for Schedule L. If executors’ commissions, attorney fees, etc., are claimed and allowed as a deduction for estate tax purposes, they are not allowable as a deduction in computing the taxable income of the estate for federal income tax purposes. They are allowable as an income tax deduction on Form 1041 if a waiver is filed to waive the deduction on Form 706 (see the Form 1041 instructions). Item number Total amount Description Expense amount Funeral expenses: A. 1 Total funeral expenses  Administration expenses: B. Executors’ commissions—amount estimated/agreed upon/paid. (Strike out the words that do not apply.) 1 Attorney fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.) 2 Accountant fees—amount estimated/agreed upon/paid. (Strike out the words that do not apply.) 3 Expense amount Miscellaneous expenses: 4 Total miscellaneous expenses from continuation schedules (or additional sheets) attached to this schedule Total miscellaneous expenses  TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 13.)  (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) Schedule J—Page 23 (See the instructions on the reverse side.) Decedent’s Social Security Number Form 706 (Rev. 8-2008) On Schedule J, itemize funeral expenses and expenses incurred in administering property subject to claims. List the names and addresses of persons to whom the expenses are payable and describe the nature of the expense. Do not list expenses incurred in administering property not subject to claims on this schedule. List them on Schedule L instead. Do not deduct on this schedule amounts paid as trustees’ commissions whether received by you acting in the capacity of a trustee or by a separate trustee. If such amounts were paid in administering property not subject to claims, deduct them on Schedule L. Note. Executors’ commissions are taxable income to the executors. Therefore, be sure to include them as income on your individual income tax return. Funeral expenses. Itemize funeral expenses on line A. Deduct from the expenses any amounts that were reimbursed, such as death benefits payable by the Social Security Administration and the Veterans Administration. Attorney fees. Enter the amount of attorney fees that have actually been paid or that you reasonably expect to be paid. If on the final examination of the return, the fees claimed have not been awarded by the proper court and paid, the deduction will be allowed provided the Estate and Gift Tax Territory Manager is reasonably satisfied that the amount claimed will be paid and that it does not exceed a reasonable payment for the services performed, taking into account the size and character of the estate and the local law and practice. If the fees claimed have not been paid at the time of final examination of the return, the amount deducted must be supported by an affidavit, or statement signed under the penalties of perjury, by the executor or the attorney stating that the amount has been agreed upon and will be paid. Executors’ commissions. When you file the return, you may deduct commissions that have actually been paid to you or that you expect will be paid. You may not deduct commissions if none will be collected. If the amount of the commissions has not been fixed by decree of the proper court, the deduction will be allowed on the final examination of the return, provided that: ● The Estate and Gift Tax Territory Manager is reasonably satisfied that the commissions claimed will be paid; ● The amount entered as a deduction is within the amount allowable by the laws of the jurisdiction where the estate is being administered; and Do not deduct attorney fees incidental to litigation incurred by the beneficiaries. These expenses are charged against the beneficiaries personally and are not administration expenses authorized by the Code. ● It is in accordance with the usually accepted practice in that jurisdiction for estates of similar size and character. If you have not been paid the commissions claimed at the time of the final examination of the return, you must Schedule J—Page 24 Miscellaneous expenses. Miscellaneous administration expenses necessarily incurred in preserving and distributing the estate are deductible. These expenses include appraiser’s and accountant’s fees, certain court costs, and costs of storing or maintaining assets of the estate. The expenses of selling assets are deductible only if the sale is necessary to pay the decedent’s debts, the expenses of administration, or taxes, or to preserve the estate or carry out distribution. The deduction is limited to the amount paid for these expenses that is allowable under local law but may not exceed: 1. The value of property subject to claims included in the gross estate, plus 2. The amount paid out of property included in the gross estate but not subject to claims. This amount must actually be paid by the due date of the estate tax return. The applicable local law under which the estate is being administered determines which property is and is not subject to claims. If under local law a particular property interest included in the gross estate would bear the burden for the payment of the expenses, then the property is considered property subject to claims. Unlike certain claims against the estate for debts of the decedent (see the instructions for Schedule K in the separate instructions), you cannot deduct expenses incurred in administering property subject to claims on both the estate tax return and the estate’s income tax return. If you choose to deduct them on the estate tax return, you cannot deduct them on a Form 1041 filed for the estate. Funeral expenses are only deductible on the estate tax return. Interest expense. Interest expenses incurred after the decedent’s death are generally allowed as a deduction if they are reasonable, necessary to the administration of the estate, and allowable under local law. Interest incurred as the result of a federal estate tax deficiency is a deductible administrative expense. Penalties are not deductible even if they are allowable under local law. You may not deduct a bequest or devise made to you instead of commissions. If, however, the decedent fixed by will the compensation payable to you for services to be rendered in the administration of the estate, you may deduct this amount to the extent it is not more than the compensation allowable by the local law or practice. General. You must complete and file Schedule J if you claim a deduction on item 13 of Part 5—Recapitulation. Note. If you elect to pay the tax in installments under section 6166, you may not deduct the interest payable on the installments. support the amount you deducted with an affidavit or statement signed under the penalties of perjury that the amount has been agreed upon and will be paid. Instructions for Schedule J—Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims Form 706 (Rev. 8-2008) Estate of: SCHEDULE K—Debts of the Decedent, and Mortgages and Liens Amount claimed as a deduction Item number Amount in contest Amount unpaid to date Debts of the Decedent—Creditor and nature of claim, and allowable death taxes 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 14.) Mortgages and Liens—Description Amount 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 15.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) Schedule K—Page 25 (The instructions to Schedule K are in the separate instructions.) Item number Decedent’s Social Security Number Form 706 (Rev. 8-2008) Estate of: SCHEDULE L—Net Losses During Administration and Expenses Incurred in Administering Property Not Subject to Claims Net losses during administration Item number Amount (Note. Do not deduct losses claimed on a federal income tax return.) 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 18.) Expenses incurred in administering property not subject to claims. (Indicate whether estimated, agreed upon, or paid.) Item number Amount 1 Total from continuation schedules (or additional sheets) attached to this schedule TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 19.) (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) Schedule L—Page 26 (The instructions to Schedule L are in the separate instructions.) Decedent’s Social Security Number Form 706 (Rev. 8-2008) Estate of: SCHEDULE M—Bequests, etc., to Surviving Spouse Yes No Did any property pass to the surviving spouse as a result of a qualified disclaimer? 1 If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b). Is the surviving spouse a U.S. citizen? Election Out of QTIP Treatment of Annuities. Do you elect under section 2056(b)(7)(C)(ii) not to treat as qualified terminable interest property any joint and survivor annuities that are included in the gross estate and would otherwise be treated as qualified terminable interest property under section 2056(b)(7)(C)? (see instructions) Item number Description of property interests passing to surviving spouse. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN Amount A1 Total from continuation schedules (or additional sheets) attached to this schedule Total amount of property interests listed on Schedule M (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (See the instructions on the reverse side.) Schedule M—Page 27 Election To Deduct Qualified Terminable Interest Property Under Section 2056(b)(7). If a trust (or other property) meets the requirements of qualified terminable interest property under section 2056(b)(7), and a. The trust or other property is listed on Schedule M and then unless the executor specifically identifies the trust (all or a fractional portion or percentage) or other property to be excluded from the election, the executor shall be deemed to have made an election to have such trust (or other property) treated as qualified terminable interest property under section 2056(b)(7). In what country was the surviving spouse born? b. The value of the trust (or other property) is entered in whole or in part as a deduction on Schedule M, What is the surviving spouse’s date of birth? If the surviving spouse is a naturalized citizen, when did the surviving spouse acquire citizenship? If the surviving spouse is not a U.S. citizen, of what country is the surviving spouse a citizen? 2a 3 b c d e If less than the entire value of the trust (or other property) that the executor has included in the gross estate is entered as a deduction on Schedule M, the executor shall be considered to have made an election only as to a fraction of the trust (or other property). The numerator of this fraction is equal to the amount of the trust (or other property) deducted on Schedule M. The denominator is equal to the total value of the trust (or other property). 4 5a 6 b c d Federal estate taxes payable out of property interests listed on Schedule M Other death taxes payable out of property interests listed on Schedule M Add items 5a, 5b, and 5c Net amount of property interests listed on Schedule M (subtract 5d from 4). Also enter on Part 5—Recapitulation, page 3, at item 20 Federal and state GST taxes payable out of property interests listed on Schedule M 4 6 5d 5c 5b 5a Election To Deduct Qualified Domestic Trust Property Under Section 2056A. If a trust meets the requirements of a qualified domestic trust under section 2056A(a) and this return is filed no later than 1 year after the time prescribed by law (including extensions) for filing the return, and a. The entire value of a trust or trust property is listed on Schedule M and b. The entire value of the trust or trust property is entered as a deduction on Schedule M, then unless the executor specifically identifies the trust to be excluded from the election, the executor shall be deemed to have made an election to have the entire trust treated as qualified domestic trust property. 1 2c 3 QTIP property: B1 All other property: Decedent’s Social Security Number Form 706 (Rev. 8-2008) Schedule M—Page 28 Examples of Listing of Property Interests on Schedule M Item number Description of property interests passing to surviving spouse. For securities, give CUSIP number. If trust, partnership, or closely held entity, give EIN Amount 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) B1 $182,500 Proceeds of Metropolitan Life Insurance Company policy No. 104729, payable in one sum to surviving spouse (Schedule D, item 3) B2 200,000 100,000 Cash bequest under Paragraph Six of will B3 Instructions for Schedule M—Bequests, etc., to Surviving Spouse (Marital Deduction) General The marital deduction is authorized by section 2056 for certain property interests that pass from the decedent to the surviving spouse. You may claim the deduction only for property interests that are included in the decedent’s gross estate (Schedules A through I ). Note. The marital deduction is generally not allowed if the surviving spouse is not a U.S. citizen. The marital deduction is allowed for property passing to such a surviving spouse in a qualified domestic trust (QDOT) or if such property is transferred or irrevocably assigned to such a trust before the estate tax return is filed. The executor must elect qualified domestic trust status on this return. See the instructions that follow, on pages 29 and 30, for details on the election. Property Interests That You May List on Schedule M For the rules on common disaster and survival for a limited period, see section 2056(b)(3). You may list on Schedule M only those interests that the surviving spouse takes: 1. As the decedent’s legatee, devisee, heir, or donee; 2. As the decedent’s surviving tenant by the entirety or joint tenant; 3. As an appointee under the decedent’s exercise of a power or as a taker in default at the decedent’s nonexercise of a power; 4. As a beneficiary of insurance on the decedent’s life; 5. As the surviving spouse taking under dower or curtesy (or similar statutory interest); and 6. As a transferee of a transfer made by the decedent at any time. Property Interests That You May Not List on Schedule M 1. The value of any property that does not pass from the decedent to the surviving spouse; 2. Property interests that are not included in the decedent’s gross estate; 3. The full value of a property interest for which a deduction was claimed on Schedules J through L. The value of the property interest should be reduced by the deductions claimed with respect to it; 4. The full value of a property interest that passes to the surviving spouse subject to a mortgage or other encumbrance or an obligation of the surviving spouse. Include on Schedule M only the net value of the interest after reducing it by the amount of the mortgage or other debt; 5. Nondeductible terminable interests (described below); or 6. Any property interest disclaimed by the surviving spouse. Terminable Interests The ownership of a bond, note, or other contractual obligation, which when discharged would not have the effect of an annuity for life or for a term, is not considered a terminable interest. Nondeductible terminable interests. A terminable interest is nondeductible. Unless you are making a QTIP election, a terminable interest should not be entered on Schedule M if: 1. Another interest in the same property passed from the decedent to some other person for less than adequate and full consideration in money or money’s worth; and 2. By reason of its passing, the other person or that person’s heirs may enjoy part of the property after the termination of the surviving spouse’s interest. This rule applies even though the interest that passes from the decedent to a person other than the surviving spouse is not included in the gross estate, and regardless of when the interest passes. The rule also applies regardless of whether the surviving spouse’s interest and the other person’s interest pass from the decedent at the same time. For example, a decedent devised real property to his wife for life, with remainder to his children. The life interest that passed to the wife does not qualify for the marital deduction because it will terminate at her death and the children will thereafter possess or enjoy the property. However, if the decedent purchased a joint and survivor annuity for himself and his wife who survived him, the value of the survivor’s annuity, to the extent that it is included in the gross estate, qualifies for the marital deduction because You must complete Schedule M and file it with the return if you claim a deduction on Part 5—Recapitulation, item 20. Generally, you may list on Schedule M all property interests that pass from the decedent to the surviving spouse and are included in the gross estate. However, you should not list any nondeductible terminable interests (described below) on Schedule M unless you are making a QTIP election. The property for which you make this election must be included on Schedule M. See Qualified terminable interest property on the following page. You should not list on Schedule M: Certain interests in property passing from a decedent to a surviving spouse are referred to as “terminable interests.” These are interests that will terminate or fail after the passage of time, or on the occurrence or nonoccurrence of some contingency. Examples are: life estates, annuities, estates for terms of years, and patents. Property interests that are considered to pass to a person other than the surviving spouse are any property interest that: (a) passes under a decedent’s will or intestacy; (b) was transferred by a decedent during life; or (c) is held by or passed on to any person as a decedent’s joint tenant, as appointee under a decedent’s exercise of a power, as taker in default at a decedent’s release or nonexercise of a power, or as a beneficiary of insurance on the decedent’s life. All other property: Form 706 (Rev. 8-2008) Schedule M—Page 29 If any property interest passing from the decedent to the surviving spouse may be paid or otherwise satisfied out of any of a group of assets, the value of the property interest is, for the entry on Schedule M, reduced by the value of any asset or assets that, if passing from the decedent to the surviving spouse, would be nondeductible terminable interests. Examples of property interests that may be paid or otherwise satisfied out of any of a group of assets are a bequest of the residue of the decedent’s estate, or of a share of the residue, and a cash legacy payable out of the general estate. Example. A decedent bequeathed $100,000 to the surviving spouse. The general estate includes a term for years (valued at $10,000 in determining the value of the gross estate) in an office building, which interest was retained by the decedent under a deed of the building by gift to a son. Accordingly, the value of the specific bequest entered on Schedule M is $90,000. Life estate with power of appointment in the surviving spouse. A property interest, whether or not in trust, will be treated as passing to the surviving spouse, and will not be treated as a nondeductible terminable interest if: (a) the surviving spouse is entitled for life to all of the income from the entire interest; (b) the income is payable annually or at more frequent intervals; (c) the surviving spouse has the power, exercisable in favor of the surviving spouse or the estate of the surviving spouse, to appoint the entire interest; (d) the power is exercisable by the surviving spouse alone and (whether exercisable by will or during life) is exercisable by the surviving spouse in all events; and (e) no part of the entire interest is subject to a power in any other person to appoint any part to any person other than the surviving spouse (or the surviving spouse’s legal representative or relative if the surviving spouse is disabled. See Rev. Rul. 85-35, 1985-1 C.B. 328). If these five conditions are satisfied only for a specific portion of the entire interest, see the section 2056(b) regulations to determine the amount of the marital deduction. Life insurance, endowment, or annuity payments, with power of appointment in surviving spouse. A property interest consisting of the entire proceeds under a life insurance, endowment, or annuity contract is treated as passing from the decedent to the surviving spouse, and will not be treated as a nondeductible terminable interest if: (a) the surviving spouse is entitled to receive the proceeds in installments, or is entitled to interest on them, with all amounts payable during the life of the spouse, payable only to the surviving spouse; (b) the installment or interest payments are payable annually, or more frequently, beginning not later than 13 months after the decedent’s death; (c) the surviving spouse has the power, exercisable in favor of the surviving spouse or of the estate of the surviving spouse, to appoint all amounts payable under the contract; (d) the power is exercisable by the surviving spouse alone and (whether exercisable by will or during life) is exercisable by the surviving spouse in all events; and (e) no part of the amount payable under the contract is subject to a power in Charitable remainder trusts. An interest in a charitable remainder trust will not be treated as a nondeductible terminable interest if: 1. The interest in the trust passes from the decedent to the surviving spouse, and 2. The surviving spouse is the only beneficiary of the trust other than charitable organizations described in section 170(c). A charitable remainder trust is either a charitable remainder annuity trust or a charitable remainder unitrust. (See section 664 for descriptions of these trusts.) Election To Deduct Qualified Terminable Interests (QTIP) If you file a Form 706 in which you do not make this election, you may not file an amended return to make the election unless you file the amended return on or before the due date for filing the original Form 706. The effect of the election is that the property (interest) will be treated as passing to the surviving spouse and will not be treated as a nondeductible terminable interest. All of the other marital deduction requirements must still be satisfied before you may make this election. For example, you may not make this election for property or property interests that are not included in the decedent’s gross estate. Qualified terminable interest property. Qualified terminable interest property is property (a) that passes from the decedent, and (b) in which the surviving spouse has a qualifying income interest for life. The surviving spouse has a qualifying income interest for life if the surviving spouse is entitled to all of the income from the property payable annually or at more frequent intervals, or has a usufruct interest for life in the property, and during the surviving spouse’s lifetime no person has a power to appoint any part of the property to any person other than the surviving spouse. An annuity is treated as an income interest regardless of whether the property from which the annuity is payable can be separately identified. You may elect to claim a marital deduction for qualified terminable interest property or property interests. You make the QTIP election simply by listing the qualified terminable interest property on Schedule M and deducting its value. You are presumed to have made the QTIP election if you list the property and deduct its value on Schedule M. If you make this election, the surviving spouse’s gross estate will include the value of the qualified terminable interest property. See the instructions for Part 4—General Information, line 6, for more details. The election is irrevocable. Amendments to Regulations sections 20.2044-1, 20.2056(b)-7, and 20.2056(b)-10 clarify that an interest in property is eligible for QTIP treatment if the income interest is contingent upon the executor’s election even if that portion of the property for which no election is made will pass to or for the benefit of beneficiaries other than the surviving spouse. The marital deduction is not allowed for an interest that the decedent directed the executor or a trustee to convert, after death, into a terminable interest for the surviving spouse. The marital deduction is not allowed for such an interest even if there was no interest in the property passing to another person and even if the terminable interest would otherwise have been deductible under the exceptions described below for life estate and life insurance and annuity payments with powers of appointment. For more information, see Regulations sections 20.2056(b)-1(f) and 20.2056(b)-1(g), Example (7). even though the interest will terminate on the wife’s death, no one else will possess or enjoy any part of the property. any other person to appoint any part to any person other than the surviving spouse. If these five conditions are satisfied only for a specific portion of the proceeds, see the section 2056(b) regulations to determine the amount of the marital deduction. The QTIP election may be made for all or any part of qualified terminable interest property. A partial election must relate to a fractional or percentile share of the property so that the elective part will reflect its proportionate share of the increase or decline in the whole of the property when applying section 2044 or 2519. Thus, if the interest of the surviving spouse in a trust (or other property in which the spouse has a qualified life estate) is qualified terminable Form 706 (Rev. 8-2008) Schedule M—Page 30 The determination of whether a trust qualifies as a QDOT will be made as of the date the decedent’s Form 706 is filed. If, however, judicial proceedings are brought before the Form 706’s due date (including extensions) to have the trust revised to meet the QDOT requirements, then the determination will not be made until the court-ordered changes to the trust are made. Line 3 The executor can elect out of QTIP treatment, however, by checking the “Yes” box on line 3. Once made, the election is irrevocable. If there is more than one such joint and survivor annuity, you are not required to make the election for all of them. If you make the election out of QTIP treatment by checking “Yes” on line 3, you cannot deduct the amount of the annuity on Schedule M. If you do not make the election out, you must list the joint and survivor annuities on Schedule M. Listing Property Interests on Schedule M Enter the value of each interest before taking into account the federal estate tax or any other death tax. The valuation dates used in determining the value of the gross estate apply also on Schedule M. If Schedule M includes a bequest of the residue or a part of the residue of the decedent’s estate, attach a copy of the computation showing how the value of the residue was determined. Include a statement showing: ● The value of all property that is included in the decedent’s gross estate (Schedules A through I) but is not a part of the decedent’s probate estate, such as lifetime transfers, jointly owned property that passed to the survivor on decedent’s death, and the insurance payable to specific beneficiaries; ● The values of all specific and general legacies or devises, with reference to the applicable clause or paragraph of the decedent’s will or codicil. (If legacies are made to each member of a class; for example, $1,000 to each of decedent’s employees, only the number in each class and the total value of property received by them need be furnished); ● The date of birth of all persons, the length of whose lives may affect the value of the residuary interest passing to the surviving spouse; and ● Any other important information such as that relating to any claim to any part of the estate not arising under the will. Lines 5a, 5b, and 5c. The total of the values listed on Schedule M must be reduced by the amount of the federal estate tax, the federal GST tax, and the amount of state or other death and GST taxes paid out of the property interest involved. If you enter an amount for state or other death or GST taxes on line 5b or 5c, identify the taxes and attach your computation of them. Attachments. If you list property interests passing by the decedent’s will on Schedule M, attach a certified copy of the order admitting the will to probate. If, when you file the return, the court of probate jurisdiction has entered any decree interpreting the will or any of its provisions affecting any of the interests listed on Schedule M, or has entered any order of distribution, attach a copy of the decree or order. In addition, the IRS may request other evidence to support the marital deduction claimed. 2. That requires that no distribution of corpus from the trust can be made unless such a trustee has the right to withhold from the distribution the tax imposed on the QDOT; 3. That meets the requirements of any applicable regulations; and 4. For which the executor has made an election on the estate tax return of the decedent. You make the QDOT election simply by listing the qualified domestic trust or the entire value of the trust property on Schedule M and deducting its value. You are presumed to have made the QDOT election if you list the trust or trust property and deduct its value on Schedule M. Once made, the election is irrevocable. If an election is made to deduct qualified domestic trust property under section 2056A(d), provide the following information for each qualified domestic trust on an attachment to this schedule: Section 2056(b)(7) creates an automatic QTIP election for certain joint and survivor annuities that are includible in the estate under section 2039. To qualify, only the surviving spouse can have the right to receive payments before the death of the surviving spouse. List each property interest included in the gross estate that passes from the decedent to the surviving spouse and for which a marital deduction is claimed. This includes otherwise nondeductible terminable interest property for which you are making a QTIP election. Number each item in sequence and describe each item in detail. Describe the instrument (including any clause or paragraph number) or provision of law under which each item passed to the surviving spouse. If possible, show where each item appears (number and schedule) on Schedules A through I. In listing otherwise nondeductible property for which you are making a QTIP election, unless you specifically identify a fractional portion of the trust or other property as not subject to the election, the election will be considered made for all of the trust or other property. 1. The name and address of every trustee; 2. A description of each transfer passing from the decedent that is the source of the property to be placed in trust; and 3. The employer identification number (EIN) for the trust. The election must be made for an entire QDOT trust. In listing a trust for which you are making a QDOT election, unless you specifically identify the trust as not subject to the election, the election will be considered made for the entire trust. Line 1 If property passes to the surviving spouse as the result of a qualified disclaimer, check “Yes” and attach a copy of the written disclaimer required by section 2518(b). Note. For trusts created by an instrument executed before November 5, 1990, paragraphs 1 and 2 above will be treated as met if the trust instrument requires that all trustees be individuals who are citizens of the United States or domestic corporations. A QDOT is any trust: 1. That requires at least one trustee to be either an individual who is a citizen of the United States or a domestic corporation; interest property, you may make an election for a part of the trust (or other property) only if the election relates to a defined fraction or percentage of the entire trust (or other property). The fraction or percentage may be defined by means of a formula. Qualified Domestic Trust Election (QDOT) The marital deduction is allowed for transfers to a surviving spouse who is not a U.S. citizen only if the property passes to the surviving spouse in a qualified domestic trust (QDOT) or if such property is transferred or irrevocably assigned to a QDOT before the decedent’s estate tax return is filed. Form 706 (Rev. 8-2008) Estate of: SCHEDULE O—Charitable, Public, and Similar Gifts and Bequests No Yes If the transfer was made by will, has any action been instituted to have interpreted or to contest the will or any of its provisions affecting the charitable deductions claimed in this schedule? 1a If ‘‘Yes,’’ full details must be submitted with this schedule. b According to the information and belief of the person or persons filing this return, is any such action planned? If ‘‘Yes,’’ full details must be submitted with this schedule. 2 Did any property pass to charity as the result of a qualified disclaimer? If ‘‘Yes,’’ attach a copy of the written disclaimer required by section 2518(b). Item number Name and address of beneficiary Character of institution Amount 1 Total from continuation schedules (or additional sheets) attached to this schedule 3 Total 3 Federal estate tax payable out of property interests listed above 4a 4a 4b Other death taxes payable out of property interests listed above b 4c Federal and state GST taxes payable out of property interests listed above c 4d d Add items 4a, 4b, and 4c 5 Net value of property interests listed above (subtract 4d from 3). Also enter on Part 5—Recapitulation, page 3, at item 21 5 (If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.) (The instructions to Schedule O are in the separate instructions.) Schedule O—Page 31 Decedent’s Social Security Number Form 706 (Rev. 8-2008) Estate of: SCHEDULE P—Credit for Foreign Death Taxes List all foreign countries to which death taxes have been paid and for which a credit is claimed on this return. If a credit is claimed for death taxes paid to more than one foreign country, compute the credit for taxes paid to one country on this sheet and attach a separate copy of Schedule P for each of the other countries. The credit computed on this sheet is for the (Name of death tax or taxes) imposed in (Name of country) Credit is computed under the (Insert title of treaty or “statute”) Citizenship (nationality) of decedent at time of death (All amounts and values must be entered in United States money.) Total of estate, inheritance, legacy, and succession taxes imposed in the country named above attributable to property situated in that country, subjected to these taxes, and included in the gross estate (as defined by statute) 1 Value of the gross estate (adjusted, if necessary, according to the instructions for item 2) 2 Value of property situated in that country, subjected to death taxes imposed in that country, and included in the gross estate (adjusted, if necessary, according to the instructions for item 3) 3 Tax imposed by section 2001 reduced by the total credits claimed under sections 2010 and 2012 (see instructions) 4 Amount of federal estate tax attributable to property specified at item 3. (Divide item 3 by item 2 and multiply the result by item 4.) 5 Credit for death taxes imposed in the country named above (the smaller of item 1 or item 5). Also enter on line 13 of Part 2—Tax Computation 6 SCHEDULE Q—Credit for Tax on Prior Transfers Part 1. Transferor Information IRS office where estate tax return was filed Date of death Name of transferor Social security number A B C if section 2013(f) (special valuation of farm, etc., real property) adjustments to the computation of the credit were made (see page 23 of the instructions). Check here  Part 2. Computation of Credit (see instructions on page 23) Transferor Total A, B, & C Item C B A 1 Transferee’s tax as apportioned (from worksheet, (line 7  line 8) x line 35 for each column) 2 Transferor’s tax (from each column of worksheet, line 20) 3 Maximum amount before percentage requirement (for each column, enter amount from line 1 or 2, whichever is smaller) % % 4 % Percentage allowed (each column) (see instructions) 5 Credit allowable (line 3 x line 4 for each column) TOTAL credit allowable (add columns A, B, and C of line 5). Enter here and on line 14 of Part 2—Tax Computation 6 Schedules P and Q—Page 32 (The instructions to Schedules P and Q are in the separate instructions.) 1 2 3 4 5 6 Decedent’s Social Security Number