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11340: 706 - Estate Tax Returns FAQs


706 Estate

Choose from the following frequently asked questions about Form 706:

 

Click on a link to navigate to the answer:

  1. When is Form 706 due?
  2. How do I create a 706 return?
  3. What is the difference between Form 706 and Form 1041?
  4. Who is required to file Form 706?
  5. How are Estate Tax installments figured?
  6. Is there a maximum "Special-Use" valuation?
  7. How much is the basic exclusion?
  8. Can I e-file Form 706?
  9. Can more than one Executor sign the return?
  10. Do I need to attach any additional documents before mailing the return?
  11. Is a surviving spouse able to claim any unused exclusion amounts?
  12. What if the decedent was neither a U.S. resident or U.S. citizen?
  13. How do I make additional 712 Part I screens?
  14. Does Drake produce a "Line 7 Worksheet" for a 706 return?
  15. Does the DSUE automatically apply to the surviving spouse?

  1. When is Form 706 due?
    • Generally, taxpayers file Form 706 to report estate and/or Generation Skipping Tax (GST) within 9 months after the date of the decedent's death. If unable to file Form 706 by the due date, the taxpayer may request a 6-month extension of time to file by filing Form 4768.

  2. How do I create a 706 return?
    • The 706 return is created like most other returns in the software through the Open/Create menu. Please refer to the related article below if you already have a 1040 return created using the ID needed for the 706.

  3. What is the difference between Form 706 and Form 1041?
    • The executor of a decedent's estate files Form 706 to figure any estate tax levied on the entire taxable estate (not just on the share received by a particular beneficiary). Conversely, Form 1041 can be filed annually by the fiduciary of a domestic decedent's estate, trust, or bankruptcy estate to report the income, deductions, gains, losses, etc. and any income tax liability of the estate or trust.

  4. Who is required to file Form 706?
    • For decedents who died in 2018, Form 706 must be filed by the executor of the estate of every U.S. citizen or resident:
      1. Whose gross estate, plus adjusted taxable gifts and specific exemption, is more than $11,180,000; (More information on gross estates is available in the 706 instructions, starting on page 2) or,
      2. Whose executor elects to transfer the DSUE amount to the surviving spouse, regardless of the size of the decedent's gross estate. More information is available in the 706 instructions, Part 6.

  5. How are Estate Tax installments figured?
    • The 2017 amount used in figuring the 2% portion of estate tax payable in installments is $1,520,000.

  6. Is there a maximum "Special-Use" valuation?
    • The 2017 ceiling on special-use valuation is $1,140,000.

  7. How much is the basic exclusion?
    • The 2017 basic exclusion amount is $11,180,000.

  8. Can I e-file Form 706
    • Neither Form 706 or Form 4768 may be e-filed. File Form 706 at the following address:
      • Department of the Treasury
        Internal Revenue Service Center
        Cincinnati, OH 45999
    • If using a private delivery service (PDS), mail to:
      • 201 W. River Center Boulevard
        Covington, Kentucky 41011
        Attn: Submission Processing, Stop
        31

  9. Can more than one Executor sign the return?
    • If there is more than one executor, all listed executors are responsible for the return. It is sufficient for only one of the co-executors to sign the return. Drake Software provides space for both an executor and second executor, if applicable, on screen 1. If there are multiple executors (more than 2), click the Multiple Executors link from screen 1 to enter the additional executors. Entering a second executor will automatically check box 6d on page 1 of the 706 return.

  10. Do I need to attach any additional documents before mailing the return?
    • The death certificate must be attached to the return. If the decedent was a citizen or resident of the U.S., and died testate (leaving a valid will), attach a certified copy of the will to the return. If you cannot obtain a certified copy, attach a copy of the will and an explanation of why it is not certified. Other supplemental documents may be required as explained in the 706 instructions.

  11. Is a surviving spouse able to claim any unused exclusion amounts?
    • Section 303 of the Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010 authorized estates of decedents dying on or after January 1, 2011, to elect to transfer any unused exclusion to the surviving spouse. The amount received by the surviving spouse is called the deceased spousal unused exclusion, or DSUE, amount. More information is available in the 706 instructions, Part 6.

  12. What if the decedent was neither a U.S. resident or U.S. citizen?
    • Decedents who were neither U.S. citizens nor U.S. residents at the time of death, file Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, for the estate of nonresident not a citizen of the United States.

  13. How do I make additional 712 Part I screens?
    • If multiple 712 Part I screens are needed in a return, press Control+Page Down  to create a new Part I screen.

  14. Does Drake produce a "Line 7 Worksheet" for a 706 return?
    • An estate return in Drake Software does not produce a Line 7 Worksheet. You will need to complete this form outside of the software.
  15. Does the DSUE automatically apply to the surviving spouse?
    • If you intend to elect portability of the DSUE amount, timely filing a complete Form 706 is required.

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