Drake Tax - 706 - Estate Tax Returns FAQs
Article #: 11340
Last Updated: October 18, 2024
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.
How to Create
Form 706 is created like most other returns in the software through the Open/Create menu. If you already have a 1040 return created using the ID needed for the 706, see Drake Tax - 706/1040: Using The Same SSN on Both Returns.
Form 706 vs. 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.
Filing Requirement
See IRS Instructions for filing thresholds.
e-fileable?
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
Kansas City, MO 64999
If using a private delivery service (PDS), mail to:
Internal Revenue Submission
Processing Center
333 W. Pershing Road
Kansas City, MO 64108
Multiple Executors
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 Tax 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 Form 706, page 1.
Documents Attached
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.
Surviving spouse and unused exclusions
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.
Not 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.
Additional 712 Part I screens
If multiple 712 Part I screens are needed in a return, press Ctrl + Page Down to create a new Part I screen.
"Line 7 Worksheet"
An estate return in Drake Tax does not produce a Line 7 Worksheet. You will need to complete this form outside of the software.
DSUE
If you intend to elect portability of the DSUE amount, timely filing a complete Form 706 is required.
Schedule B, C, or other
To enter a Schedule B, C, and other schedules on a 706 return, go to the PROP screen and choose schedule from the list at the top.
Form 8971-A
To get Form 8971-A to produce, go to the PROP screen. Select the relevant property, then choose the Beneficiary Information tab and make the necessary selections.