CandleFocus Glossary Editor
Form 706 is a United States federal tax form used to calculate the estate taxes owed by a decedent’s estate. This form must be completed by the executor of the decedent’s estate when their gross estate, adjusted taxable gifts, and specific exemptions exceed $12.06 million in 2022 (adjusted to $12.92 million in 2023, to account for inflation). The purpose of the form is to calculate the federal estate taxes that the estate may owe, which includes any generation-skipping transfer taxes owed under Chapter 13 of the Internal Revenue Code (IRC).
Form 706 is a comprehensive form that requires detailed information about the assets of the estate, liabilities, deductions, taxes, and estate and generation-skipping transfers. It has several sections: Part A determines the taxable estate of the decedent, Part B specializes in the determination of unified credit, Part C lays out deductions, Part D determines estate taxes, and Part E indicates generation-skipping transfer taxes due. The executor must also include various documents and statements within the form, such as the decedent’s final income tax return, annual exclusion statements, and statements of conspicuous transfers.
When filing form 706, the executor must also include Form 706-GS(D), which is used to calculate the generation-skipping transfer taxes due. This form is used to determine any taxes owed on trust distributions subject to the generation-skipping transfer tax. The executor must also include the decedent’s date of death valuations for the estate's assets, and the extensions and calculations for marital and qualified terminable interest property deductions.
Form 706 is a thorough and detailed document that must be completed carefully by the executor in order for the estate to pay the correct taxes, including generation-skipping transfer taxes, owed to the IRS. Failure to accurately and completely fill out Form 706 and submit it in a timely manner can result in penalties and fines for the executor and the estate.
Form 706 is a comprehensive form that requires detailed information about the assets of the estate, liabilities, deductions, taxes, and estate and generation-skipping transfers. It has several sections: Part A determines the taxable estate of the decedent, Part B specializes in the determination of unified credit, Part C lays out deductions, Part D determines estate taxes, and Part E indicates generation-skipping transfer taxes due. The executor must also include various documents and statements within the form, such as the decedent’s final income tax return, annual exclusion statements, and statements of conspicuous transfers.
When filing form 706, the executor must also include Form 706-GS(D), which is used to calculate the generation-skipping transfer taxes due. This form is used to determine any taxes owed on trust distributions subject to the generation-skipping transfer tax. The executor must also include the decedent’s date of death valuations for the estate's assets, and the extensions and calculations for marital and qualified terminable interest property deductions.
Form 706 is a thorough and detailed document that must be completed carefully by the executor in order for the estate to pay the correct taxes, including generation-skipping transfer taxes, owed to the IRS. Failure to accurately and completely fill out Form 706 and submit it in a timely manner can result in penalties and fines for the executor and the estate.