The executor of a decedent's estate files Form 706 for two purposes:
- to figure the estate tax imposed by Chapter 11 of the IRC on the entire estate.
- to figure the generation-skipping transfer (GST) tax imposed by Chapter 13 of the IRC on direct skips (transfers to skip persons of interests in property included in the decedent's gross estate).
For the purposes of calculating the GST tax, a skip person is a "natural person", i.e., not a trust, to whom property was transferred from the estate and is two or more generations below the decedent.
Form 706 must be filed for the estate of a US citizen or resident for either of these two scenarios:
- The gross estate, plus adjusted taxable gifts and specific exemption, is more than the basic exclusion amount for the tax year.
- The executor elects to transfer the deceased spousal unused exclusion (DSUE) amount to the surviving spouse.
If the estate is required to file Form 706, it must be filed within 9 months after the decedent's death. Refer to the IRS instructions for additional filing requirements.
To prepare a Form 706 United States Estate Tax return, from the Quick Menu of TaxSlayer Pro select:
- 706 - United States Estate Return
Form 706 is not revised annually, therefore the latest form revision may be several years old.
Form 706 cannot be electronically filed. This is an IRS limitation. Mail Form 706 and all required schedules and attachments to the appropriate address in the instructions.
Note: This is a brief overview of Form 706 in TaxSlayer Pro. It is not intended as tax advice.