What Is a Form 706 Used For?

Form 706 is used by an executor of an estate to calculate the amount of tax owed on estates valued at more than $11,400,000, if the decedent died in 2019, or $11,580,000, for deaths in 2020. Form 706 also helps executors determine the overall value of an estate prior to distributing any assets to beneficiaries as outlined in the decedent’s will or trust. The IRS treats any inheritance on a stepped-up valuation—or a step-up in basis. That means the cost basis is adjusted to the fair market value of the inherited property as of the date of death. Using the stepped-up valuation methodology allows heirs to minimize capital gains taxes. The method also allows for a cleaner valuation process in terms of limiting the number of administrative tasks associated with the estate.

Who Needs to File Form 706?

Form 706 must be filed by the executor of the estate of every U.S. citizen or resident: Whose gross estate, adjusted taxable gifts, and specific exemptions total more than the exclusion amount: $11,400,000 for decedents who died in 2019, and $11,580,000 for 2020; or Whose executor elects to transfer the “deceased spousal unused exclusion” (DSUE) amount to the surviving spouse, regardless of the size of the decedent’s gross estate. To determine if the estate exceeds the exclusion amount, add together amounts 1, 2, and 3 below. 1.The adjusted taxable gifts made by the decedent after Dec. 31, 1976 2.The total specific exemption allowed under Section 2521 (as in effect before its repeal by the Tax Reform Act of 1976) for gifts made by the decedent after Sept. 8, 1976 3.The decedent’s gross estate valued as of the date of death The gross estate includes: 1.All property in which the decedent had an interest (including real property outside the U.S.) 2.Certain transfers made during the decedent’s life without adequate consideration 3.Annuities 4.The includable part of joint estates with rights of survivorship 5.The includable part of tenancies by the entirety 6.Certain life insurance proceeds 7.Property over which the decedent had a general power of appointment 8.Dower or curtesy (or statutory estate) of the surviving spouse 9.Community property in which the decedent had an interest

Where to Mail Form 706

You must file Form 706 to report estate or GSTT within nine months of the date of the decedent’s death. If you can’t file Form 706 by the due date, you can apply for an automatic six-month extension using Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes. After July 1, 2019, file Form 706 at the following address: Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999 If you’re using a private delivery service (including DHL Express, FedEx, and UPS), send Form 706 to: Internal Revenue Submission Processing Center, 333 W. Pershing Road, Kansas City, MO 64108 If you’re filing an amended Form 706, use the following address (even if you’re using a private delivery service): Internal Revenue Service Center, Attn: E&G, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915 The estate tax and the GSTT are due within nine months of the date of the decedent’s death. Make checks payable to “United States Treasury” and note the decedent’s name, Social Security number, and “Form 706” on the check. Alternatively, you can pay online through the Electronic Federal Tax Payments System (EFTPS).

* The free templates above are provided for reference only, for all legal matters, you should always talk to a professional. After downloading the free template, if you need to fill in it or modify the content on your Mac, you may need a powerful PDF editor for Mac. Using PDF Reader Pro, you can add your own details and edit the PDF more conveniently. Download the form and fill it out using PDF Reader Pro. Click the button "Free Download" to download the app.