Instructions for Form 706 (2012) Checklist
This checklist guides preparation of the 2012 revision of Form 706 for estates of decedents who died in calendar year 2012. It supports federal estate tax computation and generation-skipping transfer reporting when required.
As an estate tax return within the unified transfer tax system, this filing depends on schedule placement, valuation support, and election accuracy. Using IRS forms carefully helps reduce errors that create tax due exposure or delay Internal Revenue Service processing.
Ten-Step Checklist
Step 1: Verify decedent identity and correct return type
Confirm the decedent’s legal name, Social Security number, date of death in 2012, and domicile status for estate tax purposes. This step controls whether the federal estate tax return is filed on
Form 706 or Form 706-NA.
Use Form 706 for U.S. citizens or residents and Form 706-NA for nonresident noncitizens, applying situs rules to property transferred. Attach the death certificate and keep a PDF file copy for estate records.
Step 2: Determine filing purpose and threshold considerations
Identify whether filing is required for actual estate tax, for a portability election, or for GST tax reporting tied to generation-skipping transfer events. These goals affect how Parts 5 and 6 are completed and reviewed.
Do not rely only on the exemption amount test. Apply the applicable exclusion amount framework under IRC section 2001 and the Unified Exclusion Amount rules, considering estate and gift taxes coordination and any prior gift tax history.
Step 3: Establish executor authority and signature compliance
Confirm the decedent’s executor has authority to act and gather appointment records, contact details, and signing capacity documentation for the filing process. This supports correct execution under Internal Revenue Service signature standards.
When more than one fiduciary serves, follow the executor signing rules rather than informal delegation. Proper signatures reduce processing holds and support the estate tax return’s validity if later challenged.
Step 4: Gather and organize gross estate documentation
Compile documentation for the gross estate, including real estate, securities, business interests, trust interests, receivables, and any life estate arrangements. This inventory supports valuation and prevents omissions that increase estate tax liability.
Retain date-of-death fair market value support using appraisals, statements, and summaries.
Use Adobe Acrobat to store clean PDF file workpapers and organize item files so supporting values are searchable by column heading.
Step 5: Complete asset schedules in the correct locations
Report each asset on the schedule that matches the IRS forms structure and avoids misclassification errors that distort the federal estate tax computation. Accurate schedule mapping also supports later basis reporting and administration decisions.
Use Schedule A for real estate, Schedule B for stocks and bonds, and Schedule C only for cash and notes receivable. Do not place liabilities on asset schedules, because debts belong on deduction schedules.
Step 6: Report life insurance properly on Schedule D
Report life insurance policies on the schedule for insurance and include proceeds when payable to the estate or when ownership rights cause inclusion. This protects against understated federal estate tax and related audit risk.
Maintain insurer records and life insurance statements showing policy ownership and beneficiary details. When documentation is stored electronically, ensure the PDF file set is complete and consistent with form line entries.
Step 7: Complete additional gross estate schedules as applicable
Use the correct schedules for jointly owned property, annuities, retained interests, and transfers that require inclusion analysis. Proper classification helps decision-makers evaluate estate management steps and potential tax relief opportunities.
When transfers trigger inclusion rules, document the governing facts clearly and avoid forcing items into miscellaneous categories. Accurate reporting supports generation-skipping transfer review and prevents rework during assembly.
Step 8: Report deductions and liabilities on proper schedules
Report deductible debts, administration expenses, and losses on the dedicated deduction schedules rather than Schedule C. Correct placement supports taxable estate computation and reduces risk of disallowed deductions.
Maintain clear support for administrative costs and claims, and keep expenses tied to substantiation. Avoid treating one schedule as a universal home for deductions, because Form
706 separates categories by design.
Step 9: Compute taxable estate and GST tax when applicable
Compute the taxable estate by subtracting allowable deductions from the gross estate and applying the correct 2012 tax rate schedule. Confirm that the estate tax exclusion amount and the unified exclusion amount are applied consistently.
Compute GST tax only when generation-skipping transfer events require it and when GST exemption allocation is needed. Use Schedule R-1 only when the GST rules apply, and avoid adding GST concepts by default.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Apply marital deduction and QDOT rules correctly
Apply marital deduction rules based on whether the surviving spouse is a U.S. citizen and whether the transfer structure qualifies. This analysis affects estate tax liability and the surviving spouse’s future planning position.
When a portability election is intended, complete the DSUE-related reporting in Part 6 to preserve the Deceased Spousal Unused Exclusion Amount. This supports the estate planning of married individuals and aligns with the surviving spouse's needs.
Form-Specific Limitations and Assembly Notes
The 2012 framework reflects the American Taxpayer Relief Act of 2012 environment and related guidance, such as Notice 2012-21, Internal Revenue Bulletin 2012-28, and Ruling 2013-17.
References to later items, such as the Tax Cuts and Jobs Act of 2017 or Revenue Procedure
2022-32, should be treated as recent developments, not 2012 governing rules.
Before filing, reconcile schedule totals, confirm Part 5 and Part 6 entries align with elections, verify signatures, and check the Filing deadline rules or extension using Form 4768. Use the current “Where to file” instructions, keep proof of mailing, and consult a tax professional or legal professional when issues involve Windsor v. United States.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
