Instructions for Form 706 (2013) Checklist
Purpose and scope
Form 706 is the federal estate tax return used to report the gross estate, allowable deductions, and tax liability for decedents dying after December 31, 2012. It also supports a timely portability election for a surviving spouse when DSUE rules apply.
This return addresses estate tax and generation-skipping transfer tax under Internal Revenue
Service rules and does not reconcile income tax credits or other individual income tax programs.
It focuses on accurate schedules, valuations, deductions, and elections.
Filing context and recent developments
The filing framework relies on the applicable exemption amount, federal estate tax rate, and
GST exemption rules in effect for the date of death, with later-law awareness such as the Tax
Cuts and Jobs Act. Executors should confirm filing requirements early to avoid missed deadlines.
A complete filing may be needed even when the tax due is zero, especially when portability election planning is part of an estate plan for blended families or long-term wealth transfer goals. Documentation should support fair market value and the filing process.
Ten-Step Filing Checklist
Step 1: Confirm identity, authority, and filing deadline
Confirm the decedent’s legal name, date of death, months of death, and Social Security number, ensuring consistent entries across the return and all attached schedules. Verify the estate representative’s authority and identify the primary contact when multiple executors exist.
Confirm the filing deadline, generally nine months after death, and document whether an extension of time will be requested if valuations or trust arrangements remain unresolved. Keep a summary memo in the file for review.
Step 2: Determine whether Form 706 must be filed
Determine whether the gross estate plus adjusted taxable gifts and other required add-backs exceed the filing threshold for the year of death under federal estate tax rules. Confirm whether prior Form 709 reporting affects the estate tax computation through gift tax history.
If filing to elect portability for a deceased spouse, confirm the return will be complete and timely, even if the exemption amount prevents estate tax liability. Track DSUE support documents and ensure the filing process follows the instructions.
Step 3: Assemble required documents before reporting assets
Gather the death certificate, will, executor appointment records, and trust instruments that control property transferred at death, including trust structures tied to a credit shelter trust or
QTIP trusts. Organize records so that each schedule item is linked to a supporting document.
Collect date-of-death statements for bank accounts, brokerage assets, real estate, and life insurance policy files, including Form 712 as the Life Insurance Statement support when required. Keep evidence for debts, medical expenses, and administration costs.
Step 4: Establish valuation methods and the reporting approach
Use fair market value at the date of death unless an alternate valuation election is made and applied consistently across the gross estate schedules. Build a valuation file that supports every reported figure and explains unusual valuation methods.
Obtain qualified appraisals for real estate, closely held interests, and property subject to discounts, including interests affected by retained annuity trusts or life estate arrangements.
Ensure values align with trust agreements and estate planning documentation.
Step 5: Report assets on the correct schedules
Report real estate on Schedule A and report securities on Schedule B using clear descriptions and supportable fair market value calculations for each asset. Use Schedule C for cash, notes, and receivables, keeping debts out of asset schedules.
Report life insurance proceeds on Schedule D with Form 712 support and report joint interests on Schedule E with proper inclusion percentages and ownership facts. Use Schedule F for miscellaneous assets and Schedule G for includible transfers under Chapter 11 rules.
Step 6: Separate assets from deductions to prevent misclassification
Maintain separate workpapers for gross estate assets and deductible items to reduce errors that inflate totals or misplace debt obligations. This separation helps reconcile schedules and supports review by a tax professional.
Treat funeral and administration expenses as deductions, not as asset adjustments, and retain documentation supporting each claim. Track how expenses interact with any estate income tax filings to avoid conflicting treatments.
Step 7: Apply marital and charitable deductions correctly
Report Marital Deduction property on Schedule M, including QTIP trusts when the requirements are met, and elections are properly stated. Ensure that marital transfers are clearly described and supported by the estate plan and governing instruments.
Report charitable transfers on Schedule O with sufficient identification of recipients and controlling provisions, and confirm they are not mixed into marital deduction reporting. Preserve records for charitable family foundation bequests and similar estate planning transfers.
Step 8: Address GST tax only when triggered
Evaluate whether GST tax applies by identifying direct skip transfers, transfers to generation-skipping trust structures, or trust terminations and trust distribution patterns that create generation-skipping transfer consequences. Treat dynasty trusts and long-term wealth transfer designs as fact-driven.
Complete Schedule R or Schedule R-1 only when the facts and instructions require GST reporting, and link computations to GST exemption usage and Section 2612 concepts. Do not treat gift tax concepts as substitutes for generation-skipping transfer tax rules.
Step 9: Reconcile recapitulation, elections, and computations
Confirm that schedule totals flow into the recapitulation section correctly and that descriptions match across schedules when assets appear in multiple areas. Recheck that elections, including alternate valuation and installment payment elections, are consistently applied.
Compute the tentative tax and credits using the correct federal estate tax rate and exemption amount for the date of death, then confirm any GST tax computations reconcile to Schedule R reporting. Document assumptions and retain computation workpapers.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Execute, assemble, and file the return
Ensure the executor signs under penalties of perjury and complete the paid preparer section when return preparation software or professional preparation is used. Confirm the final package includes required attachments, appraisals, and continuation statements.
File the return using the instructions’ mailing guidance and request an extension of time using
Form 4768 when needed, while recognizing that an extension does not extend time to pay.
Retain a complete copy for estate administration records and future inquiries.
Special note on nonresident decedents
Form 706 applies to U.S. citizen or resident decedents, while nonresident alien estates generally use a different return framework and different filing thresholds. Confirm residency and domicile early to avoid filing the wrong estate tax return.
When nonresident rules apply, the taxable base focuses on U.S.-situated property and often requires specialized estate-planning review by an estate attorney for cross-border planning.
Treat classification and situs rules as separate from this checklist.
Final review before submission
Confirm all schedules, elections, and totals are internally consistent, and verify each major reported value has a traceable document supporting fair market value. Ensure deductible items are supported and properly categorized, especially debts and medical care expenses.
For complex trust arrangements, including asset protection provisions or rules against perpetuities considerations, a final review by an estate attorney or tax professional helps reduce risk during tax season. Keep records organized for future questions or audits.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
