Form 706 (2017): U.S Estate & GST Tax Return
Checklist
This checklist supports the preparation of an Estate Tax Return on IRS Form 706 for decedents who died after December 31, 2016, including those who died in 2017. It focuses on federal estate tax computation, GST tax rules for direct skips, and the core filing requirements tied to the basic exclusion amount and the filing threshold for the year of death.
Form 706 is part of the transfer tax system and differs from a final tax return filed on Form 1040.
It is prepared using fair market value as of the date of death unless a valid election applies, and it may also be filed to preserve a deceased spouse's portability election even when estate taxes are not otherwise due.
Purpose and Filing Framework
IRS Form 706 is used to calculate the federal estate tax on taxable estates and, when applicable, the generation-skipping transfer tax on direct skips. It also supports portable election reporting that can transfer unused exclusion to a surviving spouse, which affects later estate planning and trust planning decisions.
The return is filed by the executor or a person treated as executor under Internal Revenue
Service rules. Accurate return preparation supports estate management, reduces exposure to enforcement issues, and helps avoid delays when requesting an estate tax closing letter or tax closing letter confirmation.
Year-Specific Filing Threshold and Exclusion Concepts
The filing requirements depend on the year of death and whether the gross estate plus adjusted taxable gifts exceeds the filing threshold. Estates may still elect portability even when the exemption limit prevents tax due, which can benefit blended families and high-net-worth individuals using credit-shelter trust strategies.
Filing is generally due nine months after death unless an extension of time is requested using
Form 4768. Timely filing matters because late filing can jeopardize a portability election and complicate transfer tax administration, including later requests tied to TC 421 or IRS transfer certificate procedures.
Ten-Step Checklist for Completing Form 706
Step 1: Confirm the decedent profile and filing requirement
Confirm the decedent’s identity details and determine whether the filing threshold is met based on the gross estate and adjusted taxable gifts. When the decedent is a noncitizen or non-resident alien, the situation applies; use Form 706-NA and follow the separate filing requirements.
If portability is desired, confirm that timely filing will be completed even if no tax is expected.
This step sets the foundation for estate planning outcomes tied to a deceased spouse and the basic exclusion amount.
Step 2: Establish executor authority and signature responsibility
Identify the executor and confirm authority through estate documents or court appointment records. Ensure the return is signed under penalties of perjury as required for IRS forms.
If more than one executor exists, list the contact executor and provide supporting information for others as required. Power-of-attorney actions should follow the Internal Revenue Service authorization process rather than being treated as part of Form 706 signing.
Step 3: Build the gross estate inventory using fair market value
Compile all property included in the gross estate, such as real property, financial accounts, and business interests, using fair market value as of the date of death. Appraisal reports should be obtained when valuing your estate involves assets that are difficult to value or require professional support.
This inventory should reflect the property's title and whether any estate tax lien issues could arise from incomplete reporting. Proper documentation also supports step-up in income tax basis discussions for beneficiaries, even though basis reporting is a separate compliance track.
Step 4: Gather ownership, beneficiary, and trust documentation
Collect deeds, account registrations, beneficiary designations, and trust instruments, including living trust records, when they affect included property. This documentation supports accurate schedule placement and confirms whether assets pass directly, through probate, or through trust planning structures.
The same records support later transfer tax questions and reduce confusion during tax season when estates are managed alongside other filings. Organized item files also help return preparation software users confirm entries when working in Adobe Acrobat.
Step 5: Complete the correct Form 706 schedules
Report real estate, stocks and bonds, cash, life insurance, jointly owned assets, and miscellaneous property on the appropriate asset schedules. Report transfer-related inclusions on the transfers schedule when estate tax purposes require inclusion of certain lifetime transfers.
Deductions belong on the correct deduction schedules and should not be mixed with asset reporting. Accurate schedule placement helps avoid mismatched totals and reduces the risk of follow-up questions during Internal Revenue Service review.
Step 6: Reconcile adjusted taxable gifts and transfer tax history
Obtain available gift tax filings and reconcile adjusted taxable gifts into the transfer tax computation. This step focuses on gift tax effects that impact the estate tax base rather than attempting to restate every lifetime transfer.
When prior filings are missing, a reasonable effort should be made to identify taxable gifts that affect the computation. This approach supports accurate analysis of filing requirements and reduces the risk of errors that require later correction work.
Step 7: Apply the marital deduction and portability election mechanics
Identify property qualifying for the marital deduction and report it consistently on the marriage deduction schedule. When the surviving spouse is not a U.S. citizen, confirm whether special trust planning rules apply before claiming the deduction.
If a portability election is intended, complete the required portability section and ensure timely filing or extension coverage through Form 4768. If portability is not desired, the opt-out entry must be completed, as silence should not be treated as an election.
Step 8: Evaluate GST tax only when applicable
Determine whether a generation-skipping transfer or generation-skipping transfer event exists, such as a direct skip to a skip person or a trust structured to trigger GST tax. GST schedules should be completed only when required by the facts and supported by beneficiary and trust documentation.
When GST applies, reconcile the generation-skipping transfer tax computation to the main tax calculation area. Proper GST reporting helps avoid later adjustments and supports clean transfer tax administration.
Step 9: Make valuation elections and support them with documentation
Apply alternate valuation or special valuation rules only when permitted and properly elected on
Form 706. Elections must be applied consistently and supported by appraisal reports and valuation workpapers.
If Section 6166 is used for extension-like installment payment treatment, ensure eligibility is documented, and the election is completed correctly. Elections should be reviewed carefully because errors can lead to additional taxes, interest, and enforcement issues.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Assemble, file, and request post-filing documentation when
needed
Assemble the complete Form 706 package, including required schedules and attachments, and verify that the totals reconcile across the return. Mailing should follow the proper address instructions, and mail postmarks should be retained to support timely filing proof.
When post-filing proof is needed, an account transcript request may be supported through Form
4506-T, and an estate tax closing letter may be requested through the applicable procedure.
Estates seeking an IRS transfer certificate should follow transfer certificate filing requirements and maintain tracking ID records for delivery confirmation.
Post-Filing Administration and Process Notes
Some estates track closing status through transcript indicators such as TC 421, though processing timing depends on the service's time and workload. When a user fee applies to specific relief requests, procedures may reference guidance such as Revenue Procedure
2022-32, and prior procedural guidance may include references such as Rev. Proc. 2017-34.
Return preparation practices vary by firm and by return preparation software, and performance considerations tend to be operational rather than tax technical. Professional advice is often appropriate for complex estates, especially when portability election strategy, trust planning, or
GST tax exposure affects long-term estate planning outcomes.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
