Form 706 (Rev. August 2017) Checklist for Decedents Dying in 2017
Year-Specific Context
For 2017, the basic exclusion amount is $5,490,000, and the applicable credit amount is $2,141,800. Form 706 filing threshold is determined by adding the decedent’s gross estate, adjusted taxable gifts, and any specific exemption claimed before 1977; if the total exceeds $5,490,000, a return must be filed. Portability of deceased spousal unused exclusion (DSUE) under Section 2010©(5) is automatic if Form 706 is timely filed and a spouse survives the decedent, unless the executor affirmatively opts out. Rev. Proc. 2017-34 permits estates not required to file (gross estate under $5,490,000) to make a late portability election if filed on or before the second anniversary of the decedent’s date of death, provided the return is complete and properly prepared.
Seven-Step Form 706 Filing Checklist For 2017
STEP 1: Determine Filing Requirement
Form 706 is required if gross estate plus adjusted taxable gifts plus specific exemption under IRC Section 2521 (before 1976 repeal) exceeds $5,490,000, OR if the executor elects to transfer DSUE to the surviving spouse regardless of estate size. The filing deadline is nine months after the date of death. Use Form 4768 for an automatic six-month extension (total deadline: 15 months after death).
STEP 2: Gather Decedent Documentation
Obtain a certified death certificate (required attachment). Collect a certified copy of the will (or an explanation if uncertified), trust documents, and letters of testamentary or administration from the probate court. Verify the decedent’s Social Security number and identify domicile at death by state and address. If the decedent is a nonresident alien, use Form 706-NA instead of Form 706.
STEP 3: Identify, Value, and Schedule All Gross Estate Assets
Value all property includible in the gross estate as of the date of death. If electing alternate valuation under Section 2032, value property six months after death; alternate valuation can only be elected if it decreases both gross estate value AND the sum of estate and GST taxes. Include:
● Real property (U.S. and foreign) on Schedule A
● Stocks and bonds on Schedule B
● Mortgages, notes, and cash on Schedule C
● Life insurance proceeds on Schedule D (obtain Form 712 from each insurer for every policy, whether included in gross estate or not)
● Jointly held property on Schedule E
● Miscellaneous property on Schedule F
● Transfers within three years of death (Section 2035) and retained interests (Sections 2036–2037) on Schedule G
● Annuities on Schedule I
● Powers of appointment on Schedule H
STEP 4: Complete Part 5 Recapitulation and Special Elections
Report totals from Schedules A through I in Part 5, Recapitulation. Enter total gross estate on line 11. If claiming a qualified conservation easement exclusion, subtract the Schedule U amount and enter the result on line 13.
Special-Use Valuation (Section 2032A): If electing special-use valuation, complete Schedule A-1. The maximum value reduction for 2017 is $1,120,000 (adjusted for inflation from a 1997 base of $750,000). Attach a signed agreement from all qualified heirs consenting to personal liability for tax recapture if the property ceases to qualify. Section 6324B lien is imposed on all real property in a specially valued estate.
STEP 5: Calculate Tax Using 2017 Unified Rate Schedule
Complete Part 2 Tax Computation using Table A Unified Rate Schedule. Enter tentative tax on line 6. Apply the applicable credit amount of $2,141,800 on line 9e (based on the $5,490,000 basic exclusion). If the decedent received DSUE from the predeceased spouse who died after December 31, 2010, enter that amount on line 9b and identify the predeceased spouse in Part 6 Section D. DSUE application is subject to the Last Deceased Spouse Limitation rule.
STEP 6: Claim Deductions via Schedules J, K, L, M, and O
Attach schedules to claim deductions in Part 5 Recapitulation:
● Schedule J: Funeral and administration expenses subject to claims (executor commissions, attorney fees, and court costs).
● Schedule K: Debts of the decedent and mortgages/liens on property.
● Schedule L: Losses during administration and expenses not subject to claims.
● Schedule M: Marital deduction for bequests to surviving spouse. Property passing to a non-U.S. citizen spouse qualifies only if passing to a Qualified Domestic Trust (QDOT) under Section 2056A; complete a separate QDOT election on Schedule M.
● Schedule O: Charitable deduction for gifts to qualified organizations; provide legal description and valuation detail.
● State Death Tax Deduction: Claim on line 3b. If anticipated but not yet paid, it must be finalized and claimed within four years of the return filing date or before the expiration of any later period. Attach the state death tax payment certification.
STEP 7: Make Portability Election and Assemble Return
● Portability Election: If the decedent is survived by a spouse, filing a timely and complete Form 706 within nine months of death, or if Form 4768 extension is filed, before the end of the six-month extension period (making the total deadline 15 months after death), constitutes automatic election to transfer DSUE unless the executor checks the opt-out box in Part 6 Section A. Complete Part 6, calculating the DSUE amount available to transfer on line 10.
● Assembly and Signature: The executor signs and dates the return under penalties of perjury (no notary required). Paid preparer must sign, date, and provide a copy to the executor. Assemble pages 1–4, all applicable schedules, and required supplemental documents in order. For the Section 6166 installment payment election, note that additional security and elections may be necessary.
Required Supplemental Documents:
● Certified death certificate (required)
● Certified copy of will or written explanation if uncertified
● Form 712 for each life insurance policy
● Copies of all post-1976 gift tax returns (Form 709) if not previously submitted
● Trust and power of appointment instruments referenced in return
● Form 706-CE if claiming foreign death tax credit
● Certified inventory and liabilities from foreign probate if the decedent was a U.S. citizen but not a U.S. resident
● For the Schedule A-1 election, a fully executed Agreement to Special Valuation signed by all qualified heirs
● For GST reporting, Schedules R and R-1, if applicable, to direct skips
Filing: Mail to the IRS service center specified in the Form 706 instructions or use a designated private delivery service.
Key 2017 Form Changes
Part 6, the Portability section, includes expanded DSUE calculation guidance and clarification of the Last Deceased Spouse Limitation rule. Filing a timely and complete Form 706 automatically triggers a portability election unless the executor opts out. Schedule A-1 instructions updated to reflect the 2017 ceiling of $1,120,000 for Section 2032A special-use valuation. Part 3 Elections clarified that alternate valuation requires an election to decrease both gross estate value and the sum of estate/GST taxes.
Key Limitations
Nonresident aliens use Form 706-NA, report only U.S.-located assets, and receive a limited unified credit of $13,000, reduced by lifetime gifts. Marital deduction for a non-U.S. citizen spouse requires a QDOT election under Section 2056A.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
