Instructions for Form 706 (2019) Checklist
Scope and Purpose
This checklist applies to Form 706, the United States Estate (and Generation-Skipping Transfer)
Tax Return, for decedents dying after December 31, 2018, including calendar year 2019 deaths.
The return reports the gross estate, applies the estate tax exemption, and computes federal estate tax and generation-skipping transfer tax when required.
Form 706 also supports a portability election to transfer the deceased spousal unused exclusion to a surviving spouse, even when no estate tax is due. It is a transfer tax filing and does not reconcile income tax credits or individual tax programs.
Filing Context and Threshold Rules
Filing requirements depend on the gross estate combined with adjusted taxable gifts and applicable exclusions, not on gross estate alone. Estates below the basic exclusion amount may still require filing when making a portability election under Treasury Regulation §
20.2010-2(a)(7)(ii).
Executors should evaluate filing requirements early, especially when gift tax history, trust terminations, or generation-skipping transfer arrangements are present. Clear documentation reduces delays with the Internal Revenue Service and avoids future verification issues.
Ten-Step Preparation Checklist
Step 1: Confirm Decedent Identity and Executor Authority
Verify the decedent’s full legal name, Social Security number, date of death, and residency status for estate tax purposes under United States rules. Confirm the executor’s legal authority and identify the primary contact when multiple executors are appointed.
Determine whether the estate involves a deceased spouse and whether portability election planning is required—document identity and authority details in Part 1: Decedent and Executor
Information.
Step 2: Determine Whether Form 706 Must Be Filed
Assess whether filing is required because the gross estate plus adjusted taxable gifts exceeds the estate tax exemption for 2019. Alternatively, confirm whether Form 706 is filed solely to elect portability of the deceased spousal unused exclusion.
Retain calculations supporting the filing decision, including estimates of decedent’s assets and prior Form 709 filings. Clear workpapers support compliance with filing requirements and later
IRS review.
Step 3: Inventory Decedent’s Assets and Assign Schedules
Prepare a complete inventory of decedent’s assets and assign each item to the appropriate
Form 706 schedules. Typical schedules include Schedule A: Real Estate, Schedule B: Stocks and Bonds, and Schedule D: Life Insurance.
Only schedules relevant to the estate’s facts are required, but all reported items must support the recapitulation totals. Accurate classification improves consistency across IRS forms and ancillary forms.
Step 4: Establish Fair Market Value at Date of Death
Determine fair market value as of the date of death for all includible property unless an alternate valuation election is made. Maintain valuation support, including appraisals, brokerage statements, and bank records.
Life insurance proceeds reported on Schedule D may require documentation from the insurer, including Form 712. Clear valuation methods reduce disputes over estate tax and generation-skipping transfer tax computations.
Step 5: Gather Deduction and Expense Documentation
Collect documentation for deductible expenses and map each item to the proper schedule.
Funeral and administrative expenses are reported on Schedule J, while marital trust property is reported on Schedule M.
Charitable transfers supporting a charitable foundation or trust agreement are reported on
Schedule O. Proper documentation supports allowable deductions and reduces the risk of disallowed estate tax exclusions.
Step 6: Reconcile Lifetime Gifts Using Form 706 Worksheets
Obtain all prior Forms 709 and reconcile taxable gifts using Form 706 gift reconciliation worksheets. Do not rely on Form 709 schedules alone for estate tax computation purposes.
Document efforts to identify unreported gifts and adjustments, as gift tax history affects estate tax liability. Accurate reconciliation ensures the correct application of the unified estate and gift tax framework.
Step 7: Complete Executor Elections Carefully
Review Part 3 elections, including alternate valuation, marital trust elections, and portability election decisions. Confirm executor authority under the trust agreement or governing instruments before making elections.
Each election can affect tax due, future planning, and IRS review outcomes. Maintain written support for each election, explaining the rationale for each decision.
Step 8: Compute Estate and GST Tax
Compute estate tax using Part 2: Tax Computation, applying the unified rate structure and applicable exclusion amount. Ensure calculations reflect current law and recent developments affecting transfer taxes.
If direct skips exist, complete Schedule R and Schedule R-1 for generation-skipping transfer tax reporting. GST exemption allocation must align with the concepts in section 2612 and the reported schedules.
Step 9: Assemble Filing Package and Attachments
Assemble Form 706 pages, schedules, and continuation sheets in the order required by the instructions. Include required attachments such as the death certificate and supporting valuation documents.
Confirm that schedules reconcile to the recapitulation section and that column headings and totals are consistent. Organized assembly facilitates processing by the Internal Revenue
Service.
- Full IRS transcript retrieval (Wage & Income + Account)
- Professional tax form review
- Preparation & filing support
- Tax relief options if you owe the IRS
Step 10: Sign, File, and Retain Proof
Ensure the executor signs page 1 under penalties of perjury and dates the return correctly.
Verify the filing deadline, generally nine months from the date of death, and request extensions using Form 4768 if needed.
Confirm the correct IRS filing address before mailing and retain proof of timely filing. Maintain a complete PDF copy of the estate records for future correspondence related to refunds or verification.
Structural and Line Orientation Notes
Part 1 contains decedent and executor information, while Part 2 performs tax computation rather than gross estate listing. Part 5 is the recapitulation section, not the signature area.
GST reporting uses Schedules R and R-1 only, and no Schedule N exists for Form 706.
Understanding the form structure helps avoid misreporting and processing delays.
Final Review Guidance
Review all entries for consistency with filing requirements, valuation support, and prior gift tax records. Confirm that estate tax exclusion and portability election details align with applicable law.
Consult experienced tax professionals or estate attorneys when complex trust arrangements, marital trust planning, or generation-skipping transfer exposure exists. Careful review supports accurate compliance and efficient administration.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
