IRS Form 706 for 2025: A Comprehensive Filing Checklist
Overview of Form 706 for 2025
The 2025 IRS Form 706 serves as the United States Estate and Generation-Skipping Transfer Tax Return for the estates of decedents who died after December 31, 2024. This form is required for estates exceeding the applicable exclusion amount, which is set at $13,990,000 for 2025. The corresponding applicable credit amount is $5,541,800, representing the unified credit against estate tax liability.
The August 2025 revision of Form 706 incorporates significant structural changes aimed at enhancing efficiency for both taxpayers and the Internal Revenue Service. All schedules have been separated from the main form and must now be attached individually as applicable. Schedule A-1 has been renamed to Schedule T, and the Continuation Schedule has been renamed to Schedule W. Additionally, the representation authorization section previously included in Part 4 has been removed, requiring executors to file separate Forms 2848 or 8821 for representation purposes.
Filing Requirements and Deadlines
Form 706 must be filed for the estates of United States citizens or residents whose gross estate, combined with adjusted taxable gifts and specific exemptions, exceeds the $13,990,000 filing threshold for 2025. The return is generally due nine months after the date of the decedent’s death. However, executors may request an automatic six-month extension by filing Form 4768 before the original due date.
Even if an estate falls below the filing threshold, executors should consider filing Form 706 to elect portability of the deceased spouse's unused exclusion amount to a surviving spouse. This election allows the surviving spouse to apply the decedent’s unused exclusion amount to future transfers, potentially shielding up to $27,980,000 from estate and gift taxes for married couples. The portability election is made automatically by filing a timely and complete Form 706 unless the executor affirmatively opts out.
Checklist for Completing Form 706
1. Gather Comprehensive Estate Documentation
Assemble all documents related to the decedent’s assets and liabilities, including deeds, bank statements, brokerage account statements, insurance policies, business ownership documents, and professional appraisals. Collect documentation for real estate holdings, securities portfolios, mortgages, and notes receivable, life insurance proceeds, jointly owned property, transfers made during the decedent’s lifetime, powers of appointment, and annuities.
The death certificate must be attached to the return. If the decedent died testate, a certified copy of the will is also required. For 2025, verify that all asset values reflect the $13,990,000 basic exclusion amount when determining filing requirements. Comprehensive documentation ensures accurate valuation and proper reporting on the appropriate schedules.
2. Complete All Required Schedules and Attachments
Attach all necessary schedules based on the types of assets in the estate. Schedule A reports real estate holdings, Schedule B covers stocks and bonds, Schedule C lists mortgages and notes receivable, Schedule D includes life insurance proceeds on the decedent’s life, Schedule E addresses jointly owned property, Schedule F reports miscellaneous property including household goods and personal effects, Schedule G covers transfers during the decedent’s lifetime, Schedule H lists powers of appointment, and Schedule I addresses annuities.
Each schedule requires detailed descriptions and accurate valuations as of the date of death or alternate valuation date if that election is made. If electing special-use valuation under section 2032A, both Schedule A and Schedule T must be completed. Schedule U should be attached if claiming the qualified conservation easement exclusion under section 2031(c).
3. Complete Decedent and Executor Information
Provide complete information in Part 1 regarding the decedent’s personal data, including full legal name, Social Security number, date of birth, date of death, and domicile at time of death. Enter the executor’s name, address, telephone number, and Social Security number or employer identification number. If multiple executors are appointed, list all names, but only one signature is required if that executor is authorized to act on behalf of the others.
Executors must provide documentation proving their status, such as a certified copy of court orders or letters testamentary. For electronic payment of estate tax, provide complete banking information if making payments through the Electronic Federal Tax Payment System.
4. Calculate Tax Liability in Part 2
Complete Part 2 to calculate the estate tax liability. Enter the total gross estate from Part 5 on line 1. Subtract allowable deductions for funeral expenses, administration costs, debts, mortgages, losses, state death taxes, marital deductions, and charitable deductions to arrive at the taxable estate on line 3. Add adjusted taxable gifts made after 1976 on line 4 to determine the tax base on line 5.
Calculate the tentative tax using Table A on line 6. Subtract gift taxes paid on post-1976 gifts on line 7 to determine the gross estate tax on line 8. Calculate the applicable credit amount based on the basic exclusion amount on line 9d, then apply additional credits for state death taxes paid, foreign death taxes, and prior transfer credits to determine the net estate tax due. For 2025, the tentative tax on $13,990,000 equals $5,541,800.
5. Report Charitable Deductions on Schedule O
Use Schedule O to report charitable, public, and similar gifts and bequests that qualify for the estate tax charitable deduction under section 2055. Provide the name and address of each charitable beneficiary, the amount of each bequest, and sufficient detail to demonstrate that the transfer qualifies for the deduction.
Eligible recipients include the United States government, state and local governments, qualified religious and charitable organizations, and certain veterans organizations. Properly documented charitable bequests can significantly reduce the taxable estate, but incomplete information may result in the disallowance of the deduction. Attach copies of relevant will provisions or trust instruments showing the charitable transfers.
6. Execute Proper Signatures and Filing Procedures
The executor must sign and date the return in Part 7 under penalty of perjury, affirming that the information provided is true, correct, and complete. If multiple executors are appointed, all are responsible for the return, though only one signature is required if that executor is authorized to act on behalf of the others. The paid preparer, if applicable, must also sign the return and provide their identifying information, including PTIN. Form 706 cannot be filed electronically. It must be submitted by mail to the appropriate IRS address.
For returns filed before July 1, 2019, mail to the Department of the Treasury, Internal Revenue Service Center, Kansas City, MO. For returns filed on or after July 1, 2019, check the IRS Where to File page for updated mailing addresses.
7. Attach Required Appraisals and Supporting Documentation
Ensure that all property values listed on the schedules are supported by appropriate documentation. For real estate reported on Schedule A, attach detailed legal descriptions and professional appraisals when the value exceeds certain thresholds or when required by the IRS. For closely held business interests, provide business valuation reports prepared by qualified appraisers.
For items of tangible personal property reported on Schedule F with individual values exceeding $3,000, attach appraisals from qualified professionals. Life insurance policies must be supported by Form 712 from each insurance company. Attach copies of relevant Forms 709 for prior gift tax returns if adjusted taxable gifts are reported. File Form 8971 along with Schedules A to report basis information to beneficiaries.
8. Complete Generation-Skipping Transfer Tax Schedules
Complete Schedule R to calculate any generation-skipping transfer tax owed by the estate on direct skips to skip persons. A direct skip occurs when property passes from the decedent to a person two or more generations below the decedent, such as a grandchild, or to certain trusts for their benefit.
Calculate the GST tax by applying the maximum estate tax rate of forty percent to the taxable amount after considering the GST exemption available for 2025, which equals the basic exclusion amount of $13,990,000. If the estate includes trusts with GST tax liability, complete Schedule R-1 as a separate form to notify trustees of the GST tax due. Proper allocation of the GST exemption can preserve wealth for younger generations while minimizing transfer tax liability across multiple generations.
9. Review All Calculations and Elections for Accuracy
Review the entire return for mathematical accuracy and consistency across all schedules and parts. Verify that totals from individual schedules match the amounts entered in Part 5—Recapitulation. Verify that all claimed attached schedules and documentation properly support deductions. Review Part 3—Elections by the Executor to confirm that appropriate elections have been made, including alternate valuation under section 2032, special-use valuation under section 2032A, installment payment of estate tax under section 6166, and conservation easement exclusion under section 2031(c).
Ensure that all elections are properly documented and that required statements and agreements are attached. If filing solely to elect portability with an estate below the basic exclusion amount, simplified valuation rules under Regulations section 20.2010-2(a)(7)(ii) allow estimated values for certain marital and charitable deduction property.
10. Complete Portability Election in Part 6
Complete Part 6—Portability of Deceased Spousal Unused Exclusion if the decedent had a surviving spouse at the time of death. Filing a timely and complete Form 706 automatically elects to transfer any deceased spousal unused exclusion amount to the surviving spouse unless the executor affirmatively opts out by checking the box in Section A of Part 6. Section C calculates the DSUE amount portable to the decedent’s surviving spouse by subtracting the taxable estate and adjusted taxable gifts from the basic exclusion amount.
Section D reports any DSUE amount the decedent received from one or more predeceased spouses. Even estates below the filing threshold should strongly consider filing solely to preserve portability for the surviving spouse, potentially allowing the surviving spouse to shield up to $27,980,000 from estate and gift taxes.
Key 2025 Form Updates and Special Considerations
Structural Redesign and Schedule Separation
The 2025 Form 706 has undergone a comprehensive structural redesign to improve efficiency and usability. All schedules are now separated from the main form and must be attached individually as applicable. This separation enables executors to focus on completing only the schedules relevant to their specific estate, thereby reducing unnecessary paperwork. Schedule A-1, previously used for section 2032A special-use valuation, has been renamed to Schedule T.
The Continuation Schedule, used when additional space is needed for any schedule, has been renamed to Schedule W. These changes do not affect the substantive reporting requirements but provide a more organized structure for complex estates with numerous assets and deductions.
Removal of Representation Authorization Section
The representation authorization section previously included in Part 4 of Form 706 has been removed from the 2025 revision. Executors must now file Form 2848 for power of attorney or Form 8821 for tax information authorization if they wish to authorize a representative to act on behalf of the estate. This change aligns Form 706 with other IRS forms, allowing for more comprehensive representation agreements. Executors should complete and file these forms separately if they need representatives to receive confidential tax information, discuss the return with the IRS, or represent the estate in examinations or appeals.
Electronic Payment and Direct Deposit Options
For the first time, the 2025 Form 706 includes fields for direct depositing overpayments. If an overpayment is calculated on Part 2, line 23a, executors may enter routing and account information on lines 23b, 23c, and 23d to receive refunds via direct deposit. This feature provides faster refunds compared to paper checks.
For estates with a balance due on Part 2, line 22, the IRS encourages electronic payment through the Electronic Federal Tax Payment System. Executors should visit IRS.gov/Payments for information on available electronic payment options, including same-day wire transfers and direct debit from bank accounts.
Special-Use Valuation for Qualified Real Property
Estates electing special-use valuation under section 2032A for qualified farm or business real property must complete both Schedule A and Schedule T, attaching all required documentation. This includes agreements signed by all qualified heirs accepting personal liability for potential recapture tax, detailed descriptions of the property and its qualified use, evidence of material participation by the decedent or family members for at least five of the eight years preceding death, and calculations demonstrating that the property meets the statutory percentage requirements. The maximum reduction in value under section 2032A for 2025 is $1,420,000.
Special-use valuation can substantially reduce estate tax by valuing qualifying property based on its actual use as a farm or business rather than its highest and best use for development purposes.
Conservation Easement Exclusion
Estates may elect to exclude a portion of the value of land subject to a qualified conservation easement by completing Schedule U. Under section 2031(c), the exclusion is the lesser of the applicable percentage of the land’s value after certain reductions or $500,000. The land must be located in the United States or its territories and must have been owned by the decedent or a family member for at least three years before death.
The conservation easement must be granted by the decedent, a family member, the executor, or a trustee no later than the date of the election. If the land is owned indirectly through a partnership, corporation, or trust, the decedent must have owned at least thirty percent of the entity directly or indirectly.
Simplified Valuation for Portability Elections
Estates filing Form 706 solely to elect portability of the deceased spouse's unused exclusion amount may use simplified valuation procedures under Regulations section 20.2010-2(a)(7)(ii). When the gross estate is below the basic exclusion amount, and the entire estate passes to the surviving spouse through marital deduction property or to qualified charities, executors may estimate values rather than obtaining formal appraisals. This provision recognizes that precise valuations are unnecessary when no estate tax is due, and the primary purpose of filing is to preserve the unused exclusion amount for the surviving spouse. However, executors must still provide reasonable good-faith estimates of property values and complete all required sections of the return.
Estate Tax Closing Letter Fee Reduction
The fee for requesting an estate tax closing letter has been reduced from sixty-seven dollars to fifty-six dollars for requests received on or after May 21, 2025. The estate tax closing letter provides formal confirmation from the IRS that the estate tax examination has been completed and the tax liability has been satisfied.
While not required for all estates, this letter can provide valuable assurance to executors and beneficiaries that the IRS has accepted the return as filed and does not intend to conduct further examination.
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.
This comprehensive checklist provides executors and tax professionals with a structured approach to completing Form 706 for 2025 estates, ensuring compliance with applicable laws while maximizing available tax benefits for heirs and beneficiaries.
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