United States Estate (and Generation-Skipping
Transfer) Tax Return 2011 Checklist
When Form 706 Applies for 2011 Estate and GST Tax Filings
Form 706 for tax year 2011 reports federal estate tax and generation-skipping transfer tax for
decedents who died after December 31, 2010, and before January 1, 2012. The return applies the estate tax and generation-skipping transfer tax exemptions in effect for that period, as established by federal law governing 2011 transfers.
Filing applies when the gross estate, combined with adjusted taxable gifts and specific exemption amounts, exceeds the filing threshold for 2011. Filing also applies when the executor elects portability so a surviving spouse may use the decedent’s unused exclusion amount, even when the gross estate falls below the filing threshold.
Specific income tax provisions enacted in later years do not apply to Form 706 for 2011.
Economic impact payments, shared responsibility provisions, later tax reform rules, unemployment exclusions, and energy credit changes do not affect this return. Estate and transfer tax changes enacted under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 govern the 2011 filing requirements.
Purpose and Scope of the 2011 Estate Tax Return
Form 706 for 2011 serves as the primary mechanism for reporting the value of a decedent’s gross estate and determining any estate or generation-skipping transfer tax liability. The return also establishes the formal record used to allocate applicable exclusions, deductions, and exemptions available under the law in effect for 2011.
Executors use the return to report property interests owned or controlled by the decedent at death, certain lifetime transfers, and deductions permitted under federal statute. The form also documents elections that affect surviving spouses and future transfer tax treatment.
Overview of the Ten-Step Filing Process
The following checklist provides a structured process for completing Form 706 for tax year 2011.
Each step reflects requirements contained in the 2011 instructions and addresses documentation, valuation, reporting, and execution obligations. The sequence follows the logical order for preparing a complete and accurate estate tax return.
Step 1: Determine Whether Filing Is Required
Determine whether Form 706 must be filed by comparing the gross estate, adjusted taxable gifts, and applicable exemption amount against the 2011 filing threshold. Consider whether the estate will elect portability to preserve the decedent’s unused exclusion amount for a surviving spouse.
Gather foundational records, including a certified death certificate, the decedent’s Social
Security number, documentation of domicile, and a comprehensive list of assets. Establish fair market values as of the date of death or the alternate valuation date if that election applies.
Step 2: Compile Property Valuations for the Gross Estate
Obtain complete and accurate valuations for all property included in the gross estate under
Internal Revenue Code Section 2031. Collect real estate appraisals, brokerage statements, bank records, insurance policies, retirement account statements, and documentation of business interests.
Organize valuation materials by asset category to support proper reporting on each applicable schedule. Ensure that valuation dates and methodologies align with the requirements specified in the 2011 instructions.
Step 3: Document Lifetime Gifts and Prior Transfers
Collect records of all lifetime gifts made by the decedent that may constitute adjusted taxable gifts. Review available copies of previously filed Forms 709 to determine amounts already reported and exemption allocations previously applied.
Include documentation showing the nature, value, and date of each gift. Accurate reporting ensures that prior transfers integrate correctly into the estate tax computation.
Step 4: Identify Generation-Skipping Transfers
Review estate records to identify transfers that may trigger the generation-skipping transfer tax.
Determine whether property passed to skips or through trusts is subject to GST treatment.
Document any prior GST exemption allocations made during the decedent’s lifetime. This information determines whether Schedule R applies and how exemption amounts must be allocated for 2011.
Step 5: Confirm Executor Authority
Gather documentation establishing the executor’s or personal representative’s authority to act on behalf of the estate. Obtain letters testamentary, letters of administration, or other
court-issued appointment documents. Confirm whether a power of attorney applies for representation purposes. Verify that the individual signing the return has legal authority to do so under applicable law.
Step 6: Complete Asset Schedules A Through J
Prepare each applicable asset schedule based on the property included in the estate. Complete
Schedule A for real estate, Schedule B for stocks and bonds, Schedule C for mortgages, notes, and cash, and Schedule D for insurance on the decedent’s life.
Complete Schedule E for jointly owned property, Schedule F for other miscellaneous property,
Schedule G for transfers during life, Schedule H for powers of appointment, Schedule I for annuities, and Schedule J for funeral and administration expenses. Attach supporting appraisals, account statements, and title documentation for each reported item.
Step 7: Report Debts and Liabilities on Schedule K
Document all outstanding debts, mortgages, and liens owed by the decedent at the time of death on Schedule K. Include creditor names, balances, and supporting agreements or statements.
Report funeral expenses and administration costs on Schedule J in accordance with the 2011 instructions. Ensure that each deduction claimed reflects an allowable expense under the applicable rules.
Step 8: Calculate the Taxable Estate and Deductions
Reduce the gross estate with allowable deductions to determine the taxable estate. Apply the marital deduction using Schedule M and the charitable deduction using Schedule O, following the valuation and eligibility rules in effect for 2011.
Confirm that the marital deduction does not exceed the value of the property passing to the surviving spouse. Verify that charitable deductions meet substantiation requirements and statutory limitations.
Step 9: Complete Schedule R for GST Tax When Applicable
Prepare Schedule R when generation-skipping transfers apply to the estate. Identify skip individuals, non-skip individuals, and property subject to GST treatment. Allocate the GST exemption and calculate any resulting tax liability using the rates and rules in effect for 2011.
Distinguish between transfers occurring during life and those occurring at death, as instructed.
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Step 10: Execute and Submit the Return
Sign and date the completed return under penalties of perjury. Include the executor’s or representative’s name, title, address, and telephone number. Assemble all schedules and attachments in the order specified in the 2011 instructions. Mail the return to the address designated for Form 706 filings for the 2011 tax year.
Key Schedule Updates and Clarifications for 2011
Several schedules reflect updates or clarifications specific to the 2011 form year. Understanding these changes supports accurate preparation and compliance.
Schedule R: Generation-Skipping Transfer Tax
Schedule R for 2011 incorporates the GST exemption amount and applicable rate in effect for that year. The schedule requires clear identification of skip individuals, non-skip persons, and property subject to GST.
The instructions explain how to allocate GST exemption to lifetime transfers versus transfers occurring at death. These rules replace formats tied to prior exemption frameworks.
Schedule O: Charitable, Public, and Similar Gifts
Schedule O for 2011 requires itemized reporting of all charitable gifts and bequests. The instructions clarify substantiation requirements for contributions of property and require disclosure of whether each item qualifies as wholly or partially deductible.
The schedule applies the limitations of Internal Revenue Code Section 2055 as in effect for
2011. Proper classification and valuation determine the allowable deduction amount.
Final Considerations for Accurate Filing
Form 706 for 2011 requires careful coordination of valuations, documentation, and statutory rules applicable to that year. Executors benefit from maintaining organized records and verifying consistency across schedules.
A complete and timely filing establishes the estate’s compliance position and preserves elections that affect surviving spouses and future transfers. Accurate preparation reduces the risk of processing delays and subsequent adjustments.
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