Form 706-GS(D) (2016): GST Distribution Checklist
A skip person files Form 706-GS(D) to calculate and report any generation-skipping transfer tax due on taxable distributions received from a trust during calendar year 2016. Trustees do not file this tax return; instead, trustees provide required reporting details to recipients using Form
706-GS(D-1).
This checklist supports accurate reporting under generation-skipping transfer tax return requirements by relying on verified trustee information and applicable IRS guidance. It focuses on the proper treatment of inclusion ratio data, the valuation of property transferred, and the determination of tax due.
Scope and Key Concepts
What This Checklist Covers
This checklist applies to taxable distributions made from a trust arrangement to a skip person during calendar year 2016. It explains how to complete Form 706-GS(D) using trustee-issued
Forms 706-GS(D-1) for generation-skipping transfer reporting.
The guidance reflects filing considerations under Chapter 13 and Section 2612, including how
GST tax connects to estate tax rules and exemption allocations. It supports accurate reporting for estate plans involving multigenerational wealth transfers and dynasty trusts.
What This Checklist Does Not Cover
This checklist does not apply to taxable termination events, which trustees report on Form
706-GS(T). It also excludes direct skip reporting handled through Form 709, the Federal Gift Tax
Return, and IRS Form 709.
Other topics such as qualified severance elections, retrospective allocations under section
9100, or automatic allocation rules are outside its scope. Those matters often involve regulatory complexity and may require assistance from tax professionals.
What Triggers Filing
A skip person who receives a taxable trust distribution generally must file Form 706-GS(D) to report GST tax due. The filing requirement depends on the trustee's reported inclusion ratio and the applicable exemption amount.
Suppose all distributions shown on Form 706-GS(D-1) reflect an inclusion ratio of zero; filing is generally not required. Distributions with a zero inclusion ratio are excluded from GST tax calculations even when the return is filed.
Core Documents and Information You Must Have
Before preparing the return, all Forms 706-GS(D-1) received for 2016 should be collected and reviewed. These forms provide the foundation for reporting trust distribution values, all exemption allocations, and inclusion ratio data.
Accurate identification information is also required, including an SSN or EIN and a current correspondence address. Additional valuation records are needed only if reported amounts are disputed or incomplete under the trust agreement.
Ten-Step Filing Checklist
Step 1: Confirm Filer Responsibility
Confirm that the recipient qualifies as the skip person responsible for filing Form 706-GS(D). If filing on behalf of another individual, verify legal authority to act as the responsible person.
Step 2: Assemble All Forms 706-GS(D-1
Gather every Form 706-GS(D-1) received for the calendar year 2016 from trustees. Separate records by trust if distributions came from multiple trust structures.
Step 3: Review Inclusion Ratios to Determine Filing
Examine each Form 706-GS(D-1) to identify the inclusion ratio for every trust distribution. Filing is required only if at least one distribution reflects an inclusion ratio greater than zero.
Step 4: Complete Part I Identifying Information
Enter the skip person’s name and identifying number, using an SSN for individuals or an EIN for trusts. Provide the mailing address where IRS correspondence regarding the generation-skipping transfer tax return should be sent.
Step 5: Report Taxable Distributions in Part II
Report all taxable distributions received during 2016 with inclusion ratios above zero.
Trustee-provided figures should be used unless corrected values are required due to valuation or reporting issues.
Step 6: Apply Correct Valuation Standards
Use the fair market value of each trust distribution as of the distribution date. Reduce reported values by any consideration provided in connection with the transfer of property.
Step 7: Compute GST-Taxable Amounts Accurately
Apply the inclusion ratio to each distribution following the Form 706-GS(D) computation sequence. Avoid shortcut methods that bypass the required item-by-item structure.
Step 8: Apply the Correct Tax Rate
Determine the applicable federal gift and estate tax rate using the maximum tax rate table in the instructions. For transfers occurring after December 31, 2012, the applicable GST tax rate is 40 percent.
Step 9: Address Expenses and Payments
Deduct allowable expenses related to determining or collecting GST tax only as permitted by the instructions. When multiple inclusion ratios apply, expenses must be prorated accordingly.
- 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 and Submit the Return
Ensure the distributee or authorized representative signs the return and includes copies of all
Forms 706-GS(D-1). Mail the completed filing to the Internal Revenue Service Center in
Cincinnati, OH 45999, as specified in the 2016 instructions.
Practical Reminders
Form 706-GS(D) is filed on a calendar year basis and reflects trust distributions received during
2016. Trustee documentation is essential to accurate reporting and should always be retained.
Additional attachments, such as full trust agreements or life insurance policy documentation, should be included only when specifically required. Standard filings generally rely on trustee forms and proper valuation support.
Final Pre-Mail Review
Before mailing, confirm that only distributions with inclusion ratios greater than zero are reported and that all Forms 706-GS(D-1) are attached. Verify identification numbers, payment accuracy, and proper signature placement.
Confirm the IRS mailing address and retain a complete copy of the filed return for estate taxation records. Accurate preparation supports compliance with federal estate tax and generation-skipping transfer tax rules.
If you’re missing tax documents or want to ensure the numbers you enter match IRS records, we can help.
