How to Complete Schedule F for Estate Form 706
Use Schedule F: Other Miscellaneous Property Not Reportable Under Any Other Schedule, when filing federal estate tax returns (Form 706), to report property that doesn’t belong on any other schedule. Be able to demonstrate the value of each item listed on this schedule. Have any unvalued or hard-to-value property appraised by a professional.
Items that are reported on Schedule F include:
Personal and household articles, clothing, and jewelry: If the decedent owned any collectible items worth more than $3,000 or any collections whose combined value exceeds $10,000, attach an expert appraisal (and a statement of that appraiser’s qualifications) in the field as an exhibit to the return.
Automobiles and other motor vehicles: Book value or a letter from an auto dealer is usually sufficient. For collectible cars, get an expert appraisal.
Debts, judgments, claims, and refunds due the decedent: When the decedent and a surviving spouse receive a tax refund on a jointly filed return, the excess of the amount the decedent paid of the total tax paid over his or her actual tax liability is the amount you include on Form 706. Check local laws to verify that this is the case in your area.
Checks payable to the decedent, whether received before or after death.
Rights, royalties, and leaseholds: Obtain expert valuations for any rights, royalties, or leaseholds (extended right to lease property) and include them here.
Farm products, crops, livestock, and farm machinery (if applicable): Have these items valued by a farm appraiser.
Insurance on another person’s life: Obtain Form 712 (which gives the value of the policy at the decedent’s death) for each policy from the insurance company and attach it as an exhibit to the return.
Interests in partnerships, sole proprietorships, joint ventures, and other unincorporated businesses: Value these interests according to the Instructions to Form 706. Report any real estate held in a sole proprietorship here as part of that proprietorship, not on Schedule A.
Reversionary and remainder interests: A reversionary interest is future interest which can come back to the decedent who was the original transferor of the interest. If the decedent funded a trust for the benefit of his or her mother while she lived on the condition that the transferred property reverts back to the decedent upon the mother’s death, the decedent has retained a reversionary interest in that property.
A remainder interest is future interest that can come to the decedent after a prior interest terminates where the decedent wasn’t the original transferor of the interest.
Qualified terminable interest property (QTIP): Your decedent may have received qualified terminable interest property from a predeceased spouse.
If the surviving spouse (your decedent) still retained an interest in the property at his or her death, the full date-of-death value of the property shows up in the estate, though his or her interest terminates at death. If the QTIP property meets the other requirements for deduction at this time, it qualifies for that deduction because it’s treated as having passed from your decedent.
Safe-deposit box: Report the existence of a safe-deposit box on Schedule F, Question 3. If any property in the box isn’t includible in the decedent’s estate, explain why.
If the decedent transferred ownership of an item to his or her revocable living trust during life as part of his or her estate plan, don’t include it on Schedule F. Report the item on Schedule G.