The Essentials of Completing the Estate Tax Return (Form 706)
If your estate requires a Form 706, you must complete Parts 1–5, together with the required schedules. Estate tax returns are frequently audited by the IRS, so be sure to follow recommended practices for completing an auditable form. Also be aware of what happens after you complete Form 706.
How to Complete Parts 1 and 2 of Estate Form 706
If the estate you’re administering requires a Form 706 for any reason, you must complete the first three pages, together with all the other schedules pertinent to the estate. In Part 1 of Form 706, report [more…]
Alternate and Special Valuation: Part 3 of Estate Form 706
In Part 3 of Form 706, the estate administrator can choose to make any of four tax elections depending on if these elections apply to the decedent and benefit the estate. The first two elections, [more…]
Estate Tax Installments and Postponements: Part 3 of Form 706
An estate’s administrator can use Part 3 of Form 706 to make elections concerning the payment of federal estate taxes. When electing to pay the tax in installments, you need to verify that the estate qualifies [more…]
How to Complete Lines 4–7 of Part 4: Estate Form 706
Part 4 of tax Form 706 provides the IRS with information regarding the estate’s decedent. Lines 4 and 5of Part 4 identify the decedent’s surviving spouse, if any, and any entity that will benefit substantially [more…]
How to Complete Lines 8–16 of Part 4: Estate Form 706
In Part 4 of Form 706, lines 8–16 are designed to remind you of other property that may be includible in the decedent’s estate and, consequently, is taxable. Be aware that if you aren’t including this [more…]
How to Complete Part 5 of Estate Form 706
Part 5 of Form 706 is used to summarize the gross estate by carrying forward the asset totals from individual Schedules A through I and the deductions from Schedules J through U. This summarizing process [more…]
Tips for Preparing an Auditable Estate Form 706
Because only estates with a high asset threshold have to file Form 706, the IRS audits a higher percentage of these returns than any other type. Prepare the return and all its exhibits with this in mind [more…]
What Happens after Estate Form 706 Is Complete?
The IRS will issue Letter 627, Estate Tax Closing Letterif it accepts your estate tax return (Form 70) as filed, or if you and the IRS reach an agreement after a 706 audit. The closing letter, although [more…]
