Instructions for Form 706
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Instructions for Form 706
(Rev. July 2026)
United States Estate (and Generation-Skipping Transfer) Tax Return
For decedents dying after December 31, 2025.
Section references are to the Internal Revenue Code
unless otherwise noted.
Revisions of Form 706
For Decedents Dying
After
and Before
Use Revision of
Form 706 Dated
December 31, 1998
January 1, 2001
July 1999
December 31, 2000
January 1, 2002
November 2001
December 31, 2001
January 1, 2003
August 2002
December 31, 2002
January 1, 2004
August 2003
December 31, 2003
January 1, 2005
August 2004
December 31, 2004
January 1, 2006
August 2005
December 31, 2005
January 1, 2007
October 2006
December 31, 2006
January 1, 2008
September 2007
December 31, 2007
January 1, 2009
August 2008
December 31, 2008
January 1, 2010
September 2009
December 31, 2009
January 1, 2011
July 2011
December 31, 2010
January 1, 2012
August 2011
December 31, 2011
January 1, 2013
August 2012
December 31, 2012
January 1, 2017
August 2013
December 31, 2016
January 1, 2018
August 2017
December 31, 2017
January 1, 2019
November 2018
December 31, 2018
January 1, 2025
August 2019
December 31, 2024
August 2025
Future Developments
For the latest information about developments related to
Form 706 and its instructions, such as legislation enacted
after they were published, go to IRS.gov/Form706.
What’s New
Various dollar amounts and limitations indexed for
inflation. For decedents dying in 2026, the following
amounts are applicable.
• The basic exclusion amount is $15,000,000.
• The ceiling on special-use valuation is $1,460,000.
• The amount used in figuring the 2% portion of estate
tax payable in installments is $1,940,000.
• The basic credit amount is $5,945,800.
The IRS will publish amounts for future years in annual
revenue procedures.
Reminders
Identifying exhibits. Copies of tax returns filed with
Form 706 must be identified as exhibits to the Form 706.
Aug 25, 2026
Form 706 and schedules redesigned. The Form 706
and schedules were redesigned to work more efficiently
for taxpayers and the IRS. Additionally, all schedules
were separated from the form. The schedules should be
completed and attached to Form 706, as necessary.
Schedule T (Form 706). Schedule A-1 (Form 706) was
renamed to Schedule T (Form 706). The functionality of
this schedule is the same and should be completed and
attached to Form 706, as necessary.
Schedule W (Form 706). The Continuation Schedule for
Form 706 was renamed to Schedule W (Form 706). The
functionality of this schedule is the same and should be
completed and attached to Form 706, as necessary.
Representation authorization. A filer must use
Form 2848, Power of Attorney and Declaration
of Representative, or Form 8821, Tax Information
Authorization, to authorize another person to act on
behalf of the estate before the IRS. See Representation
Authorization, later, for more information.
Electronic payments. If you have access to U.S.
banking services or electronic payment systems, you
should use direct deposit for any refunds and pay
electronically for any payments, whenever possible. See
Line 22 and Line 23, later, for more information.
General Instructions
Purpose of Form
The executor of a decedent’s estate uses Form 706
to figure the estate tax imposed by chapter 11 of the
Internal Revenue Code. This tax is levied on the entire
taxable estate and not just on the share received by a
particular beneficiary. Form 706 is also used to figure
the generation-skipping transfer (GST) tax imposed by
chapter 13 on direct skips (transfers to skip persons of
interests in property included in the decedent’s gross
estate).
Which Estates Must File
For decedents who died in 2026, Form 706 must be filed
by the executor of the estate of every U.S. citizen or
resident:
1. Whose gross estate, plus adjusted taxable gifts and
specific exemption, is more than $15,000,000; or
2. Whose executor elects to transfer the deceased
spousal unused exclusion (DSUE) amount to the
surviving spouse, regardless of the size of the
decedent’s gross estate. See the instructions for
Part VI—Portability of Deceased Spousal Unused
Exclusion (DSUE), later, and sections 2010(c)(4) and
(c)(5).
Instructions for Form 706 (Rev. 7-2026) Catalog Number 16779E
Department of the Treasury Internal Revenue Service www.irs.gov
To determine whether you must file a return for the
estate under 1 above, add:
• The adjusted taxable gifts (as defined in section 2503)
made by the decedent after December 31, 1976;
• The total specific exemption allowed under section
2521 (as in effect before its repeal by the Tax Reform
Act of 1976) for gifts made by the decedent after
September 8, 1976; and
• The decedent’s gross estate valued as of the date of
death.
U.S. Citizens or Residents; Nonresident
Noncitizens
Two or more persons liable to file. If two or more
persons are liable for filing the return, they should all join
together in filing one complete return.
However, if they’re unable to join in making one
complete return, each person is required to file a return
disclosing all the information the person has about the
estate, including the name of every person holding an
interest in the property and a full description of the
property.
If the appointed, qualified, and acting executor is
unable to make a complete return as to any property, then
every person holding an interest in the property must, on
notice from the IRS, make a return regarding that interest.
Decedents who were neither U.S. citizens nor U.S.
residents at the time of death file Form 706-NA, United
States Estate (and Generation-Skipping Transfer) Tax
Return, Estate of Nonresident Not a Citizen of the United
States.
Gross Estate
The gross estate includes all property in which the
decedent had an interest (including property outside the
United States). It also includes:
• Certain transfers made during the decedent’s life
without an adequate and full consideration in money
or money’s worth,
• Annuities,
• The includible portion of joint estates with right of
survivorship (see the instructions for Schedule E
(Form 706)),
• The includible portion of tenancies by the entirety (see
the instructions for Schedule E (Form 706)),
• Certain life insurance proceeds (even though payable
to beneficiaries other than the estate) (see the
instructions for Schedule D (Form 706)),
• Digital assets (see the instructions for Schedule F
(Form 706)),
• Property over which the decedent possessed a
general power of appointment,
• Dower or curtesy (or statutory estate) of the surviving
spouse, and
• Community property to the extent of the decedent’s
interest as defined by applicable law.
Note: Under the special rule of Regulations section
20.2010-2(a)(7)(ii), executors of estates who are not
required to file Form 706 under section 6018(a), but who
are filing to elect portability of the DSUE amount to the
surviving spouse, are not required to report the value of
certain property eligible for the marital deduction under
section 2056 or 2056A or the charitable deduction under
section 2055. However, the value of those assets must
be estimated and included in the total value of the gross
estate. See the instructions for Part V, Item 10 and Item
23, later, for more information.
For more specific information, see the instructions for
Schedules A through I of Form 706.
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File Form 706 for the estates of decedents who were
either U.S. citizens or U.S. residents at the time of
death. For estate tax purposes, a resident is someone
who had a domicile in the United States at the time of
death. A person acquires domicile in a place by living
there, for even a brief period of time, with no definite
present intention of later moving. See Regulations section
20.0-1(b) for more information.
Residents of U.S. Territories
All references to citizens of the United States are subject
to the provisions of sections 2208 and 2209, relating to
decedents who were U.S. citizens and residents of a
U.S. territory on the date of death. If such decedents
became U.S. citizens only because of their connections
with a territory, then the decedents are considered
nonresidents not citizens of the United States for estate
tax purposes, and you should file Form 706-NA. If such
decedents became U.S. citizens wholly independently of
their connections with a territory, then the decedents are
considered U.S. citizens for estate tax purposes, and you
should file Form 706.
Executor
The term “executor” includes the executor, personal
representative, or administrator of the decedent’s estate.
If no executor is appointed, qualified, and acting in the
United States, every person in actual or constructive
possession of any of the decedent’s property is
considered an executor and must file a return.
Executors must provide documentation proving their
status. Documentations will vary but may include
documents such as certified copies of wills or court orders
designating the executor(s). Statements by executors
attesting to their status are insufficient.
Representation Authorization
The executor must use Form 2848, Power of Attorney
and Declaration of Representative, or Form 8821, Tax
Information Authorization, to authorize another person to
act for the executor before the IRS.
Complete and attach Form 2848 if you would like to
authorize:
• Another person to represent the estate;
• More than one person to receive confidential
information or represent the estate; or
• Someone to sign agreements, consents, waivers, or
other documents for the estate.
If you wish only to authorize someone to inspect
and/or receive confidential tax information verbally and/or
in writing, complete and attach Form 8821. Individuals
authorized by Form 8821 are not authorized to:
• Speak on behalf of the estate;
• Execute a request to allow disclosure of tax return or
tax return information to another third party;
Instructions for Form 706 (Rev. 7-2026)
• Advocate your position with respect to federal tax
laws;
• Execute waivers, consents, or closing agreements; or
• Represent you in any other manner before the IRS.
See the Instructions for Form 2848 and the Instructions
for Form 8821, for more information.
When To File
You must file Form 706 to report estate and/or GST
tax within 9 months after the date of the decedent’s
death. If you are unable to file Form 706 by the due
date, you may receive an extension of time to file. Use
Form 4768, Application for Extension of Time To File a
Return and/or Pay U.S. Estate (and Generation-Skipping
Transfer) Taxes, to apply for an automatic 6-month
extension of time to file.
Portability election. An executor can only elect to
transfer the DSUE amount to the surviving spouse if the
Form 706 is filed timely, that is, within 9 months of the
decedent’s date of death or, if you have received an
extension of time to file, before the 6-month extension
period ends.
Extension to elect portability. Executors who did not
have a filing requirement under section 6018(a) but failed
to timely file Form 706 to make the portability election may
be eligible for an extension under Rev. Proc. 2022-32,
2022-30 I.R.B. 101 (superseding Rev. Proc. 2017-34,
2017-26 I.R.B. 1282). Executors filing to elect portability
may now file Form 706 on or before the fifth anniversary of
the decedent’s death.
An executor wishing to elect portability under this
extension must state at the top of the Form 706 being
filed that the return is “Filed Pursuant to Rev. Proc.
2022-32 to Elect Portability under section 2010(c)(5)
(A).” See Rev. Proc. 2022-32 availbale at IRS.gov/irb/
2022-30_IRB#REV-PROC-2022-32 for more information.
Note: Any estate that is filing an estate tax return only
to elect portability and did not file timely or within the
extension provided in Rev. Proc. 2022-32 may seek
relief under Regulations section 301.9100-3 to make the
portability election.
Where To File
File Form 706 at the following address.
Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999
If you’re using a private delivery service (PDS), file at
this address.
Internal Revenue Submission Processing Center
333 W. Pershing Road
Kansas City, MO 64108
If you’re filing a supplemental Form 706, use the
following address.
Instructions for Form 706 (Rev. 7-2026)
Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
If you’re using a PDS for your supplemental Form 706,
use this address.
Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
Paying the Tax
The estate and GST taxes are due within 9 months of
the date of the decedent’s death. You may request an
extension of time for payment by filing Form 4768. In some
cases, you may also elect under section 6166 to pay in
installments or under section 6163 to postpone the part of
the tax attributable to a reversionary or remainder interest.
These elections are made by checking “Yes” on Part III,
lines 3 and 4 (respectively) and attaching the required
statements.
If the tax paid with the return is different from the
balance due as figured on the return, explain the
difference in an attached statement. If you have made
prior payments to the IRS, attach a statement to Form 706
including these facts.
See Line 22, later, for details on how to make
payments.
Supplemental Documents
Note: You must attach the death certificate to the return.
See Part I, Lines 9a and 9b, later.
If the decedent was a citizen or resident of the United
States and died testate (leaving a valid will), attach a
certified copy of the will to the return. If you cannot
obtain a certified copy, attach a copy of the will and an
explanation of why it is not certified.
Other supplemental documents may be required,
as explained later. Examples include Form 712, Life
Insurance Statement; Form 709, United States Gift (and
Generation-Skipping Transfer) Tax Return; Form 706-CE,
Certificate of Payment of Foreign Death Tax; trust and
power of appointment instruments; and state certification
of payment of death taxes. If you do not file these
documents with the return, the processing of the return
will be delayed.
If the decedent was a U.S. citizen but not a resident
of the United States, you must attach the following
documents to the return.
1. A copy of the inventory of property and the schedule
of liabilities, claims against the estate, and expenses
of administration filed with the foreign court of probate
jurisdiction, certified by a proper official of the court.
2. A copy of the return filed under the foreign
inheritance, estate, legacy, succession tax, or other
death tax act, certified by a proper official of the
foreign tax department, if the estate is subject to such
a foreign tax.
3
3. If the decedent died testate, a certified copy of the
will. See Part I, Lines 9a and 9b, later.
Rounding Off to Whole Dollars
You should round off cents to whole dollars on the return
and schedules. If you do round to whole dollars, you
must round all amounts. To round, drop amounts under
50 cents and increase amounts from 50 to 99 cents to
the next dollar. For example, $1.39 becomes $1 and $2.50
becomes $3.
Penalties
Late filing and late payment. Section 6651 provides for
penalties for both late filing and late payment unless there
is reasonable cause for the delay. The law also provides
for penalties for willful attempts to evade payment of tax.
The late filing penalty will not be imposed if the taxpayer
can show that the failure to file a timely return is due to
reasonable cause.
Reasonable-cause determinations. If you receive a
notice about penalties after you file Form 706, send
an explanation and we will determine if you meet
reasonable-cause criteria. Do not attach an explanation
when you file Form 706. Explanations attached to the
return at the time of filing will not be considered.
Understatement. Section 6662 provides a 20% penalty
for underpayments of estate or GST taxes due to
negligence, intentional disregard of rules and regulations,
or a substantial valuation understatement. A substantial
valuation understatement occurs when the reported value
of property is 65% or less of the actual value of the
property. A gross valuation understatement occurs when
the reported value of the property listed is 40% or less of
the actual value of the property. In cases involving a gross
valuation understatement, the penalty increases to 40%
of the underpayment. No penalty will be assessed if the
underpayment of estate tax, attributable to substantial or
gross valuation understatement, does not exceed $5,000.
Return preparer. Estate tax return preparers who
prepare any return or claim for refund which reflects an
understatement of tax liability due to an unreasonable
position are subject to a penalty equal to the greater of
$1,000 or 50% of the income earned (or to be earned) for
the preparation of each such return.
Estate tax return preparers who prepare a return or
claim for refund which reflects an understatement of tax
liability due to willful or reckless conduct are subject to a
penalty of $5,000 or 75% of the income earned (or income
to be earned), whichever is greater, for the preparation of
each such return.
Estate tax return preparers who prepare any return or
claim for a refund are required to furnish a copy to the
taxpayer, sign the return, and provide their PTIN but who
fail to do so are subject to a penalty of $50 for such failure,
unless it is shown that such failure is due to reasonable
cause and not due to willful neglect.
See sections 6694 and 6695, the related regulations,
and Announcement 2009-15, 2009-11 I.R.B. 687,
available at Announcement 2009-15, for more information.
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Consistent Basis Reporting
Certain estates are required to report to the IRS and the
recipient the estate tax value of each asset included in
the gross estate within 30 days of the due date (including
extensions) of Form 706 or the date of filing Form 706 if
the return is filed late. The basis of certain assets when
sold or otherwise disposed of must be consistent with
the basis (estate tax value) of the asset when it was
received by the beneficiary. To satisfy the consistent basis
reporting requirements, the estate must file Form 8971,
Information Regarding Beneficiaries Acquiring Property
From a Decedent, separately from the Form 706. Failure
to file Form 8971, when required, is subject to information
return penalties under sections 6721 and 6722. See Form
8971 and its instructions for more information.
Estate Tax Closing Letters
An estate tax closing letter (ETCL) will not be issued
unless a request is made via Pay.gov. To allow time for
processing, please wait at least 9 months after filing Form
706 to request an ETCL.
ETCL fee. See T.D. 10031 for more information. To
make an ETCL request you must go to Pay.gov to
submit a request and pay the user fee. Go to Frequently
Asked Questions on the Estate Tax Closing Letter, for
instructions and more information related to ETCLs.
Account transcript in lieu of ETCL. Instead of an
ETCL, the executor of the estate may request an
account transcript, which reflects transactions, including
the acceptance of Form 706 or the completion of an
examination. Account transcripts are available online to
registered tax professionals using the Transcript Delivery
System (TDS) or to authorized representatives making
requests using Form 4506-T, Request for Transcript of
Tax Return. Go to Transcripts in Lieu of Estate Tax
Closing Letters for specific instructions to request online
transcripts using the TDS or hardcopy transcripts using
Form 4506-T.
Note: For information about the release of nonresident
U.S. citizen decedents’ assets using transfer certificates
under Regulations section 20.6325-1, go to Transfer
Certificate Filing Requirements for the Estates of
Nonresident Citizens of the United States or write to:
Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
Obtaining Forms and Publications To
File or Use
Internet. You can access the IRS website at IRS.gov 24
hours a day, 7 days a week to:
• Download forms, including talking tax forms,
instructions, and publications;
• Order IRS products online;
• Research your tax questions online;
• Search publications online by topic or keyword;
Instructions for Form 706 (Rev. 7-2026)
• Use the online Internal Revenue Code, regulations, or
other official guidance;
• View Internal Revenue Bulletins (IRBs) published in
the last few years; and
• Sign up to receive local and national tax news by
email.
Other forms that may be required.
• Form SS-5, Application for a Social Security Card.
• Form 706-CE, Certificate of Payment of Foreign Death
Tax.
• Form 706-NA, United States Estate (and
Generation-Skipping Transfer) Tax Return, Estate of
Nonresident Not a Citizen of the United States.
• Form 709, United States Gift (and
Generation-Skipping Transfer) Tax Return.
• Form 709-NA, United States Gift (and
Generation-Skipping Transfer) Tax Return of
Nonresident Not a Citizen of the United States.
• Form 712, Life Insurance Statement.
• Form 2848, Power of Attorney and Declaration of
Representative.
• Form 4768, Application for Extension of Time
To File a Return and/or Pay U.S. Estate (and
Generation-Skipping Transfer) Taxes.
• Form 4808, Computation of Credit for Gift Tax.
• Form 8453-EG, E-file Declaration for Forms 709,
709-NA, 706, 706-A, 706-GSD, 706-GST, 706-NA,
706-QDT, and 708.
• Form 8821, Tax Information Authorization.
• Form 8822, Change of Address.
• Form 8879-EG, E-file Authorization for Forms 709,
709-NA, 706, 706-A, 706-GSD, 706-GST, 706-NA,
706-QDT, and 708.
• Form 8971, Information Regarding Beneficiaries
Acquiring Property From a Decedent.
Additional information. Pub. 559, Survivors, Executors,
and Administrators, may assist you in learning about and
preparing Form 706.
Specific Instructions
You must file Form 706 and all required schedules. File
Schedules A through I of Form 706, as appropriate, to
support the entries in Part V, items 1 through 9.
Caution: Make sure to complete the required pages and
schedules in their entirety. Returns filed without entries in
each field will not be processed.
IF . . .
THEN . . .
you enter zero on any item
of the Recapitulation
you need not file the schedule
(except for Schedule F (Form
706)) referred to on that item.
you are estimating the
value of one or more
assets pursuant to the
special rule of Regulations
section 20.2010-2(a)(7)(ii)
you must report the asset on
the appropriate schedule, but
you are not required to enter
a value for the asset. Include
the estimated value of the
asset in the totals entered on
Part V, items 10 and 23.
Instructions for Form 706 (Rev. 7-2026)
IF . . .
THEN . . .
you claim an exclusion on
item 12
complete and attach
Schedule U (Form 706).
you claim any deductions
on items 14 through 22 of
the Recapitulation
complete and attach
the appropriate schedules
to support the claimed
deductions.
you claim credits for foreign complete and attach
death taxes or tax on prior Schedule P (Form 706) or
transfers
Schedule Q (Form 706).
there is not enough space
on a schedule to list all the
items
attach Schedule W (Form
706) (or additional sheets) to
the schedule.
Also consider the following.
• Number the items you list on each schedule,
beginning with the number “1” each time, or using the
numbering convention as indicated on the schedule.
• If additional sheets are required for a schedule, use
Schedule W (Form 706) (or additional statements),
figure the total amount, and enter the amount on the
appropriate line for that schedule.
• Figure the total on each schedule for all items
listed including Schedule W (Form 706) (or additional
statements) and enter on the appropriate line for that
schedule. Do not carry the totals forward from one
schedule to the next.
• Enter the total(s) for each schedule on Part V.
• Do not complete the “Alternate valuation date” or
“Alternate value” columns of any schedule unless you
elected alternate valuation on Part III, line 1.
• When you complete the return, put all the required
pages together in the proper order.
Part I—Decedent and Executor
Line 2
Enter the SSN assigned specifically to the decedent. You
cannot use the SSN assigned to the decedent’s spouse.
If the decedent did not have an SSN, the executor should
obtain one for the decedent by filing Form SS-5 with a
local Social Security Administration (SSA) office.
Lines 3a through 3g
Enter the decedent’s domicile at the date of death. This
should include:
• City, town, or post office;
• County;
• State or province;
• Country; and
• ZIP code or foreign postal code.
The domicile should be the decedent’s address and not
the hospital or hospice address.
Line 4
Enter the year the decedent established the domicile
entered on lines 3a through 3g. For estate tax purposes,
a person acquires a domicile in a place by living
5
there, for even a brief period of time, with no definite
present intention of later moving. For this purpose, the
United States includes only the states and the District
of Columbia. See Regulations section 20.0-1 for more
information. If the decedent’s domicile is other than the
United States, see Residents of U.S. Territories, earlier.
Line 7a. Name of Executor
If there is more than one executor, enter the name of the
executor to be contacted by the IRS and see line 7l.
Line 7b. Executor’s TIN
Enter the executor’s taxpayer identification number (TIN).
Only one executor should complete this line. If there is
more than one executor, see line 7l.
Lines 7c through 7j. Executor’s Address
Use Form 8822 to report a change of the executor’s
address.
Line 7k. Executor’s Phone No.
Enter the executor’s phone number. If there is more than
one executor enter the phone number of the executor from
line 7a, and see line 7l.
Line 7l. Multiple Executors
Check here if there is more than one executor. On
an attached statement, provide the name, address,
telephone number, and SSN/TIN of any executor other
than the one named on line 7a.
Lines 9a and 9b
Line 12. Special Rule
If the estate is estimating the value of assets under the
special rule of Regulations section 20.2010-2(a)(7)(ii),
check here and see the instructions for Part V, Item 10
and Item 23.
Line 13. Supplementing Form 706
If you find that you must change something on a return
that has already been filed, you should:
• File another Form 706;
• Check the box on line 13;
• Include a statement of what has changed, along with
the supporting information; and
• Attach a copy of the original Form 706 that has
already been filed.
For the mailing address for supplemental Form 706,
see Filing Estate and Gift Tax Returns.
File the supplemental Form 706 at the following
address.
Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
If you’re using a PDS, file at this address.
Internal Revenue Service Center
Attn: E&G, Stop 824G
7940 Kentucky Drive
Florence, KY 41042-2915
If the decedent was a citizen or resident of the United
States and died testate (leaving a valid will), attach a
certified copy of the will to the return. If you cannot
obtain a certified copy, attach a copy of the will and an
explanation of why it is not certified. Check the boxes on
lines 9a and 9b, as applicable.
If you have already been notified that the return has
been selected for examination, you should provide the
additional information directly to the office conducting the
examination.
Line 10
Part II—Tax Computation
Check the box on line 10 to indicate that you attached the
death certificate to the return.
Note: A death certificate must be attached to the return.
In general, the estate tax is figured by applying the unified
rates shown in Table A to the total of transfers both
during life and at death, and then subtracting the gift
taxes, as refigured based on the date of death rates.
Table A—Unified Rate Schedule
$0
10,000
20,000
40,000
60,000
80,000
100,000
150,000
250,000
500,000
750,000
1,000,000
6
$10,000
20,000
40,000
60,000
80,000
100,000
150,000
250,000
500,000
750,000
1,000,000
––––
$0
1,800
3,800
8,200
13,000
18,200
23,800
38,800
70,800
155,800
248,300
345,800
.
Column D
Rate of tax on excess over
amount in column A
.
Column C
Tax on amount in column A
.
Column B
Taxable amount not over
.
Column A
Taxable amount over
18%
20%
22%
24%
26%
28%
30%
32%
34%
37%
39%
40%
Instructions for Form 706 (Rev. 7-2026)
See Worksheet TG, the Line 4 Worksheet, and the Line 7
Worksheet.
Note: You must complete Part II—Tax Computation.
Line 1
If you elected alternate valuation on Part III, line 1, enter
the amount you entered in the “Alternate value” column
of Part V, item 13. Otherwise, enter the amount from the
“Value at date of death” column.
Line 3b. State Death Tax Deduction
You may take a deduction on line 3b for estate,
inheritance, legacy, or succession taxes paid on any
property included in the gross estate as the result of the
decedent’s death to any state or the District of Columbia.
You may claim an anticipated amount of deduction
and figure the federal estate tax on the return before the
state death taxes have been paid. However, the deduction
cannot be finally allowed unless you pay the state death
taxes and claim the deduction within 4 years after the
return is filed, or later (see section 2058(b)) if:
• A petition is filed with the Tax Court of the United
States,
• You have an extension of time to pay under section
6161 or section 6166, or
• You file a claim for refund or credit of an overpayment
which extends the deadline for claiming the deduction.
Note: The deduction is not subject to dollar limits.
If you make a section 6166 election to pay the federal
estate tax in installments and make a similar election
to pay the state death tax in installments, see section
2058(b) for exceptions and periods of limitation.
If you transfer property other than cash to the state in
payment of state inheritance taxes, the amount you may
claim as a deduction is the lesser of the state inheritance
tax liability discharged or the fair market value (FMV)
of the property on the date of the transfer. For more
information on the application of such transfers, see the
principles discussed in Rev. Rul. 86-117, 1986-2 C.B. 157,
prior to the repeal of section 2011.
Send the following evidence to the IRS.
Line 6
To figure the tentative tax on the amount on line 5, use
Table A—Unified Rate Schedule and put the result on this
line.
Lines 4 and 7
Three worksheets are provided to help you figure the
entries for these lines. Worksheet TG—Taxable Gifts
Reconciliation allows you to reconcile the decedent’s
lifetime taxable gifts to figure totals that will be used for
the Line 4 Worksheet and the Line 7 Worksheet.
You must have all of the decedent’s gift tax returns
(Forms 709) before completing Worksheet TG—Taxable
Gifts Reconciliation. The amounts needed for Worksheet
TG can usually be found on the filed returns that were
subject to tax. However, if any of the returns were audited
by the IRS, use the amounts that were finally determined
as a result of the audits.
In addition, you must make a reasonable effort to
discover any gifts in excess of the annual exclusion made
by the decedent (or on behalf of the decedent under a
power of attorney) for which no Forms 709 were filed.
Include the value of such gifts in column b of Worksheet
TG. The annual exclusion per donee is as follows.
Period
Annual Exclusion Amount Per
Donee
1977 through 1981
$3,000
1981 through 2001
$10,000
2002 through 2005
$11,000
2006 through 2008
$12,000
2009 through 2012
$13,000
2013 through 2017
$14,000
2018 through 2021
$15,000
2022
$16,000
2023
$17,000
2024
$18,000
2025 through 2026
$19,000
1. Certificate of the proper officer of the taxing state, or
the District of Columbia, showing the following.
a. Total amount of tax imposed (before adding
interest and penalties and before allowing
discount).
b. Amount of discount allowed.
c. Amount of penalties and interest imposed or
charged.
d. Total amount actually paid in cash.
e. Date of payment.
2. Any additional proof the IRS specifically requests.
File the evidence requested above with the return,
if possible. Otherwise, send it as soon as possible
after the return is filed.
Instructions for Form 706 (Rev. 7-2026)
7
How to Complete the Line 7 Worksheet
Row (a). Beginning with the earliest year in which the
taxable gifts were made, enter the tax period of prior gifts.
If you filed returns for gifts made after 1981, enter the
calendar year in Row (a) as (YYYY). If you filed returns for
gifts made after 1976 and before 1982, enter the calendar
quarters in Row (a) as (YYYY-Q).
Row (b). Enter all taxable gifts made in the specified year.
Enter all pre-1977 gifts in the pre-1977 column.
Row (c). Enter the amount from Row (d) of the previous
column.
Row (d). Enter the sum of Row (b) and Row (c) from the
current column.
Row (e). Enter the amount from Row (f) of the previous
column.
Row (f). Enter the tax based on the amount in Row (d) of
the current column using Table A—Unified Rate Schedule.
Row (g). Subtract the amount in Row (e) from the amount
in Row (f) for the current column.
Row (h). Complete this row only if a DSUE amount was
received from predeceased spouse(s) and was applied to
lifetime gifts or if a Restored Exclusion Amount on taxable
gifts to a same-sex spouse was applied to lifetime gifts (or
both). Enter the sum of lines 2 and 3 from Schedule C on
the Form 709 filed for the year listed in Row (a) for the
amount to be entered in this row.
Row (i). Enter the applicable amount from the Table of
Basic Exclusion Amounts.
Row (j). Enter the sum of Row (h) and Row (i).
Row (k). Figure the applicable credit on the amount in
Row (j) using Table A—Unified Rate Schedule, and enter
here.
Note: The entries in each column of Row (k) must be
reduced by 20% of the amount allowed as a specific
exemption for gifts made after September 8, 1976, and
before January 1, 1977 (but no more than $6,000).
Row (l). Add the amounts in Row (l) and Row (n) from the
previous column.
Row (m). Subtract the amount in Row (l) from the amount
in Row (k) to determine the amount of any available credit.
Enter the result in Row (m).
Row (n). Enter the lesser of the amounts in Row (g) or
Row (m).
Row (o). Subtract the amount in Row (n) from the amount
in Row (g) for the current column.
Row (p). Subtract the amount in Row (o) from the amount
in Row (f) for the current column.
Row (q). Enter the Cumulative Taxable Gift amount based
on the amount in Row (p) using the Taxable Gift Amount
Table.
Row (r). If Row (o) is greater than zero in the applicable
period, subtract Row (q) from Row (d). If Row (o) is not
greater than zero, enter -0-.
Repeat for each year in which taxable gifts were
made.
Caution: Remember to submit a copy of the Line 7
Worksheet when you file Form 706. If additional space is
needed to report prior gifts, attach additional sheets.
Taxable Gift Amount Table
Column A
Column B
Column C
Column D
Amount in row (p), line 7 worksheet
over...
Amount in row (p), line 7 worksheet
not over...
Property value on amount in
column A
Rate (divisor) on excess of amount
in Column A
$0
$1,800
$0
18%
1,800
3,800
10,000
20%
3,800
8,200
20,000
22%
8,200
13,000
40,000
24%
13,000
18,200
60,000
26%
18,200
23,800
80,000
28%
23,800
38,800
100,000
30%
38,800
70,800
150,000
32%
70,800
155,800
250,000
34%
155,800
248,300
500,000
37%
248,300
345,800
750,000
39%
345,800
––––––
1,000,000
40%
8
Instructions for Form 706 (Rev. 7-2026)
Table of Basic Exclusion Amounts
Period
Basic Exclusion Amount
Credit Equivalent at 2026 Rates
1977 (Quarters 1 and 2)
$30,000
$6,000
1977 (Quarters 3 and 4)
$120,667
$30,000
1978
$134,000
$34,000
1979
$147,333
$38,000
1980
$161,563
$42,500
1981
$175,625
$47,000
1982
$225,000
$62,800
1983
$275,000
$79,300
1984
$325,000
$96,300
1985
$400,000
$121,800
1986
$500,000
$155,800
1987 through 1997
$600,000
$192,800
1998
$625,000
$202,050
1999
$650,000
$211,300
2000 and 2001
$675,000
$220,550
2002 through 2010
$1,000,000
$345,800
2011
$5,000,000
$1,945,800
2012
$5,120,000
$1,993,800
2013
$5,250,000
$2,045,800
2014
$5,340,000
$2,081,800
2015
$5,430,000
$2,117,800
2016
$5,450,000
$2,125,800
2017
$5,490,000
$2,141,800
2018
$11,180,000
$4,417,800
2019
$11,400,000
$4,505,800
2020
$11,580,000
$4,577,800
2021
$11,700,000
$4,625,800
2022
$12,060,000
$4,769,800
2023
$12,920,000
$5,113,800
2024
$13,610,000
$5,389,800
2025
$13,990,000
$5,541,800
2026
$15,000,000
$5,945,800
Instructions for Form 706 (Rev. 7-2026)
9
Note: In figuring the line 7 amount, do not include any
tax paid or payable on gifts made before 1977. The line 7
amount is a hypothetical figure used to figure the estate
tax.
Special treatment of split gifts. These special rules
apply only if:
• The decedent’s spouse predeceased the decedent;
• The decedent’s spouse made gifts that were “split”
with the decedent under the rules of section 2513;
• The decedent was the “consenting spouse” for those
split gifts, as that term is used on Form 709; and
• The split gifts were included in the decedent’s
spouse’s gross estate under section 2035.
If all four conditions above are met, do not include
these gifts on Part II, line 4 and do not include the gift
taxes payable on these gifts on Part II, line 7. These
adjustments are incorporated into the worksheets.
Lines 9a Through 9e. Applicable Credit Amount
(Formerly Unified Credit Amount)
The applicable credit amount is allowable credit against
estate and gift taxes. It is figured by determining the
tentative tax on the applicable exclusion amount, which
is the amount that can be transferred before an estate tax
liability will be incurred.
The applicable exclusion amount equals the total of
lines 9a, 9b, and 9c. See Lines 9d and 9e, applicable
exclusion and credit amount, later, for more information.
Line 9a, basic exclusion amount. In 2026, the basic
exclusion amount, as adjusted for inflation under section
2010(c)(3), is $15,000,000.
Line 9b, DSUE. If the decedent had a spouse who
died after 2010, whose estate did not use all of its
applicable exclusion against gift or estate tax liability, a
DSUE amount may be available for use by the decedent’s
estate. If the predeceased spouse died in 2011, the DSUE
amount was figured and attached to the predeceased
spouse’s Form 706. If the predeceased spouse died in
2012 or after, this amount is found in Part VI, Section C,
of the Form 706 filed by the estate of the decedent’s
predeceased spouse. The amount to be entered on
line 9b is figured in Part VI, Section D, line 4.
Line 9c, restored exclusion amount. If a decedent
made a taxable gift during the decedent’s lifetime to the
decedent’s same-sex spouse and that transfer resulted
in a reduction of the decedent’s available applicable
exclusion amount, the amount of the applicable exclusion
that was reduced can be restored. If the applicable
exclusion was previously restored on a Form 709, enter
the value on Schedule C, line 3, of Form 709. If the
applicable exclusion has not yet been previously restored,
follow the directions in the instructions for Form 709,
Schedule C, to determine the restored exclusion amount.
The restored exclusion amount is entered on line 9c.
Lines 9d and 9e, applicable exclusion and credit
amount. The total of lines 9a, 9b, and 9c is entered on
line 9d. If the amounts entered on both lines 9b and 9c are
zero, enter $5,945,800 on line 9e. Otherwise, determine
Worksheet TG—Taxable Gifts Reconciliation
Worksheet TG—Taxable Gifts Reconciliation
(To be used for lines 4 and 7 of the Tax Computation)
Gifts
made
after
June 6,
1932,
and
before
1977
a.
Calendar year or
calendar quarter
1. Total taxable
gifts made
before 1977
b.
Total taxable gifts
for period (see Note)
Note: For the definition of a taxable gift, see section 2503. Follow Form 709. That is, include
only the decedent’s one-half of split gifts, whether the gifts were made by the decedent
or the decedent’s spouse. In addition to gifts reported on Form 709, you must include any
taxable gifts in excess of the annual exclusion that were not reported on Form 709.
c.
Taxable amount
included in column
b for gifts included
in the gross estate
d.
Taxable amount included
in column b for gifts
that qualify for “special
treatment of split gifts”
described below
e.
Gift tax paid by
decedent on gifts in
column d
f.
Gift tax paid by
decedent’s spouse
on gifts in column c
Gifts
made
after
1976
2. Totals for gifts made after
1976
Line 4 Worksheet—Adjusted Taxable Gifts Made After 1976
1.
Taxable gifts made after 1976. Enter the amount from Worksheet TG, line 2, column b
2.
Taxable gifts made after 1976 reportable on Schedule G (Form 706). Enter the amount
from Worksheet TG, line 2, column c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.
3.
Taxable gifts made after 1976 that qualify for “special treatment.” Enter the amount from
Worksheet TG, line 2, column d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.
4.
Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.
5.
Adjusted taxable gifts. Subtract line 4 from line 1. Enter here and on Form 706, Part II, line 4 . . . . . . . . . . . . . . . . .
5.
10
.....................
1.
Instructions for Form 706 (Rev. 7-2026)
Line 7 Worksheet—Submit a copy with Form 706
Line 7 Worksheet, Part A—Used to determine applicable credit allowable for prior periods after 1976
(a)
Tax period1 . . . . . . . . . . . . . . . . . . . . . . . . . Pre-1977
(b)
Taxable gifts for applicable period . . . . . . . . .
(c)
Taxable gifts for prior periods2 . . . . . . . . . . . .
(d)
Cumulative taxable gifts including applicable
period (add row (b) and row (c)) . . . . . . . . . . .
(e)
Tax at date of death rates for prior gifts (from
row (c))3 . . . . . . . . . . . . . . . . . . . . . . . . . . .
(f)
Tax at date of death rates for cumulative taxable
gifts including applicable period (from row
(d)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(g)
Tax at date of death rates for gifts in applicable
period (subtract row (e) from row (f)) . . . . . . .
(h)
Total DSUE applied and restorable exclusion
amount from prior periods and applicable
period (see instructions) . . . . . . . . . . . . . . . .
(i)
Basic exclusion for applicable period (enter the
amount from the Table of Basic Exclusion
Amounts) . . . . . . . . . . . . . . . . . . . . . . . . . .
(j)
Applicable exclusion amount (add row (h) and
row (i)) . . . . . . . . . . . . . . . . . . . . . . . . . . .
(k)
Maximum applicable credit amount based on
row (j) (using Table A—Unified Rate
Schedule)4 . . . . . . . . . . . . . . . . . . . . . . . . .
(l)
Applicable credit amount used in prior periods
(add row (l) and row (n) from prior
period) . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(m)
Available credit in applicable period (subtract
row (l) from row (k)) . . . . . . . . . . . . . . . . . . .
(n)
Credit allowable (lesser of row (g) or row
(m)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(o)
Tax paid or payable at date of death rates for
applicable period (subtract row (n) from row
(g)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(p)
Tax on cumulative gifts less tax paid or payable
for applicable period (subtract row (o) from row
(f)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(q)
Cumulative taxable gifts less gifts in the
applicable period on which tax was paid or
payable based on row (p) (using the Taxable
Gift Amount Table) . . . . . . . . . . . . . . . . . . . .
(r)
Gifts in the applicable period on which tax was
payable (subtract row (q) from row (d)) . . . . . .
Line 7 Worksheet, Part B
1
Total gift taxes payable on gifts after 1976. Sum of amounts in Row (o) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Gift taxes paid by the decedent on gifts that qualify for “special treatment.” Enter the amount from Worksheet TG, line 2,
column e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Gift tax paid by decedent’s spouse on split gifts included on Schedule G (Form 706). Enter amount from Worksheet TG, line 2,
column f . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Add lines 3 and 4. Enter here and on Form 706, Part II, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
Cumulative lifetime gifts on which tax was paid or payable. Sum of amounts in Row (r). Enter here and on Form 706, Part VI,
Section C, line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Row (a): For annual returns, enter the tax period as (YYYY). For quarterly returns, enter tax period as (YYYY-Q).
Row (c): Enter amount from Row (d) of the previous column.
Row (e): Enter amount from Row (f) of the previous column.
4
Row (k): Figure the applicable credit on the amount in Row (j), using Table A—Unified Rate Schedule, and enter here. (For each column in Row (k), subtract 20% of any
amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977.)
1
2
3
the applicable credit on the amount on line 9d by using
Table A—Unified Rate Schedule and enter the result on
line 9e.
Line 10. Adjustment to Applicable Credit
If the decedent made gifts (including gifts made by the
decedent’s spouse and treated as made by the decedent
by reason of gift splitting) after September 8, 1976, and
before January 1, 1977, for which the decedent claimed
a specific exemption, the applicable credit amount on
this estate tax return must be reduced. The reduction is
Instructions for Form 706 (Rev. 7-2026)
figured by entering 20% of the specific exemption claimed
for these gifts.
Note: The specific exemption was allowed by section
2521 for gifts made before January 1, 1977.
If the decedent did not make any gifts between
September 8, 1976, and January 1, 1977, or if the
decedent made gifts during that period but did not claim
the specific exemption, enter zero.
11
Line 13
Frequently asked questions on estate taxes for more
detailed information.
Line 14
Note: The IRS uses the latest encryption technology to
ensure that electronic payments you make are safe and
secure. Paying electronically is quick and easy.
Line 15
EFTPS. Payment of the tax due may be submitted
electronically through Electronic Federal Tax Payment
System (EFTPS). EFTPS is a free service of the
Department of the Treasury. See IRS.gov/EFTPS and
EFTPS.gov for more information.
Enter the total credit for foreign death taxes from
Schedule P (Form 706), line 11. Attach Form(s) 706-CE.
Enter the total credit for tax on prior transfers from
Schedule Q (Form 706), line 6.
Enter the credit taken for federal gift taxes imposed by
chapter 12 of the Code, and the corresponding provisions
of prior laws, on certain transfers the decedent made
before January 1, 1977, that are included in the gross
estate. The credit cannot be more than the amount figured
by the following formula.
Gross estate tax minus (the sum of the state
death taxes and unified credit)
Value of gross estate minus (the sum of the
deductions for charitable, public, and similar
gifts and bequests and marital deduction)
x
Value of
included
gift
For more information, see the regulations under section
2012. This computation may be made using Form
4808. Attach a copy of a completed Form 4808 or the
computation of the credit. Also, attach all available copies
of Forms 709 filed by the decedent, with “Exhibit to Estate
Tax Return” entered across the top of the first page of
each, to help verify the amounts entered on lines 4 and 7,
and the amount of credit taken (on line 15) for pre-1977
federal gift taxes.
Line 16
Enter the Canadian marital credit.
A nonrefundable marital credit may be allowed if the
executor elects this treaty benefit and waives the benefit of
any estate tax marital deduction allowable under U.S. law.
The credit amount is generally limited to the lesser of:
• The unified credit allowed to the estate (before
reduction for any gift tax unified credit), or
• The amount of estate tax that would otherwise be
imposed by the United States on the transfer of
qualifying property to the surviving spouse.
Also, attach a statement to the return that refers to the
treaty, waives qualifying domestic trust (QDOT) rights, and
shows the computation of the marital credit. See the 1995
Canadian income tax treaty protocol for details on figuring
the credit.
Line 22. Tax Due
The estate and GST taxes are due within 9 months of the
date of the decedent’s death, unless an extension of time
to pay was granted.
Making a Payment
The IRS recommends paying electronically whenever
possible. Options to pay electronically include any of
the payment options below. Payments of U.S. tax must
be remitted to the IRS in U.S. dollars. Digital assets
are not accepted. Also, go to IRS.gov/Payments and
12
Same-day wire. Payment of the tax due shown on Form
706 may be submitted electronically through same-day
wire from your financial institution. Contact your financial
institution for availability, cost, and time frames. See
IRS.gov/SameDayWire and How do I make an electronic
payment under Frequently asked questions on estate
taxes, on IRS.gov for the worksheet and more information.
Paying by check. Make the check payable to “United
States Treasury.” Write the decedent’s name, SSN (or TIN,
if applicable), and “Form 706” on the check to assist us in
posting it to the proper account. See IRS.gov/PayByMail
for more information.
Paying by cash. You may be able to pay your balance
due with cash at participating retail stores. See IRS.gov/
PayCash for more information.
Line 23. Overpayment
If you have access to U.S. banking services, you should
use direct deposit for any refunds, whenever possible.
See IRS.gov/ModernPayments and IRS.gov/DirectDeposit
for more information.
Direct deposit is available for this form. If there is
an overpayment when filing your return, complete Part
II, lines 23b, 23c, and 23d to input your direct deposit
information.
Line 23a
If line 23a is under $1, we will send a refund only on
written request.
Line 23b
The routing number must be nine digits. The first two
digits must be 01 through 12 or 21 through 32. Ask your
financial institution for the correct routing number to enter
on line 23b if:
• The routing number on a deposit slip is different from
the routing number on your checks,
• Your deposit is to a savings account that doesn’t allow
you to write checks, or
• Your checks state they are payable through a financial
institution different from the one at which you have
your checking account.
Line 23c
Check the appropriate box for the type of account. Don’t
check more than one box. You must check the correct box
to ensure your deposit is accepted.
Instructions for Form 706 (Rev. 7-2026)
Line 23d
The account number can be up to 17 characters (both
numbers and letters). Include hyphens but omit spaces
and special symbols. Enter the number from left to right
and leave any unused boxes blank. Don’t include the
check number.
Signature(s)
Form 706 must be signed. The executor who files the
return must, in every case, sign the declaration under
penalties of perjury. The executor may use Form 2848 to
authorize another person to act for the executor before the
IRS. See Representation Authorization, earlier, and the
Instructions for Form 2848, for more information
Caution: If there is more than one executor, all listed
executors are responsible for the return as filed and are
liable for penalties imposed for erroneous or false returns.
However, it is sufficient for only one of the co-executors to
sign the return.
Paid Preparer Use Only
Generally, anyone who is paid to prepare the return must
sign the return in the space provided and fill in the Paid
Preparer Use Only area. See section 7701(a)(36)(B) for
exceptions.
In addition to signing and completing the required
information, the paid preparer must give a copy of the
completed return to the executor.
Note: A paid preparer may sign original or supplemental
returns by rubber stamp, mechanical device, or computer
software program.
Part III—Elections by the Executor
Note: The election to allow the decedent’s surviving
spouse to use the decedent’s unused exclusion amount
is made by filing a timely and complete Form 706. See the
instructions for Part VI, later, and sections 2010(c)(4) and
(c)(5).
Line 1. Alternate Valuation
Tip: See the example showing the use of Schedule B
(Form 706) where the alternate valuation is adopted, later.
Unless you elect at the time the return is filed to adopt
alternate valuation, as authorized by section 2032, value
all property included in the gross estate as of the date
of the decedent’s death. Alternate valuation cannot be
applied to only a part of the property.
You may elect special-use valuation (line 2) in addition
to alternate valuation.
You may not elect alternate valuation unless the
election will decrease both the value of the gross estate
and the sum (reduced by allowable credits) of the estate
and GST taxes payable by reason of the decedent’s death
for the property includible in the decedent’s gross estate.
Elect alternate valuation by checking “Yes” on line 1
and filing Form 706. You may make a protective alternate
valuation election by checking “Yes” on line 1, writing the
word “protective,” and filing Form 706 using regular values.
Instructions for Form 706 (Rev. 7-2026)
Once made, the election may not be revoked. The
election may be made on a late-filed Form 706, provided
it is not filed later than 1 year after the due date (including
extensions actually granted). Relief under Regulations
sections 301.9100-1 and 301.9100-3 may be available
to make an alternate valuation election or a protective
alternate valuation election, provided a Form 706 is filed
no later than 1 year after the due date of the return
(including extensions actually granted).
If alternate valuation is elected, value the property
included in the gross estate as of the following dates, as
applicable.
• Any property distributed, sold, exchanged, or
otherwise disposed of or separated or passed from
the gross estate by any method within 6 months
after the decedent’s death is valued on the date
of distribution, sale, exchange, or other disposition.
Value this property on the date it ceases to be a part
of the gross estate; for example, on the date the title
passes as the result of its sale, exchange, or other
disposition.
• Any property not distributed, sold, exchanged, or
otherwise disposed of within the 6-month period is
valued as of 6 months after the date of the decedent’s
death.
• Any property, interest, or estate that is affected by
mere lapse of time is valued as of the date of the
decedent’s death or on the date of its distribution,
sale, exchange, or other disposition, whichever occurs
first. However, you may change the date of death
value to account for any change in value that is not
due to a “mere lapse of time” on the date of its
distribution, sale, exchange, or other disposition.
The property included in the alternate valuation and
valued as of 6 months after the date of the decedent’s
death, or as of some intermediate date (as described
above), is the property included in the gross estate on
the date of the decedent’s death. Therefore, you must first
determine what property was part of the gross estate at
the decedent’s death.
Interest. Interest accrued to the date of the decedent’s
death on bonds, notes, and other interest-bearing
obligations is property of the gross estate on the date of
death and is included in the alternate valuation.
Rent. Rent accrued to the date of the decedent’s death
on leased real or personal property is property of the
gross estate on the date of death and is included in the
alternate valuation.
Dividends. Outstanding dividends that were declared
to stockholders of record on or before the date of
the decedent’s death are considered property of the
gross estate on the date of death and are included in
the alternate valuation. Ordinary dividends declared to
stockholders of record after the date of the decedent’s
death are not included in the gross estate on the date of
death and are not eligible for alternate valuation. However,
if dividends are declared to stockholders of record after
the date of the decedent’s death so that the shares
of stock at the later valuation date do not reasonably
represent the same property at the date of the decedent’s
death, include those dividends (except dividends paid
13
from earnings of the corporation after the date of the
decedent’s death) in the alternate valuation.
On Schedules A through I of Form 706, you must show
the following.
1. What property is included in the gross estate on the
date of the decedent’s death.
2. What property was distributed, sold, exchanged, or
otherwise disposed of within the 6-month period
after the decedent’s death, and the dates of these
distributions, etc. (These two items should be entered
in the “Description” column of each schedule. Briefly
explain the status or disposition governing the
alternate valuation date, such as “Not disposed
of within 6 months following death,” “Distributed,”
“Sold,” “Bond paid on maturity,” etc. In this same
column, describe each item of principal and includible
income.)
3. The date of death value, entered in the appropriate
value column with items of principal and includible
income shown separately.
4. The alternate value, entered in the appropriate value
column with items of principal and includible income
shown separately. (In the case of any interest or
estate, the value of which is affected by lapse of
time, such as patents, leaseholds, estates for the life
of another, or remainder interests, the value shown
under the heading “Alternate value” must be the
adjusted value, for example, the value as of the date
of death with an adjustment reflecting any difference
in its value as of the later date not due to lapse of
time.)
Note: If any property on Schedules A through I of Form
706 is being valued pursuant to the special rule of
Regulations section 20.2010-2(a)(7)(ii), values for those
assets are not required to be reported on the schedule.
See Part V, Item 10, later.
Distributions, sales, exchanges, and other dispositions
of the property within the 6-month period after the
decedent’s death must be supported by evidence. If the
court issued an order of distribution during that period,
you must submit a certified copy of the order as part of the
evidence. The IRS may require you to submit additional
evidence, if necessary.
If the alternate valuation method is used, the values
of life estates, remainders, and similar interests are
figured using the age of the recipient on the date of the
decedent’s death and the value of the property on the
alternate valuation date.
Line 2. Special-Use Valuation of Section 2032A
In general. Under section 2032A, you may elect to value
certain farm and closely held business real property at
its farm or business use value rather than its FMV. Both
special-use valuation and alternate valuation may be
elected.
To elect special-use valuation, check “Yes” on line 2
and complete and attach Schedule T (Form 706) and its
required additional statements. You must file Schedule T
(Form 706) and its required attachments with Form 706 for
14
this election to be valid. You may make the election on a
late-filed return so long as it’s the first return filed.
The total value of the property valued under section
2032A may not be decreased from FMV by more than
$1,460,000 for decedents dying in 2026.
Real property may qualify for the section 2032A
election if:
1. The decedent was a U.S. citizen or resident at the
time of death;
2. The real property is located in the United States;
3. At the decedent’s death, the real property was used
by the decedent or a family member for farming or in
a trade or business, or was rented for such use by
either the surviving spouse or a lineal descendant of
the decedent to a family member on a net cash basis;
4. The real property was acquired from or passed from
the decedent to a qualified heir of the decedent;
5. The real property was owned and used in a qualified
manner by the decedent or a member of the
decedent’s family during 5 of the 8 years before the
decedent’s death;
6. There was material participation by the decedent or
a member of the decedent’s family during 5 of the 8
years before the decedent’s death; and
7. The property meets the following percentage
requirements.
a. At least 50% of the adjusted value of the gross
estate must consist of the adjusted value of real
or personal property that was being used as a
farm or in a closely held business and that was
acquired from, or passed from, the decedent to a
qualified heir of the decedent.
b. At least 25% of the adjusted value of the
gross estate must consist of the adjusted value
of qualified farm or closely held business real
property.
For this purpose, adjusted value is the value of property
determined without regard to its special-use value. The
value is reduced for unpaid mortgages on the property
or any indebtedness against the property, if the full value
of the decedent’s interest in the property (not reduced by
such mortgage or indebtedness) is included in the value
of the gross estate. The adjusted value of the qualified real
and personal property used in different businesses may
be combined to meet the 50% and 25% requirements.
Qualified Real Property
Qualified use. Qualified use means use of the property
as a farm for farming purposes or in a trade or business
other than farming. Trade or business applies only to the
active conduct of a business. It does not apply to passive
investment activities or the mere passive rental of property
to a person other than a member of the decedent’s family.
Also, no trade or business is present in the case of
activities not engaged in for profit.
Ownership. To qualify as special-use property, the
decedent or a member of the decedent’s family must have
Instructions for Form 706 (Rev. 7-2026)
owned and used the property in a qualified use for 5 of the
last 8 years before the decedent’s death. Ownership may
be direct or indirect through a corporation, a partnership,
or a trust.
If the ownership is indirect, the business must qualify
as a closely held business under section 6166. The
indirect ownership, when combined with periods of direct
ownership, must meet the requirements of section 6166
on the date of the decedent’s death and for a period of
time that equals at least 5 of the 8 years preceding death.
Directly owned property leased by the decedent to a
separate closely held business is considered qualified real
property if the business entity to which it was rented was
a closely held business (as defined by section 6166) for
the decedent on the date of the decedent’s death and for
sufficient time to meet the “5 in 8 years” test explained
above.
Structures and other real property improvements.
Qualified real property includes residential buildings and
other structures and real property improvements regularly
occupied or used by the owner or lessee of real property
(or by the employees of the owner or lessee) to operate
a farm or other closely held business. A farm residence
that the decedent occupied is considered to have been
occupied for the purpose of operating the farm even when
a family member and not the decedent was the person
materially participating in the operation of the farm.
Qualified real property also includes roads, buildings,
and other structures and improvements functionally
related to the qualified use.
Elements of value such as mineral rights that are not
related to the farm or business use are not eligible for
special-use valuation.
Property acquired from the decedent. Property is
considered to have been acquired from or to have passed
from the decedent if one of the following applies.
• The property is considered to have been acquired
from or to have passed from the decedent under
section 1014(b) (relating to basis of property acquired
from a decedent).
• The property is acquired by any person from the
estate.
• The property is acquired by any person from a trust, to
the extent the property is includible in the gross estate.
Qualified heir. A person is a qualified heir of property
if the person is a member of the decedent’s family and
acquired or received the property from the decedent. If
a qualified heir disposes of any interest in qualified real
property to any member of the qualified heir’s family, that
person will then be treated as the qualified heir for that
interest.
A member of the family includes only:
• An ancestor (parent, grandparent, etc.) of the
individual;
• The spouse of the individual;
• The lineal descendant (child, stepchild, grandchild,
etc.) of the individual, the individual’s spouse, or a
parent of the individual; or
• The spouse or surviving spouse of any lineal
descendant described above.
Instructions for Form 706 (Rev. 7-2026)
Note: A legally adopted child of an individual is treated as
a child of that individual by blood.
Material Participation
To elect special-use valuation, either the decedent or a
member of the decedent’s family must have materially
participated in the operation of the farm or other business
for at least 5 of the 8 years ending on the date of the
decedent’s death. The existence of material participation
is a factual determination. Passively collecting rents,
salaries, draws, dividends, or other income from the farm
or other business is not sufficient for material participation,
nor is merely advancing capital and reviewing a crop plan
and financial reports each season or business year.
In determining whether the required participation has
occurred, disregard brief periods (that is, 30 days or less)
during which there was no material participation, as long
as such periods were both preceded and followed by
substantial periods (more than 120 days) during which
there was uninterrupted material participation.
Retirement or disability. If, on the date of death,
the time period for material participation could not be
met because the decedent was retired or disabled, a
substitute period may apply. The decedent must have
retired on social security or been disabled for a continuous
period ending with death. A person is disabled for this
purpose if the person was mentally or physically unable to
materially participate in the operation of the farm or other
business.
The substitute time period for material participation for
these decedents is a period totaling at least 5 years out of
the 8-year period that ended on the earlier of:
• The date the decedent began receiving social security
benefits, or
• The date the decedent became disabled.
Surviving spouse. A surviving spouse who received
qualified real property from the predeceased spouse is
considered to have materially participated if the surviving
spouse was engaged in the active management of the
farm or other business. If the surviving spouse died within
8 years of the first spouse’s death, you may add the period
of material participation of the predeceased spouse to
the period of active management by the surviving spouse
to determine if the surviving spouse’s estate qualifies
for special-use valuation. To qualify for this, the property
must have been eligible for special-use valuation in the
predeceased spouse’s estate, though it does not have to
have been elected by that estate.
For additional details regarding material participation,
see Regulations section 20.2032A-3(e).
Valuation Methods
The primary method of valuing special-use property that
is used for farming purposes is the annual gross cash
rental method. If comparable gross cash rentals are not
available, you can substitute comparable average annual
net share rentals. If neither of these is available, or if you
so elect, you can use the method for valuing real property
in a closely held business.
15
Average annual gross cash rental. Generally, the
special-use value of property that is used for farming
purposes is determined as follows.
1. Subtract the average annual state and local real
estate taxes on actual tracts of comparable real
property from the average annual gross cash rental
for that same comparable property.
2. Divide the result in (1) by the average annual effective
interest rate charged for all new federal land bank
loans. See Effective interest rate, later.
The computation of each average annual amount is
based on the 5 most recent calendar years ending before
the date of the decedent’s death.
Gross cash rental. Generally, gross cash rental is the
total amount of cash received in a calendar year for the
use of actual tracts of comparable farm real property in the
same locality as the property being specially valued. You
may not use:
• Appraisals or other statements regarding rental value
or areawide averages of rentals,
• Rents paid wholly or partly in-kind, or
• Property for which the amount of rent is based on
production.
The rental must have resulted from an arm’s-length
transaction and the amount of rent may not be reduced
by the amount of any expenses or liabilities associated
with the farm operation or the lease.
Comparable property. Comparable property must be
situated in the same locality as the qualified real property
as determined by generally accepted real property
valuation rules. The determination of comparability is
based on a number of factors, none of which carries
more weight than the others. It is often necessary to value
land in segments where there are different uses or land
characteristics included in the specially valued land.
The following list contains some of the factors
considered in determining comparability.
• Similarity of soil.
• Whether the crops grown would deplete the soil in a
similar manner.
• Types of soil conservation techniques that have been
practiced on the two properties.
• Whether the two properties are subject to flooding.
• Slope of the land.
• For livestock operations, the carrying capacity of the
land.
• For timbered land, whether the timber is comparable.
• Whether the property as a whole is unified or
segmented. If segmented, the availability of the
means necessary for movement among the different
sections.
• Number, types, and conditions of all buildings and
other fixed improvements located on the properties
and their location as it affects efficient management,
use, and value of the property.
• Availability and type of transportation facilities in terms
of costs and of proximity of the properties to local
markets.
You must specifically identify on the return the property
being used as comparable property. Use the type of
16
descriptions used to list real property on Schedule A
(Form 706).
Effective interest rate. See Tables 1 and 2 of Rev.
Rul. 2026-14, 2026-35 I.R.B. 181, available at IRS.gov/irb/
2026-35_IRB, for the average annual effective interest
rates in effect for 2026.
Net share rental. You may use average annual net
share rental from comparable land only if there is
no comparable land from which average annual gross
cash rental can be determined. Net share rental is the
difference between the gross value of produce received
by the lessor from the comparable land and the cash
operating expenses (other than real estate taxes) of
growing the produce that, under the lease, are paid
by the lessor. The production of the produce must be
the business purpose of the farming operation. For this
purpose, produce includes livestock.
The gross value of the produce is generally the gross
amount received if the produce was disposed of in an
arm’s-length transaction within the period established
by the Department of Agriculture for its price support
program. Otherwise, the value is the weighted average
price for which the produce sold on the closest national
or regional commodities market. The value is figured
for the date or dates on which the lessor received (or
constructively received) the produce.
Valuing a real property interest in a closely held
business. Use this method to determine the special-use
valuation for qualifying real property used in a trade
or business other than farming. You may also use
this method for qualifying farm property if there is no
comparable land or if you elect to use it. Under this
method, the following factors are considered.
• The capitalization of income that the property can
be expected to yield for farming or for closely held
business purposes over a reasonable period of time
with prudent management and traditional cropping
patterns for the area, taking into account soil capacity,
terrain configuration, and similar factors.
• The capitalization of the fair rental value of the land for
farming or for closely held business purposes.
• The assessed land values in a state that provides a
differential or use value assessment law for farmland
or closely held business.
• Comparable sales of other farm or closely held
business land in the same geographical area far
enough removed from a metropolitan or resort area
so that nonagricultural use is not a significant factor in
the sales price.
• Any other factor that fairly values the farm or closely
held business value of the property.
Making the Election
Include the words “Section 2032A valuation” in the
“Description” column of any Form 706 schedule if section
2032A property is included in the decedent’s gross estate.
An election under section 2032A need not include all
the property in an estate that is eligible for special-use
valuation, but sufficient property to satisfy the threshold
requirements of section 2032A(b)(1)(B) must be specially
valued under the election.
Instructions for Form 706 (Rev. 7-2026)
If joint or undivided interests (that is, interests as joint
tenants or tenants in common) in the same property are
received from a decedent by qualified heirs, an election
for one heir’s joint or undivided interest need not include
any other heir’s interest in the same property if the electing
heir’s interest plus other property to be specially valued
satisfies the requirements of section 2032A(b)(1)(B).
If successive interests (that is, life estates and
remainder interests) are created by a decedent in
otherwise qualified property, an election under section
2032A is available only for that property (or part) in
which qualified heirs of the decedent receive all of the
successive interests, and such an election must include
the interests of all of those heirs.
For example, if a surviving spouse receives a life
estate in otherwise qualified property and the spouse’s
sibling receives a remainder interest in fee, no part of the
property may be valued under a section 2032A election.
Where successive interests in specially valued property
are created, remainder interests are treated as being
received by qualified heirs only if the remainder interests
are not contingent on surviving a nonfamily member or are
not subject to divestment in favor of a nonfamily member.
Protective Election
You may make a protective election to specially value
qualified real property. Under this election, whether
or not you may ultimately use special-use valuation
depends upon final values (as shown on the return
determined following examination of the return) meeting
the requirements of section 2032A.
To make a protective election, check “Yes” on line 2
and complete Schedule T (Form 706) according to the
instructions for Protective election, later.
If you make a protective election, complete the initial
Form 706 by valuing all property at its FMV. Do not use
special-use valuation. Usually, this will result in higher
estate and GST tax liabilities than will be ultimately
determined if special-use valuation is allowed. The
protective election does not extend the time to pay the
taxes shown on the return. If you wish to extend the time
to pay the taxes, file Form 4768 in adequate time before
the due date of the return. See the Instructions for Form
4768.
If the estate qualifies for special-use valuation based
on the values as finally determined, you must file
a supplemental Form 706 (with a complete section
2032A election) within 60 days after the date of this
determination. Prepare the supplemental return using
special-use values under the rules of section 2032A,
complete Schedule T (Form 706), and attach all of the
required statements.
Additional Information
For definitions and additional information, see section
2032A and the related regulations.
Instructions for Form 706 (Rev. 7-2026)
Line 3. Section 6166 Installment Payments
If the gross estate includes an interest in a closely held
business, you may be able to elect to pay part of the
estate tax in installments under section 6166.
The maximum amount that can be paid in installments
is that part of the estate tax that is attributable to the
closely held business; see Determine how much of the
estate tax may be paid in installments under section 6166,
later. In general, that amount is the amount of tax that
bears the same ratio to the total estate tax that the value
of the closely held business included in the gross estate
bears to the adjusted gross estate.
Bond or lien. The IRS may require that an estate furnish
a surety bond when granting the installment payment
election. In the alternative, the executor may consent to
elect the special lien provisions of section 6324A in lieu of
the bond. The IRS will contact you regarding the specifics
of furnishing the bond or electing the special lien. The IRS
will make this determination on a case-by-case basis, and
you may be asked to provide additional information.
If you elect the lien provisions, section 6324A requires
that the lien be placed on property having a value equal to
the total deferred tax plus 4 years of interest. The property
must be expected to survive the deferral period, and
does not necessarily have to be property of the estate.
In addition, all people with an interest in the designated
property must consent to the creation of this lien.
Percentage requirements. To qualify for installment
payments, the value of the interest in the closely held
business that is included in the gross estate must
be more than 35% of the adjusted gross estate (the
gross estate less expenses, indebtedness, taxes, and
losses—Schedules J, K, and L of Form 706 (do not
include any portion of the state death tax deduction)).
Interests in two or more closely held businesses are
treated as an interest in a single business if at least 20%
of the total value of each business is included in the gross
estate. For this purpose, include any interest held by the
surviving spouse that represents the surviving spouse’s
interest in a business held jointly with the decedent as
community property or as joint tenants, tenants by the
entirety, or tenants in common.
Value. The value used for meeting the percentage
requirements is the same value used for determining the
gross estate. Therefore, if the estate is valued under
alternate valuation or special-use valuation, you must use
those values to meet the percentage requirements.
Transfers before death. Generally, gifts made before
death are not included in the gross estate. However, the
estate must meet the 35% requirement by both including
in and excluding from the gross estate any gifts made by
the decedent in the 3-year period ending on the date of
death.
Passive assets. In determining the value of a closely
held business and whether the 35% requirement is met,
do not include the value of any passive assets held by
the business. A passive asset is any asset not used in
carrying on a trade or business. Any asset used in a
qualifying lending and financing business is treated as an
asset used in carrying on a trade or business; see section
6166(b)(10) for details. Stock in another corporation is
17
Line 3 Worksheet—Adjusted Gross Estate
1.
2.
3.
4.
5.
6.
Enter the value of the decedent’s interest in closely held business(es) included in the gross estate (less value
of passive assets, as mentioned in section 6166(b)(9)) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Enter the value of the gross estate (Form 706, Part V, item 13) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add items 18, 19, and 20 from Form 706, Part V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subtract line 3 from line 2 to figure the adjusted gross estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divide line 1 by line 4 to figure the value the business interest bears to the value of the adjusted gross estate.
For purposes of this calculation, carry the decimal to the sixth place; the IRS will make this adjustment for
purposes of determining the correct amount. If this amount is less than 0.350000, the estate does not qualify
to make the election under section 6166 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Multiply line 5 by the amount on line 18 of Form 706, Part II. This is the maximum amount of estate tax that
may be paid in installments under section 6166. (Certain GST taxes may be deferred as well; see section
6166(i) for more information.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
a passive asset unless the stock is treated as held by
the decedent because of the election to treat holding
company stock as business company stock; see Holding
company stock, later.
If a corporation owns at least 20% in value of the voting
stock of another corporation, or the other corporation had
no more than 45 shareholders and at least 80% of the
value of the assets of each corporation is attributable to
assets used in carrying on a trade or business, then these
corporations will be treated as a single corporation and
the stock will not be treated as a passive asset. Stock
held in the other corporation is not taken into account in
determining the 80% requirement.
Interest in a closely held business. For purposes of
the installment payment election, an interest in a closely
held business means:
• Ownership of a trade or business carried on as a
proprietorship;
• An interest as a partner in a partnership carrying
on a trade or business, if 20% or more of the total
capital interest was included in the gross estate of
the decedent or the partnership had no more than 45
partners; or
• Stock in a corporation carrying on a trade or business,
if 20% or more in value of the voting stock of the
corporation is included in the gross estate of the
decedent or the corporation had no more than 45
shareholders.
The partnership or corporation must be carrying on a
trade or business at the time of the decedent’s death.
For further information on whether certain partnerships
or corporations owning real property interests constitute
a closely held business, see Rev. Rul. 2006-34, 2006-26
I.R.B. 1171, available at Rev. Rul. 2006-34.
In determining the number of partners or shareholders,
a partnership or stock interest is treated as owned by
one partner or shareholder if it is community property or
held by spouses as joint tenants, tenants in common, or
tenants by the entirety.
Property owned directly or indirectly by or for a
corporation, partnership, estate, or trust is treated as
owned proportionately by or for its shareholders, partners,
or beneficiaries. For trusts, only beneficiaries with present
interests are considered.
The interest in a closely held farm business includes
the interest in the residential buildings and related
18
improvements occupied regularly by the owners, lessees,
and employees operating the farm.
Holding company stock. The executor may elect to
treat as business company stock the portion of any
holding company stock that represents direct ownership
(or indirect ownership through one or more other holding
companies) in a business company. A holding company
is a corporation holding stock in another corporation. A
business company is a corporation carrying on a trade or
business.
In general, this election applies only to stock that is
not readily tradable. However, the election can be made
if the business company stock is readily tradable, as long
as all of the stock of each holding company is not readily
tradable.
For purposes of the 20%-voting-stock requirement,
stock is treated as voting stock to the extent the holding
company owns voting stock in the business company.
If the executor makes this election, the first installment
payment is due when the estate tax return is filed. The
5-year deferral for payment of the tax, as discussed later
under Time for payment, does not apply. In addition,
the 2% interest rate, discussed later under Interest
computation, will not apply. Also, if the business company
stock is readily tradable, as explained above, the tax must
be paid in five installments.
Determine how much of the estate tax may
be paid in installments under section 6166. To
determine whether the election may be made, you
must figure the adjusted gross estate. (See the Line 3
Worksheet—Adjusted Gross Estate.) To determine the
value of the adjusted gross estate, subtract the deductions
(Schedules J, K, and L of Form 706) from the value of the
gross estate.
To determine over how many installments the estate tax
may be paid, refer to sections 6166(a), (b)(7), (b)(8), and
(b)(10).
Time for payment. Under the installment method, the
executor may elect to defer payment of the qualified estate
tax, but not interest, for up to 5 years from the original
payment due date. After the first installment of tax is paid,
you must pay the remaining installments annually by the
date 1 year after the due date of the preceding installment.
There can be no more than 10 installment payments.
Interest on the unpaid portion of the tax is not deferred
and must be paid annually. Interest must be paid at the
Instructions for Form 706 (Rev. 7-2026)
same time as and as a part of each installment payment of
the tax.
Acceleration of payments. If the estate fails to make
payments of tax or interest within 6 months of the due
date, the IRS may terminate the right to make installment
payments and force an acceleration of payment of the tax
upon notice and demand. Upon notice and demand, a
penalty will be imposed for an amount that is 5% of the
payment multiplied by the number of months (or fractions
thereof) after the due date and before the payment is
made.
Generally, if any portion of the interest in the closely
held business that qualifies for installment payments is
distributed, sold, exchanged, or otherwise disposed of, or
money and other property attributable to such an interest
is withdrawn, and the aggregate of those events equals
or exceeds 50% of the value of the interest, then the right
to make installment payments will be terminated, and the
unpaid portion of the tax will be due upon notice and
demand. See section 6166(g)(1)(A).
Interest computation. A special interest rate applies to
installment payments. For decedents dying in 2025, the
interest rate is 2% on the lesser of:
• $776,000, or
• The amount of the estate tax that is attributable
to the closely held business and that is payable in
installments.
2% portion. The 2% portion is an amount equal to
the amount of the tentative estate tax (on $1 million
plus the applicable exclusion amount in effect) minus the
applicable credit amount in effect. However, if the amount
of estate tax extended under section 6166 is less than
the amount figured above, the 2% portion is the lesser
amount.
Inflation adjustment. The $1 million amount used to
figure the 2% portion is indexed for inflation for the estates
of decedents who died in a calendar year after 1998.
For an estate of a decedent who died in 2026, the
dollar amount used to determine the “2% portion” of the
estate tax payable in installments under section 6166 is
$1,940,000.
Computation. Interest on the portion of the tax in
excess of the 2% portion is figured at 45% of the annual
rate of interest on underpayments. This rate is based on
the federal short-term rate and is announced quarterly by
the IRS in the Internal Revenue Bulletin.
If you elect installment payments and the estate tax
due is more than the maximum amount to which the 2%
interest rate applies, each installment payment is deemed
to comprise both tax subject to the 2% interest rate and
tax subject to 45% of the regular underpayment rate. The
amount of each installment that is subject to the 2% rate
is the same as the percentage of total tax payable in
installments that is subject to the 2% rate.
Caution: The interest paid on installment payments is not
deductible as an administrative expense of the estate.
Making the election. If you check this line to make
a final election, you must attach the notice of election
described in Regulations section 20.6166-1(b). If you
check this line to make a protective election, you must
Instructions for Form 706 (Rev. 7-2026)
attach a notice of protective election as described in
Regulations section 20.6166-1(d). Regulations section
20.6166-1(b) requires that the notice of election is made
by attaching to a timely filed estate tax return the following
information.
• The decedent’s name and taxpayer identification
number (TIN) as they appear on the estate tax return.
• The amount of tax that is to be paid in installments.
• The date selected for payment of the first installment.
• The number of annual installments, including first
installment, in which the tax is to be paid.
• The properties shown on the estate tax return that
are the closely held business interest (identified by
schedule, line number, and item number).
• The facts that formed the basis for the executor’s
conclusion that the estate qualifies for payment of the
estate tax in installments.
You may also elect to pay certain GST taxes in
installments. See section 6166(i).
Line 4. Reversionary or Remainder Interests
For details of this election, see section 6163 and the
related regulations.
Part IV—General Information
Line 3a
Check the applicable box for the marital status of the
decedent at the time of death. If the decedent was married
at the time of death, complete line 4.
Line 3b
If the decedent had one or more prior marriages, complete
line 3b by providing the following information for each
former spouse.
• Name of former spouse in column (i).
• SSN of former spouse in column (ii).
• Date the marriage ended in column (iii).
• Whether the marriage ended by annulment, divorce
decree, or death of spouse. Check only one box in
column (iv).
If the prior marriage ended in death and the
predeceased spouse died after December 31, 2010,
complete Part VI, Section D, if the estate of the
predeceased spouse elected to allow the decedent to use
any unused exclusion amount. For more information, see
section 2010(c)(4) and related regulations.
Line 4
Complete line 4 whether or not there is a surviving spouse
and whether or not the surviving spouse received any
benefits from the estate. If there was no surviving spouse
on the date of the decedent’s death, enter “None” on
line 4a and leave lines 4b and 4c blank. The value entered
on line 4c need not be exact. See Column (iv), Amount
received, under line 5a, later.
Note: Do not include any DSUE amount transferred to the
surviving spouse in the total entered on line 4c.
19
Line 5a
Section 2044 property is property for which a previous
section 2056(b)(7) election (QTIP election) has been
made, or for which a similar gift tax election (section 2523)
has been made. For more information, see the instructions
for Schedule F (Form 706), later.
Column (i), Name. Enter the name of each individual,
trust, or estate that received (or will receive) benefits
of $5,000 or more from the estate directly as an
heir, next-of-kin, devisee, or legatee; or indirectly (for
example, as beneficiary of an annuity or insurance policy,
shareholder of a corporation, or partner of a partnership
that is an heir, etc.).
Line 9. Insurance Not Included in the Gross
Estate
Enter individuals (other than the surviving spouse), trusts,
or other estates who receive benefits from the estate. Do
not include charitable beneficiaries shown in Schedule O
(Form 706). Attach additional statements if necessary.
Column (ii), Identifying number. Enter the SSN of each
individual beneficiary listed. If the number is unknown,
or the individual has no number, indicate “unknown” or
“none.” For trusts and other estates, enter the employer
identification number (EIN).
Column (iii), Relationship to decedent. For each
individual beneficiary, enter the relationship (if known) to
the decedent by reason of blood, marriage, or adoption.
For trust or estate beneficiaries, indicate “TRUST” or
“ESTATE.”
Column (iv), Amount received. Enter the amount
actually distributed (or to be distributed) to each
beneficiary including transfers during the decedent’s life
from Schedule G (Form 706) required to be included in
the gross estate. The value to be entered need not be
exact. A reasonable estimate is sufficient. For example,
where precise values cannot readily be determined, as
with certain future interests, a reasonable approximation
should be entered. The total of these distributions
should approximate the amount of gross estate reduced
by funeral and administrative expenses, debts and
mortgages, bequests to surviving spouse, charitable
bequests, and any federal and state estate and GST taxes
paid (or payable) relating to the benefits received by the
beneficiaries listed on lines 4 and 5.
Line 5c
All distributions of less than $5,000 to specific
beneficiaries may be included with distributions to
unascertainable beneficiaries on line 5c.
Line 6. Protective Claim for Refund
If you answered “Yes,” complete Schedule PC (Form 706)
for each claim.
A protective claim for refund may be filed when there
is an unresolved claim or expense that will not be
deductible under section 2053 before the expiration of
the period of limitation under section 6511(a). To preserve
the estate’s right to a refund once the claim or expense
has been finally determined, the protective claim must be
filed before the end of the limitations period. For more
information on how to file a protective claim for refund with
this Form 706, see the instructions for Schedule PC (Form
706), later.
Line 7. Section 2044 Property
If you answered “Yes,” these assets must be shown on
Schedule F (Form 706).
20
If you answered “Yes” to either line 9a or 9b, for each
policy you must complete and attach Schedule D (Form
706), Form 712, and an explanation of why the policy or its
proceeds are not includible in the gross estate.
Line 11. Partnership Interests and Stock in
Close Corporations
If you answered “Yes” on line 11a, you must include
full details for partnerships (including family limited
partnerships), unincorporated businesses, and limited
liability companies (LLCs) on Schedule F (Form 706)
(Schedule E (Form 706) if the partnership interest is jointly
owned). Also include full details for fractional interests in
real estate on Schedule A (Form 706) and for stock of
inactive or close corporations on Schedule B (Form 706).
Value these interests using the rules of Regulations
section 20.2031-2 (stocks) or 20.2031-3 (other business
interests).
A close corporation is a corporation whose shares are
owned by a limited number of shareholders. Often, one
family holds the entire stock issue. As a result, little, if
any, trading of the stock takes place. There is, therefore,
no established market for the stock, and those sales that
do occur are at irregular intervals and seldom reflect all
the elements of a representative transaction as defined by
FMV.
Line 13. Trusts
If you answered “Yes” on either line 13a or line 13b, attach
a copy of the trust instrument for each trust.
Complete Schedule G (Form 706) if you answered
“Yes” on line 13a and Schedule F (Form 706) if you
answered “Yes” on line 13b.
Line 15. Foreign Accounts
Check “Yes” on line 15 if the decedent at the time of death
had an interest in or signature or other authority over a
financial account in a foreign country, such as a bank
account, securities account, an offshore trust, or other
financial account.
Part V—Recapitulation
Gross Estate—Items 1 Through 11
Items 1 through 9. You must make an entry in each of
items 1 through 9.
If the gross estate does not contain any assets of the
type specified by a given item, enter zero for that item.
Entering zero for any of items 1 through 9 is a statement
by the executor, made under penalties of perjury, that
the gross estate does not contain any includible assets
covered by that item.
Instructions for Form 706 (Rev. 7-2026)
Do not enter any amounts in the “Alternate value”
column unless you elected alternate valuation on Part III,
line 1.
Deductions—Items 14 Through 23
Note: If estimating the value of one or more assets
pursuant to the special rule of Regulations section
20.2010-2(a)(7)(ii), do not enter values for those assets
in items 1 through 9. Total the estimated values for those
assets and follow the instructions for item 10.
Item 18. If item 17 is less than or equal to the value (at
the time of the decedent’s death) of the property subject to
claims, enter the amount from item 17 on item 18.
If the amount on item 17 is more than the value of the
property subject to claims, enter the greater of:
• The value of the property subject to claims, or
• The amount actually paid at the time the return is filed.
Which schedules to attach for items 1 through 9. You
must attach the following.
• Schedule F (Form 706). Answer its questions even if
you report no assets on it.
• Schedules A, B, and C, of Form 706, if the gross
estate includes any (1) real estate, (2) stocks
and bonds, or (3) mortgages, notes, and cash,
respectively.
• Schedule D (Form 706), if the gross estate includes
any life insurance or if you answered “Yes” to Part IV,
line 9a.
• Schedule E (Form 706), if the gross estate contains
any jointly owned property or if you answered “Yes” to
Part IV, line 10.
• Schedule G (Form 706), if the decedent made any of
the lifetime transfers to be listed on that schedule or if
you answered “Yes” to Part IV, lines 12 or 13a.
• Schedule H (Form 706), if you answered “Yes” to Part
IV, line 14.
• Schedule I (Form 706), if you answered “Yes” to Part
IV, line 16.
Item 10. Under Regulations section 20.2010-2(a)(7)(ii), if
the total value of the gross estate and adjusted taxable
gifts is less than the basic exclusion amount (see section
6018(a)) and Form 706 is being filed only to elect
portability of the DSUE amount, the estate is not required
to report the value of certain property eligible for the
marital or charitable deduction. For this property being
reported on Schedules A, B, C, D, E, F, G, H, and I
of Form 706, the executor must figure the best estimate
of the value. Do not include the estimated value on the
line corresponding to the schedule on which the property
was reported. Instead, total the estimated value of the
assets subject to the special rule and enter on item 10
the amount from the Table of Estimated Values, later, that
corresponds to that total.
Note: The special rule does not apply if the valuation of
the asset is needed to determine the estate’s eligibility
for the provisions of section 2032, 2032A, 2652(a)(3), or
6166, or any other provision of the Code or regulations.
Note: As applies to all other values reported on Form
706, estimates of the value of property subject to the
special rule of Regulations section 20.2010-2(a)(7)(ii)
must result from the executor’s exercise of due diligence
and are subject to penalties of perjury.
Exclusion—Item 12
Item 12. Conservation easement exclusion. Complete
and attach Schedule U (Form 706) (along with any
required attachments) to claim the exclusion on this line.
Instructions for Form 706 (Rev. 7-2026)
Items 14 through 22. Attach the appropriate schedules
for the deductions claimed.
In no event should you enter more on item 18 than
the amount on item 17. See section 2053 and the related
regulations for more information.
Item 23. Under Regulations section 20.2010-2(a)(7)(ii), if
the total value of the gross estate and adjusted taxable
gifts is less than the basic exclusion amount (see section
6018(a)) and Form 706 is being filed only to elect
portability of the DSUE amount, the estate is not required
to report the value of certain property eligible for the
marital or charitable deduction. For this property being
reported on Schedule M or O of Form 706, enter on item
23 the amount from item 10.
Part VI—Portability of Deceased
Spousal Unused Exclusion (DSUE)
Section 2010(c)(4) authorizes estates of decedents dying
after December 31, 2010, to elect to transfer any unused
exclusion to the surviving spouse. The amount received
by the surviving spouse is called the deceased spousal
unused exclusion (DSUE) amount. If the executor of the
decedent’s estate elects transfer, or portability, of the
DSUE amount, the surviving spouse can apply the DSUE
amount received from the estate of the surviving spouse’s
last deceased spouse (defined later) against any tax
liability arising from subsequent lifetime gifts and transfers
at death.
Note: A nonresident surviving spouse who is not a citizen
of the United States may not take into account the DSUE
amount of a deceased spouse, except to the extent
allowed by treaty with the nonresident surviving spouse’s
country of citizenship.
Last Deceased Spouse Limitation
The last deceased spouse is the most recently deceased
person who was married to the surviving spouse at
the time of that person’s death. The identity of the last
deceased spouse is determined as of the day a taxable
gift is made, or in the case of a transfer at death, the
date of the surviving spouse’s death. The identity of
the last deceased spouse is not impacted by whether
the decedent’s estate elected portability or whether the
last deceased spouse had any DSUE amount available.
Remarriage also does not affect the designation of the
last deceased spouse and does not prevent the surviving
spouse from applying the DSUE amount to taxable
transfers.
When a taxable gift is made, the DSUE amount
received from the last deceased spouse is applied
before the surviving spouse’s basic exclusion amount. A
21
Table of Estimated Values
22
.
Include this amount on lines 10 and 23:
.
But less than or equal to:
.
If the total estimated value of the assets
eligible for the special rule under Reg.
section 20.2010-2(a)(7)(ii) is more than:
$0
$250,000
$250,000
$250,000
$500,000
$500,000
$500,000
$750,000
$750,000
$750,000
$1,000,000
$1,000,000
$1,000,000
$1,250,000
$1,250,000
$1,250,000
$1,500,000
$1,500,000
$1,500,000
$1,750,000
$1,750,000
$1,750,000
$2,000,000
$2,000,000
$2,000,000
$2,250,000
$2,250,000
$2,250,000
$2,500,000
$2,500,000
$2,500,000
$2,750,000
$2,750,000
$2,750,000
$3,000,000
$3,000,000
$3,000,000
$3,250,000
$3,250,000
$3,250,000
$3,500,000
$3,500,000
$3,500,000
$3,750,000
$3,750,000
$3,750,000
$4,000,000
$4,000,000
$4,000,000
$4,250,000
$4,250,000
$4,250,000
$4,500,000
$4,500,000
$4,500,000
$4,750,000
$4,750,000
$4,750,000
$5,000,000
$5,000,000
$5,000,000
$5,250,000
$5,250,000
$5,250,000
$5,500,000
$5,500,000
$5,500,000
$5,750,000
$5,750,000
$5,750,000
$6,000,000
$6,000,000
$6,000,000
$6,250,000
$6,250,000
$6,250,000
$6,500,000
$6,500,000
$6,500,000
$6,750,000
$6,750,000
$6,750,000
$7,000,000
$7,000,000
$7,000,000
$7,250,000
$7,250,000
$7,250,000
$7,500,000
$7,500,000
$7,500,000
$7,750,000
$7,750,000
$7,750,000
$8,000,000
$8,000,000
$8,000,000
$8,250,000
$8,250,000
$8,250,000
$8,500,000
$8,500,000
$8,500,000
$8,750,000
$8,750,000
$8,750,000
$9,000,000
$9,000,000
$9,000,000
$9,250,000
$9,250,000
$9,250,000
$9,500,000
$9,500,000
$9,500,000
$9,750,000
$9,750,000
$9,750,000
$10,000,000
$10,000,000
$10,000,000
$10,250,000
$10,250,000
$10,250,000
$10,500,000
$10,500,000
$10,500,000
$10,750,000
$10,750,000
$10,750,000
$11,000,000
$11,000,000
Instructions for Form 706 (Rev. 7-2026)
Table of Estimated Values (continued)
.
Include this amount on lines 10 and 23:
.
But less than or equal to:
.
If the total estimated value of the assets
eligible for the special rule under Reg.
section 20.2010-2(a)(7)(ii) is more than:
$11,000,000
$11,180,000
$11,180,000
$11,180,000
$11,400,000
$11,400,000
$11,400,000
$11,580,000
$11,580,000
$11,580,000
$11,700,000
$11,700,000
$11,700,000
$12,060,000
$12,060,000
$12,060,000
$12,920,000
$12,920,000
$12,920,000
$13,610,000
$13,610,000
$13,610,000
$13,990,000
$13,990,000
$13,990,000
$15,000,000
$15,000,000
surviving spouse may use the DSUE amount of the last
deceased spouse to offset the tax on any taxable transfer
made after the deceased spouse’s death. A surviving
spouse who has more than one predeceased spouse is
not precluded from using the DSUE amount of each
spouse in succession. A surviving spouse may not use the
sum of DSUE amounts from multiple predeceased
spouses at one time nor may the DSUE amount of a
predeceased spouse be applied after the death of a
subsequent spouse.
Making the Election
A timely filed and complete Form 706 is required to
elect portability of the DSUE amount to a surviving
spouse. The filing requirement applies to all estates of
decedents choosing to elect portability of the DSUE
amount, regardless of the size of the estate. A timely filed
return is one that is filed on or before the due date of
the return, including extensions. See Rev. Proc. 2022-32
(superseding Rev. Proc. 2017-34) for the simplified
procedures for late elections.
The timely filing of a complete Form 706 with DSUE
will be deemed a portability election if there is a surviving
spouse. The election is effective as of the decedent’s date
of death, so the DSUE amount received by a surviving
spouse may be applied to any transfer occurring after
the decedent’s death. A portability election is irrevocable,
unless an adjustment or amendment to the election is
made on a subsequent return filed on or before the due
date.
Note: Under Regulations section 20.2010-2(a)(5), the
executor of an estate of a nonresident decedent who was
not a citizen of the United States at the time of death
cannot make a portability election.
If an executor is appointed, qualified, and acting with
the United States on behalf of the decedent’s estate,
only that executor may make or opt out of a portability
election. If there is no executor, see Regulations section
20.2010-2(a)(6)(ii).
Opting Out
If an estate files a Form 706 but does not wish to
make the portability election, the executor can opt out of
Instructions for Form 706 (Rev. 7-2026)
the portability election by checking the box indicated in
Section A of this Part. If no return is required under section
6018(a), not filing Form 706 will avoid making the election.
Figuring the DSUE Amount
Regulations section 20.2010-2(b) requires that a
decedent’s DSUE be figured on the estate tax return. The
DSUE amount is the lesser of (a) the basic exclusion
amount in effect on the date of death of the decedent
whose DSUE is being figured, or (b) the decedent’s
applicable exclusion amount less the amount on Part II,
line 5 on the Form 706 for the estate of the decedent.
Amounts on which gift taxes were paid are excluded from
adjusted taxable gifts for the purpose of this computation.
When a surviving spouse applies the DSUE amount to
a lifetime gift or bequest at death, the IRS may examine
any return of a predeceased spouse whose executor
elected portability to verify the allowable DSUE amount.
The DSUE amount may be adjusted or eliminated as
a result of the examination; however, the IRS may only
make an assessment of additional tax on the return of
the predeceased spouse within the applicable limitations
period under section 6501.
Special Rule Where Value of Certain Property
Not Required To Be Reported on Form 706
The regulations provide that executors of estates who
are not otherwise required to file Form 706 under section
6018(a) do not have to report the value of certain property
qualifying for the marital or charitable deduction. For such
property, the executor may estimate the value in good
faith and with the due diligence to be afforded all assets
includible in the gross estate. The amount reported on
Form 706 will correspond to a range of dollar values and
will be included in the value of the gross estate shown on
Part II, line 1. See the instructions for Part V, Item 10 and
Item 23, earlier, for more details.
Specific Instructions for Part VI
Portability election. If you intend to elect portability of
the DSUE amount, timely filing a complete Form 706 is
all that is required. Complete Section B if any assets of
the estate are being transferred to a QDOT and complete
23
Section C of this Part to figure the DSUE amount that will
be transferred to the surviving spouse.
Section A. Opting out of portability. If you are filing
Form 706 and do not wish to elect portability, then check
the box indicated. Do not complete Section B or C.
Section B. Portability and QDOTs. A QDOT allows the
estate of a decedent to bequeath property to a surviving
spouse who is not a citizen of the United States and still
receive a marital deduction. When property passes to a
QDOT, estate tax is imposed under section 2056A as
distributions are made from the trust. When a QDOT is
established and there is a DSUE amount, the executor of
the decedent’s estate will determine a preliminary DSUE
amount for the purpose of electing portability. This amount
will decrease as section 2056A distributions are made. In
estates with a QDOT, the DSUE amount generally may not
be applied against tax arising from lifetime gifts because
it will not be available to the surviving spouse until it is
finally determined, usually upon the death of the surviving
spouse or when the QDOT is terminated.
Note: If a surviving spouse who is not a citizen of
the United States becomes a citizen and the section
2056A tax no longer applies to the assets of the QDOT,
as of the date the surviving spouse becomes a U.S.
citizen, the DSUE amount is considered final and is
available for application by the surviving spouse. See
Regulations sections 20.2010-2(c)(4), 20.2010-3(c)(3),
and 25.2505-2(d)(3).
Check the appropriate box in this section and see the
instructions for Schedule M (Form 706) if more information
is needed about QDOT.
Section C. DSUE amount portable to decedent’s
surviving spouse. Complete Section C only if electing
portability of the DSUE amount to the surviving spouse.
On line 1, enter the decedent’s applicable exclusion
amount from Part II, line 9d. The applicable exclusion
amount is the sum of the basic exclusion amount for
the year of death, any DSUE amount received from a
predeceased spouse, if applicable, and any Restored
Exclusion Amount.
On line 2, enter the value of the cumulative lifetime gifts
on which gift tax was paid or payable, from the Line 7
Worksheet, Part B, line 6. Enter the amount as it appears.
On line 8, figure the unused exclusion amount.
On line 9, enter the basic exclusion amount from Part II,
line 9a.
On line 10, enter the smaller of line 8 or line 9. This will
be the DSUE amount available to the surviving spouse.
Section D. DSUE amount received from predeceased
spouse(s). Complete Section D if the decedent was a
surviving spouse who received a DSUE amount from one
or more predeceased spouses.
Section D requests information on all DSUE amounts
received from the decedent’s last deceased spouse and
any previously deceased spouses. Each line in the chart
should reflect a different predeceased spouse; enter the
calendar year(s) in column F.
On line 1, provide information on the decedent’s last
deceased spouse.
24
On line 2, provide information as requested if the
decedent had any other predeceased spouse whose
executor made the portability election. Any remaining
DSUE amount which was not used prior to the death of
a subsequent spouse is not considered in this calculation
and cannot be applied against any taxable transfer.
On line 3, enter only the total amounts of DSUE
received and used from spouses who died before the
decedent’s last deceased spouse, line 2, column E.
On line 4, add line 3 and line 1, column D, if any, to
determine the decedent’s total DSUE amount.
Schedule A—Real Estate
Caution: If any assets to which the special rule
of Regulations section 20.2010-2(a)(7)(ii) applies are
reported on this schedule, do not enter any value in the
last three columns. See the instructions for Part V, Item 10,
for information on how to estimate and report the value of
these assets.
If the total gross estate contains any real estate,
complete Schedule A (Form 706) and file it with the
return. On Schedule A (Form 706), list real estate the
decedent owned or had contracted to purchase. Number
each parcel under column (i).
Describe the real estate in enough detail so that the
IRS can easily locate it for inspection and valuation. For
each parcel of real estate, report the area and, if the
parcel is improved, describe the improvements. For city
or town property, report the street and number, ward,
subdivision, block and lot, etc. For rural property, report
the township, range, landmarks, etc.
If any item of real estate is subject to a mortgage
for which the decedent’s estate is liable, that is, if the
indebtedness may be charged against other property of
the estate that is not subject to that mortgage, or if the
decedent was personally liable for that mortgage, you
must report the full value of the property under column (v),
Value at date of death. Enter the amount of the mortgage
under column (ii), Description. The unpaid amount of the
mortgage may be deducted on Schedule K (Form 706).
If the decedent’s estate is not liable for the amount
of the mortgage, report only the value of the equity
of redemption (or value of the property less the
indebtedness) under column (v), Value at date of death,
as part of the gross estate. Do not enter any amount less
than zero. Do not deduct the amount of indebtedness on
Schedule K (Form 706).
Also list on Schedule A (Form 706) real property the
decedent contracted to purchase. Report the full value of
the property and not the equity under column (v), Value
at date of death. Deduct the unpaid part of the purchase
price on Schedule K (Form 706).
Report the value of real estate without reducing it for
homestead or other exemption, or the value of dower,
curtesy, or a statutory estate created instead of dower or
curtesy.
Explain how the reported values were determined and
attach copies of any appraisals.
Instructions for Form 706 (Rev. 7-2026)
Schedule A (Form 706)—Example 1
In this example, alternate valuation is not adopted; the date of death is January 1, 2026.
1 Enter real estate the decedent owned or had contracted to purchase. See instructions.
(i)
Item
number
1
(ii)
Description
(iii)
Alternate
valuation
date
(iv)
Alternate
value
House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100
due at the end of each quarter, February 1, May 1, August 1, and November 1. Value based on
appraisal, copy of which is attached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent due on item 1 for quarter ending November 1, 2025, but not collected at date of
death . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent accrued on item 1 for November and December 2025 . . . . . . . . . . . . . . . . . . . .
House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800
payable monthly. Value based on appraisal, copy of which is attached . . . . . . . . . . . . . .
Rent due on item 2 for December 2025, but not collected at death . . . . . . . . . . . . . . . .
2
(v)
Value at
date of death
$550,000
8,100
5,400
375,000
1,800
Schedule A (Form 706)—Example 2
In this example, alternate valuation is adopted; the date of death is January 1, 2026.
1 Enter real estate the decedent owned or had contracted to purchase. See instructions.
(i)
Item
number
1
2
(ii)
Description
(iii)
Alternate
valuation
date
House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent of $8,100
due at the end of each quarter, February 1, May 1, August 1, and November 1. Value based on
appraisal, copy of which is attached. Not disposed of within 6 months of date of death . . . .
Rent due on item 1 for quarter ending November 1, 2025, but not collected until February 1,
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent accrued on item 1 for November and December 2025, collected on February 1,
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800
payable monthly. Value based on appraisal, copy of which is attached. Property exchanged for
farm on May 1, 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rent due on item 2 for December 2025, but not collected until February 1, 2026 . . . . . . .
Schedule T—Section 2032A Property
Valuation
Tip: Schedule T (Form 706) was previously named
Schedule A-1 (Form 706) in year 2024 and earlier.
The election to value certain farm and closely held
business property at its special-use value is made by
checking “Yes” on Form 706, Part III, line 2. Schedule T
(Form 706) is used to report the additional information
that must be submitted to support this election. In order
to make a valid election, you must complete Schedule T
(Form 706) and attach all of the required statements and
appraisals.
For definitions and additional information concerning
special-use valuation, see section 2032A and the related
regulations.
Instructions for Form 706 (Rev. 7-2026)
(iv)
Alternate
value
(v)
Value at
date of death
7/1/26
$535,000
$550,000
2/1/26
2/1/26
8,100
5,400
8,100
5,400
5/1/26
2/1/26
369,000
1,800
375,000
1,800
Part I. Type of Election
Estate and GST tax elections. If you elect special-use
valuation for the estate tax, you must also elect
special-use valuation for the GST tax and vice versa.
Protective election. To make the protective election
described in the Instructions for Form 706, Part III, line 2,
you must complete the following.
• Enter the decedent’s name and SSN in the spaces
provided at the top of Schedule T (Form 706).
• Check the box in Part I.
• Complete Part II, line 1, and columns (a), (b), and (c)
of lines 10 and 14.
For purposes of the protective election, list on line 10 all
of the real property that passes to the qualified heirs even
though some of the property will be shown on line 6 when
the additional notice of election is subsequently filed.
You don’t need to complete columns (d), (e), or (f) of
lines 10 and 14 or any other line entries on Schedule T
(Form 706).
25
Completing Schedule T (Form 706) as described above
constitutes a Notice of Protective Election as described in
Regulations section 20.2032A-8(b).
Part II. Notice of Election
Line 18. Because the special-use valuation election
creates a potential tax liability for the recapture tax of
section 2032A(c), you must list each person who receives
an interest in the specially valued property on Schedule T
(Form 706). If more space is needed to list all persons,
attach additional copies of Part II, line 18. In column
(e), Fair market value, and column (f), Special-use value,
enter the total respective values of all the specially valued
property interests received by each person.
GST Tax Savings
To figure the additional GST tax due upon disposition (or
cessation of qualified use) of the property, each “skip
person” (as defined in the instructions for Schedule R
(Form 706)) who receives an interest in the specially
valued property must know the total GST tax savings
all interests in specially valued property received. The
GST tax savings is the difference between the total GST
tax that was imposed on all interests in specially valued
property received by the skip person valued at their
special-use value and the total GST tax that would have
been imposed on the same interests received by the skip
person had they been valued at their FMV.
Because the GST tax depends on the executor’s
allocation of the GST exemption and the grandchild
exclusion, the skip person who receives the interests is
unable to figure this GST tax savings. Therefore, for each
skip person who receives an interest in specially valued
property, you must attach a calculation of the total GST tax
savings attributable to that person’s interests in specially
valued property.
How to figure the GST tax savings. Before figuring
each skip person’s GST tax savings, complete Schedules
R (Form 706) and Schedule R-1 (Form 706) for the entire
estate (using the special-use values).
For each skip person, complete two Schedules R
(Form 706) (Parts II and III only) as worksheets, one
showing the interests in specially valued property received
by the skip person at their special-use value and one
showing the same interests at their FMV.
If the skip person received interests in specially valued
property that were shown on Schedule R-1 (Form 706),
show these interests on the Schedule R (Form 706),
Parts II and III worksheets, as appropriate. Do not use
Schedule R-1 (Form 706) as a worksheet.
Completing the special-use value worksheets. On
Schedule R (Form 706), Parts II and III, lines 3 through 5
and 7, enter -0-.
Completing the FMV worksheets.
• Schedule R (Form 706), Parts II and III, lines 3 and 4,
fixed taxes and other charges. If valuing the interests
at FMV (instead of special-use value) causes any
of these taxes and charges to increase, enter the
increased amount (only) on these lines and attach an
explanation of the increase. Otherwise, enter -0-.
26
• Schedule R (Form 706), Parts II and III, line 7—GST
exemption allocation. If you completed Schedule R
(Form 706), Part I, line 11, enter on line 7 the amount
shown for the skip person on the line 11 special-use
allocation schedule you attached to Schedule R (Form
706). If you did not complete Schedule R (Form 706),
Part I, line 11, enter -0- on line 7.
Total GST tax savings. For each skip person, subtract
the tax amount on line 11, Part II, of the special-use value
worksheet from the tax amount on line 11, Part II, of the
FMV worksheet. This difference is the skip person’s total
GST tax savings.
Part III. Agreement to Special Valuation Under
Section 2032A
The agreement to special valuation is required under
sections 2032A(a)(1)(B) and (d)(2) and must be signed
by all parties who have any interest in the property being
valued based on its qualified use as of the date of the
decedent’s death.
An interest in property is an interest that, as of the date
of the decedent’s death, can be asserted under applicable
law so as to affect the disposition of the specially valued
property by the estate. Any person who at the decedent’s
death has any such interest in the property, whether
present, future, vested, or contingent, must enter into the
agreement. Included are the following.
• Owners of remainder and executory interests;
• Holders of general or special powers of appointment;
• Beneficiaries of a gift over in default of exercise of any
such power;
• Joint tenants and holders of similar undivided interests
when the decedent held only a joint or undivided
interest in the property or when only an undivided
interest is specially valued; and
• Trustees of trusts and representatives of other entities
holding title to or any interests in the property.
An heir who has the power under local law to challenge
a will and thereby affect disposition of the property is not,
however, considered to be a person with an interest in
property under section 2032A solely by reason of that
right. Likewise, creditors of an estate are not such persons
solely by reason of their status as creditors.
If persons required to enter into the agreement desire
that an agent act for them or cannot legally bind
themselves due to infancy or other incompetency, or due
to death before the election under section 2032A is timely
exercised, a representative authorized by local law to
bind persons in agreements of this nature may sign the
agreement on the person’s behalf.
The IRS will contact the agent designated in
the agreement on all matters relating to continued
qualification under section 2032A of the specially valued
real property and on all matters relating to the special
lien arising under section 6324B. It is the duty of the
agent as attorney-in-fact for the parties with interests
in the specially valued property to furnish the IRS with
any requested information and to notify the IRS of any
disposition or cessation of qualified use of any part of the
property.
Instructions for Form 706 (Rev. 7-2026)
Part IV. Additional Names and Signatures for
Part III
If there is not enough space in Part III, use Part IV to enter
the names and signatures of any additional qualifying
heirs and/or other interested parties. Attach additional
copies of Part IV, if necessary.
Checklist for Section 2032A Election
Caution: When making the special-use valuation election
on Schedule T (Form 706), use this checklist to ensure
that you are providing everything necessary to make a
valid election.
To have a valid special-use valuation election under
section 2032A, you must file, in addition to the federal
estate tax return, (a) a notice of election (Schedule T
(Form 706), Part II), and (b) a fully executed agreement
(Schedule T (Form 706), Part III, and Part IV, if applicable).
You must include certain information in the notice of
election. To ensure that the notice of election includes
all of the information required for a valid election, use the
following checklist. The checklist is for your use only. Do
not file it with the return.
Does the notice of election include the decedent’s
name and SSN as they appear on the estate tax
return?
Does the notice of election include the relevant
qualified use of the property to be specially valued?
Does the notice of election describe the items of
real property shown on the estate tax return that
are to be specially valued and identify the property
by the Form 706 schedule, line number, and item
number?
Does the notice of election include the FMV
of the real property to be specially valued and
also include its value based on the qualified use
(determined without the adjustments provided in
section 2032A(b)(3)(B))?
Does the notice of election include the method used
to determine the special-use value?
Does the notice of election include copies of written
appraisals of the FMV of the real property?
Does the notice of election include a statement that
the decedent and/or a member of the decedent’s
family has owned all of the specially valued property
for at least 5 years of the 8 years immediately
preceding the date of the decedent’s death?
Does the notice of election include a statement
as to whether there were any periods during the
8-year period preceding the decedent’s date of
death during which the decedent or a member of
the decedent’s family did not (a) own the property to
be specially valued, (b) use it in a qualified use, or
(c) materially participate in the operation of the farm
or other business? (See section 2032A(e)(6).)
Does the notice of election include, for each item
of specially valued property, the name of every
person who has an interest in that item of specially
valued property and the following information about
each such person: (a) the person’s address, (b) the
person’s TIN, (c) the person’s relationship to the
decedent, and (d) the value of the property interest
passing to that person based on both FMV and
qualified use?
Does the notice of election include affidavits
describing the activities constituting material
participation and the identities of the material
participants?
Does the notice of election include a legal
description of each item of specially valued
property? (Note: The legal description must be
the complete legal description of the property. An
abbreviated description is not sufficient.)
Does the notice of election include the adjusted
value (as defined in section 2032A(b)(3)(B)) of (a)
all real property that both passes from the decedent
and is used in a qualified use, without regard to
whether it is to be specially valued; and (b) all real
property to be specially valued?
(In the case of an election made for qualified woodlands,
the information included in the notice of election must
include the reason for entitlement to the woodlands
election.)
Does the notice of election include (a) the items of
personal property shown on the estate tax return
that pass from the decedent to a qualified heir, and
that are used in qualified use; and (b) the total value
of such personal property adjusted under section
2032A(b)(3)(B)?
Any election made under section 2032A will not be
valid unless a properly executed agreement (Schedule T
(Form 706), Part III, and Part IV, if applicable) is filed
with the estate tax return. To ensure that the agreement
satisfies the requirements for a valid election, use the
following checklist. The checklist is for your use only. Do
not file it with the return.
Does the notice of election include the adjusted
value of the gross estate? (See section 2032A(b)(3)
(A).)
Instructions for Form 706 (Rev. 7-2026)
27
Has the agreement been signed by each qualified
heir having an interest in the property being
specially valued?
Has every qualified heir expressed consent to
personal liability under section 2032A(c) in the
event of an early disposition or early cessation of
qualified use?
Is the agreement that is actually signed by the
qualified heirs in a form that is binding on all of
the qualified heirs having an interest in the specially
valued property?
Does the agreement designate an agent to act for
the parties to the agreement in all dealings with the
IRS on matters arising under section 2032A?
Has the agreement been signed by the designated
agent and does it give the address of the agent?
Schedule B—Stocks and Bonds
Caution: If any assets to which the special rule
of Regulations section 20.2010-2(a)(7)(ii) applies are
reported on this schedule, do not enter any value in the
last three columns. See the instructions for Part V, Item 10,
for information on how to estimate and report the value of
these assets.
Tip: Before completing Schedule B (Form 706), see the
examples illustrating the alternate valuation dates being
adopted and not being adopted, later.
If the total gross estate contains any stocks or bonds,
you must complete Schedule B (Form 706) and file it with
the return.
On Schedule B (Form 706), list the stocks and bonds
included in the decedent’s gross estate. Number each
item under column (i).
Note: Unless specifically exempted by an estate tax
provision of the Code, bonds that are exempt from federal
income tax are not exempt from estate tax. You should list
these bonds on Schedule B (Form 706).
Public housing bonds includible in the gross estate
must be included at their full value.
If you paid any estate, inheritance, legacy, or
succession tax to a foreign country on any stocks or
bonds included in this schedule, group those stocks and
bonds together and label them “Subjected to Foreign
Death Taxes.”
List interest and dividends on each stock or bond on a
separate line.
Indicate as a separate item dividends that have not
been collected at death and are payable to the decedent
or the estate because the decedent was a stockholder of
record on the date of death. However, if the stock is being
traded on an exchange and is selling ex-dividend on the
date of the decedent’s death, do not include the amount
28
of the dividend as a separate item. Instead, add it to the
ex-dividend quotation in determining the FMV of the stock
on the date of the decedent’s death. Dividends declared
on shares of stock before the death of the decedent but
payable to stockholders of record on a date after the
decedent’s death are not includible in the gross estate for
federal estate tax purposes and should not be listed here.
Description
Stocks. For stocks, indicate:
• Number of shares;
• Whether common or preferred;
• Issue;
• Par value where needed for identification;
• Price per share;
• Exact name of corporation;
• Principal exchange upon which sold, if listed on an
exchange; and
• 9-digit Committee on Uniform Security Identification
Procedures (CUSIP) number.
Bonds. For bonds, indicate:
• Quantity and denomination;
• Name of obligor;
• Date of maturity;
• Interest rate;
• Interest due date;
• Principal exchange, if listed on an exchange; and
• 9-digit CUSIP number.
If the stock or bond is unlisted, show the company’s
principal business office.
If the gross estate includes any interest in a trust,
partnership, or closely held entity, provide the EIN of the
entity in the appropriate column on Schedules B, E, F, G,
M, and O of Form 706. You must also provide the EIN of
an estate (if any) on the above-noted schedules, where
applicable.
CUSIP number. The CUSIP number is a 9-digit number
that is assigned to all stocks and bonds traded on
major exchanges and many unlisted securities. Usually,
the CUSIP number is printed on the face of the
stock certificate. If you do not have a stock certificate,
the CUSIP number may be found on the broker’s or
custodian’s statement or by contacting the company’s
transfer agent.
Valuation
List the FMV of the stocks or bonds. The FMV of a
stock or bond (whether listed or unlisted) is the mean
between the highest and lowest selling prices quoted on
the valuation date. If only the closing selling prices are
available, then the FMV is the mean between the quoted
closing selling price on the valuation date and on the
trading day before the valuation date.
If there were no sales on the valuation date, figure the
FMV as follows.
1. Find the mean between the highest and lowest
selling prices on the nearest trading date before and
the nearest trading date after the valuation date.
Both trading dates must be reasonably close to the
valuation date.
Instructions for Form 706 (Rev. 7-2026)
Schedule B (Form 706)—Examples
Example showing use of Schedule B (Form 706) where the alternate valuation is not adopted; date of death, January 1, 2026.
1 Enter all stocks and bonds that are included in the decedent’s gross estate. See instructions.
(i)
Item
number
(ii)
Description, including face amount of bonds or number of
shares and par value for identification
1
$60,000—Arkansas Railroad Co. first mortgage 4%, 20-year
bonds, due 2027. Interest payable quarterly on Feb. 1, May 1,
Aug. 1, and Nov. 1; N.Y. Exchange . . . . . . . . . . . . . . . .
(v)
Alternate
valuation
date
(vi)
Alternate
value
(vii)
Value at
date of
death
100
-------
$- - - - - - -
$ 60,000
Interest coupons attached to bonds, item 1, due and payable
on Nov. 1, 2025, but not cashed at date of death . . . . . . .
-------
-------
-------
600
Interest accrued on item 1, from Nov. 1, 2025, to Jan. 1,
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-------
-------
-------
400
110
-------
-------
55,000
-------
-------
-------
1,000
500 shares Public Service Corp., common; N.Y.
Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
(iii)
Enter CUSIP
number; or if a
trust, partnership,
or closely held
entity, enter EIN
XXXXXXXXX
XXXXXXXXX
Dividend on item 2 of $2 per share declared Dec. 10, 2025,
payable on Jan. 9, 2026, to holders of record on Dec. 30,
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(iv)
Unit value
Example showing use of Schedule B (Form 706) where the alternate valuation is adopted; date of death, January 1, 2026.
1 Enter all stocks and bonds that are included in the decedent’s gross estate. See instructions.
(i)
Item
number
(ii)
Description, including face amount of bonds or number of
shares and par value for identification
1
$60,000—Arkansas Railroad Co. first mortgage 4%, 20-year
bonds, due 2026. Interest payable quarterly on Feb. 1, May 1,
Aug. 1, and Nov. 1; N.Y. Exchange . . . . . . . . . . . . . . . .
2
(v)
Alternate
valuation
date
(vi)
Alternate
value
(vii)
Value at
date of
death
100
------
$- - - - - -
$ 60,000
$30,000 of item 1 distributed to legatees on Apr. 1, 2026 . .
99
4/1/26
29,700
------
$30,000 of item 1 sold by executor on May 1, 2026 . . . . . .
98
5/1/26
29,400
------
Interest coupons attached to bonds, item 1, due and payable
on Nov. 1, 2025, but not cashed at date of death. Cashed by
executor on Feb. 2, 2026 . . . . . . . . . . . . . . . . . . . . . .
------
2/2/26
600
600
Interest accrued on item 1, from Nov. 1, 2025, to Jan. 1, 2026.
Cashed by executor on Feb. 2, 2026 . . . . . . . . . . . . . . .
------
2/2/26
400
400
110
------
------
55,000
90
7/1/26
45,000
------
------
1/9/26
1,000
1,000
500 shares Public Service Corp., common; N.Y.
Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not disposed of within 6 months following death . . . . . . .
Dividend on item 2 of $2 per share declared Dec. 10, 2025,
paid on Jan. 9, 2026, to holders of record on Dec. 30,
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Prorate the difference between the mean prices to the
valuation date.
3. Add or subtract (whichever applies) the prorated part
of the difference to or from the mean price figured for
the nearest trading date before the valuation date.
If no actual sales were made reasonably close to the
valuation date, make the same computation using the
mean between the bona fide bid and asked prices instead
of sales prices. If actual sales prices or bona fide bid and
asked prices are available within a reasonable period of
Instructions for Form 706 (Rev. 7-2026)
(iii)
Enter CUSIP
number; or if a
trust, partnership,
or closely held
entity, enter EIN
XXXXXXXXX
XXXXXXXXX
(iv)
Unit value
time before the valuation date but not after the valuation
date, or vice versa, use the mean between the highest
and lowest sales prices or bid and asked prices as the
FMV.
For example, assume that sales of stock nearest the
valuation date (June 15) occurred 2 trading days before
(June 13) and 3 trading days after (June 18). On those
days, the mean sale prices per share were $10 and $15,
respectively. Therefore, the price of $12 is considered the
FMV of a share of stock on the valuation date. If, however,
on June 13 and 18, the mean sale prices per share were
29
$15 and $10, respectively, the FMV of a share of stock on
the valuation date is $13.
5. Cash in banks, savings and loan associations, and
other types of financial organizations.
If only closing prices for bonds are available, see
Regulations section 20.2031-2(b).
Description
Apply the rules in the section 2031 regulations to
determine the value of inactive stock and stock in close
corporations. Attach to Schedule B (Form 706) complete
financial and other data used to determine value, including
balance sheets (particularly the one nearest to the
valuation date) and statements of the net earnings or
operating results and dividends paid for each of the 5
years immediately before the valuation date.
Mortgages. For mortgages, list:
• Face value,
• Unpaid balance,
• Date of mortgage,
• Name of maker,
• Property mortgaged,
• Date of maturity,
• Interest rate, and
• Interest date.
Securities reported as of no value, of nominal value,
or obsolete should be listed last. Include the address of
the company and the state and date of incorporation.
Attach copies of correspondence or statements used to
determine the “no value.”
Mortgage description example. “Bond and mortgage
of $50,000, unpaid balance: $17,000; dated: January 1,
1992; J. Doe to R. Roe; premises: 22 Clinton Street,
Newark, NJ; due: January 1, 2026; interest payable at
10% a year—January 1 and July 1.”
If the security was listed on more than one stock
exchange, use either the records of the exchange where
the security is principally traded or the composite listing
of combined exchanges, if available, in a publication of
general circulation. In valuing listed stocks and bonds, you
should carefully check accurate records to obtain values
for the applicable valuation date.
Promissory notes. For promissory notes, list in the
same way as mortgages.
If you get quotations from brokers, or evidence of
the sale of securities from the officers of the issuing
companies, attach to the schedule copies of the letters
furnishing these quotations or evidence of sale.
Schedule C—Mortgages, Notes, and
Cash
Caution: If any assets to which the special rule
of Regulations section 20.2010-2(a)(7)(ii) applies are
reported on this schedule, do not enter any value in the
last three columns. See the instructions for Part V, Item 10,
for information on how to estimate and report the value of
these assets.
Complete Schedule C (Form 706) and file it with your
return if the total gross estate contains any:
• Mortgages,
• Notes, or
• Cash.
List on Schedule C (Form 706):
Contracts by the decedent to sell land. For contracts
by the decedent to sell land, list:
• Name of purchaser,
• Contract date,
• Property description,
• Sale price,
• Initial payment,
• Amounts of installment payment,
• Unpaid balance of principal, and
• Interest rate.
Cash in possession. For cash on hand, list such cash
separately from bank deposits.
Cash in financial organizations. For cash in banks,
savings and loan associations, and other types of financial
organizations, list:
• Name and address of each financial organization;
• Amount in each account;
• Serial or account number;
• Nature of account—checking, savings, time deposit,
etc.; and
• Unpaid interest accrued from date of last interest
payment to the date of death.
Note: If you obtain statements from the financial
organizations, keep them for IRS inspection.
• Mortgages and notes payable to the decedent at the
Schedule D—Insurance on the
Decedent’s Life
Note: Do not list mortgages and notes payable by the
decedent on Schedule C (Form 706). (If these are
deductible, list them on Schedule K (Form 706).)
Caution: If any assets to which the special rule
of Regulations section 20.2010-2(a)(7)(ii) applies are
reported on this schedule, do not enter any value in the
last three columns. See the instructions for Part V, Item 10,
for information on how to estimate and report the value of
these assets.
If you are required to file Form 706 and there was any
insurance on the decedent’s life, whether or not included
in the gross estate, you must complete Schedule D (Form
706) and file it with the return.
time of death, and
• Cash the decedent had at the date of death.
Schedule C (Form 706) reporting order. List the items
on Schedule C (Form 706) in the following order.
1. Mortgages.
2. Promissory notes.
3. Contracts by decedent to sell land.
4. Cash in possession.
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Instructions for Form 706 (Rev. 7-2026)
Insurance you must include on Schedule D (Form
706). Under section 2042, you must include in the gross
estate:
• Insurance on the decedent’s life receivable by or for
the benefit of the estate; and
• Insurance on the decedent’s life receivable by
beneficiaries other than the estate, as described
below.
The term “insurance” refers to life insurance of
every description, including death benefits paid by
fraternal beneficiary societies operating under the
lodge system, and death benefits paid under no-fault
automobile insurance policies if the no-fault insurer was
unconditionally bound to pay the benefit in the event of the
insured’s death.
Insurance in favor of the estate. Include on
Schedule D (Form 706) the full amount of the proceeds
of insurance on the life of the decedent receivable by the
executor or otherwise payable to or for the benefit of the
estate. Insurance in favor of the estate includes insurance
used to pay the estate tax, and any other taxes, debts,
or charges that are enforceable against the estate. The
manner in which the policy is drawn is immaterial as long
as there is an obligation, legally binding on the beneficiary,
to use the proceeds to pay taxes, debts, or charges. You
must include the full amount even though the premiums or
other consideration may have been paid by a person other
than the decedent.
Insurance receivable by beneficiaries other than
the estate. Include on Schedule D (Form 706) the
proceeds of all insurance on the life of the decedent
not receivable by, or for the benefit of, the decedent’s
estate if the decedent possessed at death any of the
following incidents of ownership, exercisable either alone
or in conjunction with any person or entity.
Incidents of ownership in a policy include the following.
• The right of the insured or estate to its economic
benefits.
• The power to change the beneficiary.
• The power to surrender or cancel the policy.
• The power to assign the policy or to revoke an
assignment.
• The power to pledge the policy for a loan.
• The power to obtain from the insurer a loan against
the surrender value of the policy.
• A reversionary interest if the value of the reversionary
interest was more than 5% of the value of the policy
immediately before the decedent died. (An interest
in an insurance policy is considered a reversionary
interest if, for example, the proceeds become payable
to the insured’s estate or payable as the insured
directs if the beneficiary dies before the insured.)
Life insurance not includible in the gross estate under
section 2042 may be includible under some other section
of the Code. For example, a life insurance policy could be
transferred by the decedent in such a way that it would be
includible in the gross estate under section 2036, 2037, or
2038. See the instructions for Schedule G (Form 706) for
a description of these sections.
Instructions for Form 706 (Rev. 7-2026)
How to Complete Schedule D (Form 706)
You must list every insurance policy on the life of the
decedent, whether or not it is included in the gross estate.
Under column (ii), Description, list:
• The name of the insurance company, and
• The number of the policy.
For every life insurance policy listed on the schedule,
request a statement on Form 712 from the company that
issued the policy. Attach the Form 712 to Schedule D
(Form 706).
Note: If the insurance company that issued the policy
will not provide Form 712, you should attach evidence
that verifies the amount includible on Schedule D (Form
706), including but not limited to an attachment, rider,
assignment, copy of insurance proceeds check, and other
relevant material.
If the policy proceeds are paid in one sum, enter the net
proceeds received from Form 712, line 24 on column (v)
(and column (iv), alternate value). If the policy proceeds
are not paid in one sum, enter the value of the proceeds
as of the date of the decedent’s death from Form 712,
line 25.
If part or all of the policy proceeds are not included in
the gross estate, explain why they were not included.
Schedule E—Jointly Owned Property
Caution: If any assets to which the special rule
of Regulations section 20.2010-2(a)(7)(ii) applies are
reported on this schedule, do not enter any value in the
last three columns. See the instructions for Part V, Item 10,
for information on how to estimate and report the value of
these assets.
If you are required to file Form 706, complete
Schedule E (Form 706) and file it with the return if the
decedent owned any joint property at the time of death,
whether or not the decedent’s interest is includible in the
gross estate.
Enter on this schedule all property of whatever kind or
character, whether real estate, personal property, or bank
accounts, in which the decedent held at the time of death
an interest either as a joint tenant with right to survivorship
or as a tenant by the entirety.
Do not list on this schedule property that the decedent
held as a tenant in common, but report the value of
the interest on Schedule A (Form 706) if real estate,
or on the appropriate schedule if personal property.
Similarly, community property held by the decedent and
spouse should be reported on the appropriate Schedules
A through I of Form 706. The decedent’s interest in
a partnership should not be entered on this schedule
unless the partnership interest itself is jointly owned.
Solely owned partnership interests should be reported on
Schedule F (Form 706).
31
How to Complete Schedule E (Form 706)
Part I. Qualified joint interests. Under section 2040(b)
(2), a joint interest is a qualified joint interest if the
decedent and the surviving spouse held the interest as:
• Tenants by the entirety, or
• Joint tenants with right of survivorship if the decedent
and the decedent’s spouse are the only joint tenants.
Interests that meet either of the two requirements
above should be entered in Part I. Joint interests that do
not meet either of the two requirements above should be
entered in Part II.
Under column (ii), Description, describe the property as
required in the instructions for Schedules A, B, C, and F of
Form 706, for the type of property involved. For example,
jointly held stocks and bonds should be described using
the rules given in the instructions for Schedule B (Form
706).
Under column (v), Alternate value, and column (vi),
Value at date of death, enter the full value of the property.
Note: You cannot claim the special treatment under
section 2040(b) for property held jointly by a decedent and
a surviving spouse who is not a U.S. citizen. Report these
joint interests on Part II of Schedule E (Form 706), not Part
I.
Part II. All other joint interests. All joint interests that
were not entered in Part I must be entered in Part II.
For each item of property, enter the appropriate letter A,
B, C, etc., from line 6a to indicate the name and address
of the surviving co-tenant.
Under column (iii), Description, describe the property
as required in the instructions for Schedules A, B, C, and F
of Form 706 for the type of property involved.
Under column (v), Percentage includible, enter the
percentage of the total value of the property included in
the gross estate.
Generally, you must include the full value of the jointly
owned property in the gross estate. However, the full value
should not be included if you can show that a part of
the property originally belonged to the other tenant(s) and
was never received or acquired by the other tenant(s) from
the decedent for less than adequate and full consideration
in money or money’s worth. Full value of jointly owned
property also does not have to be included in the gross
estate if you can show that any part of the property was
acquired with consideration originally belonging to the
surviving joint tenant(s). In this case, you may exclude
from the value of the property an amount proportionate
to the consideration furnished by the other tenant(s).
Relinquishing or promising to relinquish dower, curtesy,
or statutory estate created instead of dower or curtesy, or
other marital rights in the decedent’s property or estate
is not consideration in money or money’s worth. See the
Schedule A (Form 706) instructions for the value to show
for real property that is subject to a mortgage.
If the property was acquired by the decedent and
another person or persons by gift, bequest, devise, or
inheritance as joint tenants, and their interests are not
otherwise specified by law, include only that part of the
32
value of the property that is figured by dividing the full
value of the property by the number of joint tenants.
If you believe that less than the full value of the entire
property is includible in the gross estate for tax purposes,
you must establish the right to include the smaller value
by attaching proof of the extent, origin, and nature of the
decedent’s interest and the interest(s) of the decedent’s
co-tenant(s).
Under column (vi), Includible alternate value, and
column (vii), Includible value at date of death, enter only
the values that you believe are includible in the gross
estate.
Schedule F—Other Miscellaneous
Property
Caution: If any assets to which the special rule
of Regulations section 20.2010-2(a)(7)(ii) applies are
reported on this schedule, do not enter any value in the
last three columns. See the instructions for Part V, Item 10,
for information on how to estimate and report the value of
these assets.
You must complete Schedule F (Form 706) and file
it with the return. On Schedule F (Form 706), list all
items that must be included in the gross estate that are
not reported on any other schedule, including:
• Debts due the decedent (other than notes and
mortgages included on Schedule C (Form 706));
• Interests in business;
• Any interest in an Archer medical savings account
(MSA) or health savings account (HSA), unless such
interest passes to the surviving spouse;
• Insurance on the life of another (obtain and attach
Form 712, for each policy) (see Note below);
• Section 2044 property (see Decedent Who Was a
Surviving Spouse, later);
• Claims (including the value of the decedent’s interest
in a claim for refund of income taxes or the amount of
the refund actually received);
• Rights;
• Digital assets are any digital representations of
value that are recorded on a cryptographically
secured distributed ledger or any similar technology.
For example, digital assets include nonfungible
tokens (NFTs) and virtual currencies, such as
cryptocurrencies and stablecoins. If a particular asset
has the characteristics of a digital asset, it will be
treated as a digital asset for federal transfer tax
purposes;
• Royalties;
• Leaseholds;
• Judgments;
• Reversionary or remainder interests;
• Shares in trust funds (attach a copy of the trust
instrument);
• Household goods and personal effects, including
wearing apparel;
• Farm products and growing crops;
• Livestock;
• Farm machinery; and
• Automobiles.
Instructions for Form 706 (Rev. 7-2026)
Note (for single premium or paid-up policies). In
certain situations (for example, where the surrender value
of the policy exceeds its replacement cost), the true
economic value of the policy will be greater than the
amount shown on Form 712, line 59. In these situations,
report the full economic value of the policy on Schedule F
(Form 706). See Rev. Rul. 78-137, 1978-1 C.B. 280, for
details.
Interests. If the decedent owned any interest in
a partnership or unincorporated business, attach a
statement of assets and liabilities for the valuation date
and for the 5 years before the valuation date. Also, attach
statements of the net earnings for the same 5 years. Be
sure to include the EIN of the entity. You must account
for goodwill in the valuation. In general, furnish the same
information and follow the methods used to value close
corporations. See the instructions for Schedule B (Form
706).
All partnership interests should be reported on
Schedule F (Form 706) unless the partnership interest is
jointly owned. Jointly owned partnership interests should
be reported on Schedule E (Form 706).
If real estate is owned by a sole proprietorship, it
should be reported on Schedule F (Form 706) and not
on Schedule A (Form 706). Describe the real estate with
the same detail required for Schedule A (Form 706).
Valuation discounts. If you answered “Yes” to Form
706, Part IV, line 11b, for any interest in a partnership, an
unincorporated business, an LLC, or stock in a closely
held corporation, attach a statement that lists the line
number and item number from Schedule F (Form 706)
and identifies the total effective discount taken (that is,
XX.XX%) on such interest.
Decedent Who Was a Surviving Spouse
If the decedent was a surviving spouse, the decedent
may have received qualified terminable interest property
(QTIP) from the predeceased spouse for which the
marital deduction was elected either on the predeceased
spouse’s estate tax return or on a gift tax return, Form
709. The election is available for transfers made and
decedents dying after December 31, 1981. List such
property on Schedule F (Form 706).
If this election was made and the surviving spouse
retained interest in the QTIP property at death, the full
value of the QTIP property is includible in the estate, even
though the qualifying income interest terminated at death.
It is valued as of the date of the surviving spouse’s death,
or alternate valuation date, if applicable. Do not reduce the
value by any annual exclusion that may have applied to
the transfer creating the interest.
The value of such property included in the surviving
spouse’s gross estate is treated as passing from the
surviving spouse. It therefore qualifies for the charitable
and marital deductions on the surviving spouse’s estate
tax return if it meets the other requirements for those
deductions.
For additional details, see Regulations section
20.2044-1.
Example of effective discount:
a
Pro-rata value of LLC (before any discounts)
$100.00
b
Minus: 10% discounts for lack of control
(10.00)
c
Marketable minority interest value (as if freely traded
minority interest value)
$90.00
d
Minus: 15% discount for lack of marketability
(13.50)
e
Nonmarketable minority interest value
$76.50
Calculation of effective discount:
(a minus e) divided by a = effective discount
($100.00 - $76.50) ÷ $100.00 = 23.50%
Note: The amount of discounts are based on the factors
pertaining to a specific interest and those discounts
shown in the example are for demonstration purposes
only.
If you answered “Yes” to Form 706, Part IV, line 11b,
for any transfer(s) described in (1) through (5) in the
Schedule G (Form 706) instructions (and made by the
decedent), attach a statement to Schedule G (Form
706) that lists the line number and item number from that
schedule and identifies the total effective discount taken
(that is, XX.XX%) on such transfer(s).
Instructions for Form 706 (Rev. 7-2026)
Line 1. If the decedent owned at the date of death works
of art or items with collectible value (for example, jewelry,
furs, silverware, books, statuary, vases, oriental rugs, coin
or stamp collections), check the “Yes” box on line 1 and
provide full details on line 4. If any item or collection
of similar items is valued at more than $3,000, attach
an appraisal by an expert under oath and the required
statement regarding the appraiser’s qualifications (see
Regulations section 20.2031-6(b)).
Schedule G—Transfers During the
Decedent’s Lifetime
Caution: If any assets to which the special
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