Instructions for Form 706 – United States Estate and Generation‑Skipping Transfer Tax Return

Last reviewed: 2025-10-26

Use the Form 706 Instructions Tax Form Calculator Form 706 Instructions as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 706 Instructions state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

The Instructions for Form 706 provide detailed guidance for executors completing the estate tax return for a U.S. decedent. They cover filing requirements, asset valuations, deductions, elections (like portability of the deceased spouse’s unused exclusion), and generation-skipping transfer (GST) allocations. These instructions are essential for ensuring accurate and compliant reporting.

Key elements explained in the instructions:

Who must file: Estates exceeding the filing threshold or making a DSUE portability election.
Due dates: Return is due 9 months from the decedent’s date of death; extension available via Form 4768.
Schedules A–U guidance: Asset-specific instructions for real estate, stocks, IRAs, life insurance, debts, and deductions.
Valuation rules: Guidance on fair market valuation, alternate valuation date under Section 2032, and discounts (e.g., minority interest, lack of marketability).
GST overview: How to allocate GST exemption and calculate GST tax for transfers to skip persons.

Instructions for Form 706-QDT
Column A Taxable amount over		Column B Taxable amount not over		Column C Tax on amount in Column A		Column D Rate of tax on excess over amount in Column A
$		$		$		% % % % % % % % % % % %
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	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 col. b for gifts included in the gross estate	d. Taxable amount included in col. b for gifts that qualify for “special treatment of split gifts” described below	e. Gift tax paid by decedent on gifts in col. d		f. Gift tax paid by decedent’s spouse on gifts in col. c
	1. Total taxable gifts made before 1977
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						1
2	Taxable gifts made after 1976 reportable on Schedule G. 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 Part 2—Tax Computation, line 4						5
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 Period		Pre-1977
(b)	Taxable Gifts for Applicable Period
(c)	Taxable Gifts for Prior Periods
(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))
(f)	Tax at Date of Death Rates for Cumulative 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 from Prior Periods and Applicable Period (from Line 2 of Schedule C of Applicable Period Form 709)
(i)	Basic Exclusion for Applicable Period (Enter the amount from the Table of Basic Exclusion Amounts)
(j)	Basic Exclusion amount plus Total DSUE applied in Prior Periods and Applicable Period (add Row (h) and Row (i))
(k)	Maximum Applicable Credit amount based on Row (j) (Using Table A—Unified Rate Schedule)
(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, col. (e).
3	Subtract line 2 from line 1.
4	Gift tax paid by decedent's spouse on split gifts included on Schedule G. Enter amount from Worksheet TG, line 2, col. (f).
5	Add lines 3 and 4. Enter here and on Part 2—Tax Computation, line 7.
6	Cumulative lifetime gifts on which tax was paid or payable. Enter this amount on line 3, Section C, Part 6 of Form 706 (sum of amounts in Row (r)).
Footnotes: 1 Row (a): For annual returns, enter the tax period as (YYYY). For quarterly returns enter tax period as (YYYY–Q). 2 Row (c): Enter amount from Row (d) of the previous column. 3 Row (e): Enter amount from Row (f) of the previous column. 4 Row (k): Calculate 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 percent of any amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977.)
Taxable Gift Amount Table
Line 3 Worksheet—Adjusted Gross Estate
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
						% % % % % % % % % % % %
Table of Basic Exclusion Amounts
Period			Basic Exclusion Amount		Credit Equivalent at 2016 rates
			$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $		$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $
1	What is 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))?
2	What is the value of the gross estate (Form 706, page 3, Part 5, line 13)?
3	Add lines 18, 19, and 20 from Form 706, page 3, Part 5
4	Subtract line 3 from line 2 to calculate the adjusted gross estate
5	Divide line 1 by line 4 to calculate 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 , the estate does not qualify to make the election under section 6166
6	Multiply line 5 by the amount on line 16 of Form 706, page 1, Part 2. 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.)
Table of Estimated Values
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			But less than or equal to		Include this amount on lines 10 and 23:
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
$			$		$
Schedule A–Example 1
In this example, alternate valuation is not adopted; the date of death is January 1, 2016.
Item number	Description			Alternate valuation date	Alternate value		Value at date of death
1	House and lot, 1921 William Street, NW, Washington, DC (lot 6, square 481). Rent of $ 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, 2015, but not collected at date of death Rent accrued on Item 1 for November and December 2015
	Rent accrued on Item 1 for November and December 2015
2	House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $ payable monthly. Value based on appraisal, copy of which is attached
	Rent due on Item 2 for December 2015, but not collected at death .
Schedule A–Example 2
In this example, alternate valuation is adopted; the date of death is January 1, 2016.
Item number	Description			Alternate valuation date	Alternate value		Value at date of death
1	House and lot, 1921 William Street, NW, Washington, DC (lot 6, square 481). Rent of $ 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, 2015, but not collected until February 1, 2016
	Rent accrued on Item 1 for November and December 2015, collected on February 1, 2016
2	House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $ payable monthly. Value based on appraisal, copy of which is attached. Property exchanged for farm on May 1, 2016
	Rent due on Item 2 for December 2015, but not collected until February 1, 2016
Schedule B Examples
Example showing use of Schedule B where the alternate valuation is not adopted; date of death, January 1, 2016
Item number	Description, including face amount of bonds or number of shares and par value where needed for identification. Give CUSIP number. If trust, partnership, or closely-held entity, give EIN.		Unit value	Alternate valuation date	Alternate value		Value at date of death
		CUSIP number or EIN, where applicable
1	$-Arkansas Railroad Co. first mortgage 4%, 20-year bonds, due 2017. Interest payable quarterly on Feb. 1, May 1, Aug. 1, and Nov. 1; N.Y. Exchange	XXXXXXXXX			$		$
	Interest coupons attached to bonds, item 1, due and payable on Nov. 1, 2015, but not cashed at date of death
	Interest accrued on item 1, from Nov. 1, 2015, to Jan. 1, 2016
2	500 shares Public Service Corp., common; N.Y. Exchange	XXXXXXXXX
	Dividend on item 2 of $ per share declared Dec. 10, 2015, payable on Jan. 9, 2016, to holders of record on Dec. 30, 2015
Example showing use of Schedule B where the alternate valuation is adopted; date of death, January 1, 2016
Item number	Description, including face amount of bonds or number of shares and par value where needed for identification. Give CUSIP number. If trust, partnership, or closely-held entity, give EIN.		Unit value	Alternate valuation date	Alternate value		Value at date of death
		CUSIP number or EIN, where applicable
1	$-Arkansas Railroad Co. first mortgage %, 20-year bonds, due 2017. Interest payable quarterly on Feb. 1, May 1, Aug. 1, and Nov. 1; N.Y. Exchange	XXXXXXXXX			$		$
	$ of item 1 distributed to legatees on Apr. 1, 2016
	$ of item 1 sold by executor on May 1, 2016
	Interest coupons attached to bonds, item 1, due and payable on Nov. 1, 2015, but not cashed at date of death. Cashed by executor on Feb. 2, 2016
	Interest accrued on item 1, from Nov. 1, 2015, to Jan. 1, 2016. Cashed by executor on Feb. 2, 2016
1	500 shares Public Service Corp., common; N.Y. Exchange	XXXXXXXXX
	Not disposed of within 6 months following death .
	Dividend on item 2 of $ per share declared Dec. 10, 2015, paid on Jan. 9, 2016, to holders of record on Dec. 30, 2015
Example of effective discount:
a	Pro-rata value of limited liability company (before any discounts)						$
b	Minus: % discounts for lack of control						()
c	Marketable minority interest value (as if freely traded minority interest value)						$
d	Minus: % discount for lack of marketability						()
e	Non-marketable minority interest value						$
Calculation of effective discount:
(a minus e) divided by a = effective discount
($ - $) ÷ $ = %
Example—Listing Property Interests on Schedule M
Item number	Description of property interests passing to surviving spouse. For securities, give CUSIP number. If trust, partnership, or closely-held entity, give EIN.						Amount
	All other property:
B1	One-half the value of a house and lot, 256 South West Street, held by decedent and surviving spouse as joint tenants with right of survivorship under deed dated July 15, 1975 (Schedule E, Part I, item 1)						$
B2	Proceeds of Metropolitan Life Insurance Company policy No. 104729, payable in one sum to surviving spouse (Schedule D, item 3)
B3	Cash bequest under Paragraph Six of will
Period of Time Exceeding			Not Exceeding		Percent Allowable

Worksheet for Schedule Q—Credit for Tax on Prior Transfers
Part I Transferor’s tax on prior transfers							Total for all transfers (line 8 only)
Item			Transferor (From Schedule Q)
			A	B	C
1.	Gross value of prior transfer to this transferee
2.	Death taxes payable from prior transfer
3.	Encumbrances allocable to prior transfer
4.	Obligations allocable to prior transfer
5.	Marital deduction applicable to line 1 above, as shown on transferor’s Form 706
6.	TOTAL. Add lines 2, 3, 4, and 5
7.	Net value of transfers. Subtract line 6 from line 1
8.	Net value of transfers. Add columns A, B, and C of line 7
9.	Transferor’s tentative taxable estate (see line 3a, page 1, Form 706)
10.	Federal estate tax paid
11.	State death taxes paid
12.	Foreign death taxes paid
13.	Other death taxes paid
14.	TOTAL taxes paid. Add lines 10, 11, 12, and 13
15.	Value of transferor’s estate. Subtract line 14 from line 9
16.	Net federal estate tax paid on transferor’s estate
17.	Credit for gift tax paid on transferor’s estate with respect to pre-1977 gifts (section 2012)
18.	Credit allowed transferor’s estate for tax onprior transfers from prior transferor(s) who died within 10 years before death of decedent
19.	Tax on transferor’s estate. Add lines 16, 17, and 18
20.	Transferor’s tax on prior transfers ((line 7 ÷ line 15) × line 19 of respective estates)
Part II Transferee’s tax on prior transfers
Item								Amount
21.	Transferee’s actual tax before allowance of credit for prior transfers (see instructions)						21
22.	Total gross estate of transferee from line 1 of the Tax Computation, page 1, Form 706						22
23.	Net value of all transfers from line 8 of this worksheet						23
24.	Transferee’s reduced gross estate. Subtract line 23 from line 22						24
25.	Total debts and deductions (not including marital and charitable deductions) (line 3b of Part 2—Tax Computation, page 1 and items 18, 19, and 20 of the Recapitulation, page 3, Form 706)				25
26.	Marital deduction from item 21, Recapitulation, page 3, Form 706 (see instructions)				26
27.	Charitable bequests from item 22, Recapitulation, page 3, Form 706				27
28.	Charitable deduction proportion ( [ line 23 ÷ (line 22 – line 25) ] × line 27 )				28
29.	Reduced charitable deduction. Subtract line 28 from line 27				29
30.	Transferee’s deduction as adjusted. Add lines 25, 26, and 29						30
31.	(a) Transferee’s reduced taxable estate. Subtract line 30 from line 24						31(a)
	(b) Adjusted taxable gifts						31(b)
	(c) Total reduced taxable estate. Add lines 31(a) and 31(b)						31(c)
32.	Tentative tax on reduced taxable estate				32
33.	(a) Post-1976 gift taxes paid		33(a)
	(b) Unified credit (applicable credit amount)		33(b)
	(c) Section 2012 gift tax credit		33(c)
	(d) Section 2014 foreign death tax credit		33(d)
	(e) Total credits. Add lines 33(a) through 33(d)				33(e)
34.	Net tax on reduced taxable estate. Subtract line 33(e) from line 32						34
35.	Transferee’s tax on prior transfers. Subtract line 34 from line 21						35
Year of transfer				GST exemption
				$ $ $ $ $ $ $ $ $ $ $ $ $
WORKSHEET (inclusion ratio):
1	Total estate and gift tax value of all of the property interests that passed to the trust
2	Estate taxes, state death taxes, and other charges actually recovered from the trust
3	GST taxes imposed on direct skips to skip persons other than this trust and borne by the property transferred to this trust
4	GST taxes actually recovered from this trust (from Schedule R, Part 2, line 8 or Schedule R-1, line 6)
5	Add lines 2 through 4
6	Subtract line 5 from line 1
7	Add columns C and D of line 9
8	Divide line 7 by line 6
9	Trust's inclusion ratio. Subtract line 8 from .000
Form		Recordkeeping	Learning about the law or the form	Preparing the form		Copying, assembling, and sending the form to the IRS
706
Schedule A
Schedule A-1
Schedule B
Schedule C
Schedule D
Schedule E
Schedule F
Schedule G
Schedule H
Schedule I
Schedule J
Schedule K
Schedule L
Schedule M
Schedule O
Schedule P
Schedule Q
Worksheet for Schedule Q
Schedule R
Schedule R-1
Schedule U
Schedule pc
Continuation Schedule

Additional features of the instructions include:

Step-by-step instructions for computing total gross estate and taxable estate.
Clarification on deductions: funeral expenses, mortgages, administration costs, charitable contributions, and marital deduction.
Instructions for Schedule R and R-1 for GST tax reporting, and DSUE election in Part 6, Section C.
Common errors to avoid, such as failure to document jointly held property or overstatement of deductions.

Last reviewed: 2025-10-26: If you believe this form requires an update, please contact us.

Executors should review the full instructions thoroughly and seek professional advice if needed. Errors in asset reporting, DSUE claims, or missed deadlines can result in penalties or tax inefficiencies. Access the official IRS instructions at irs.gov/instructions/i706.

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.