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Example showing use of Schedule B where the alternate valuation is adopted; date of death, January 1, 2008

Item

Description, including face amount of bonds or number of shares and par value

Alternate

Value at

number

where needed for identification. Give CUSIP number. If trust, partnership, or

valuation

Alternate

date of

closely held entity, give EIN

Unit value

date

value

death

CUSIP number or

EIN, where

applicable

$60,000-Arkansas Railroad Co. first mortgage 4%, 20-year

bonds, due 2010. Interest payable quarterly on Feb. 1, May

1, Aug. 1 and Nov. 1; N.Y. Exchange . . . . . . . . . . . . . . . . XXXXXXXXX

100

- - - - - -

$- - - - - -

$ 60,000

$30,000 of item 1 distributed to legatees on Apr. 1, 2008 . .

4/1/08

29,700

- - - - - -

$30,000 of item 1 sold by executor on May 2, 2008 . . . . . .

5/1/08

29,400

- - - - - -

Interest coupons attached to bonds, item 1, due and

payable on Nov. 1, 2007, but not cashed at date of death.

Cashed by executor on Feb. 1, 2008 . . . . . . . . . . . . . . . .

- - - - - -

2/1/08

600

Interest accrued on item 1, from Nov. 1, 2007 to Jan. 1,

2008. Cashed by executor on Feb. 1, 2008 . . . . . . . . . . . .

- - - - - -

2/1/08

400

500 shares Public Service Corp., common; N.Y. Exchange

XXXXXXXXX

110

- - - - - -

55,000

Not disposed of within 6 months following death . . . . . . . .

7/1/08

45,000

- - - - - -

Dividend on item 2 of $2 per share declared Dec. 10, 2007,

paid on Jan. 10, 2008, to holders of record on Dec. 30, 2007

- - - - - -

1/10/08

1,000

on major exchanges and many unlisted

asked prices are available within a

If the security was listed on more

securities. Usually, the CUSIP number

reasonable period of time before the

than one stock exchange, use either

is printed on the face of the stock

valuation date but not after the

the records of the exchange where the

certificate. If the CUSIP number is not

valuation date, or vice versa, use the

security is principally traded or the

printed on the certificate, it may be

mean between the highest and lowest

composite listing of combined

obtained through the company’s

sales prices or bid and asked prices as

exchanges, if available, in a publication

transfer agent.

the FMV.

of general circulation. In valuing listed

stocks and bonds, you should carefully

For example, assume that sales of

Valuation

check accurate records to obtain values

stock nearest the valuation date (June

for the applicable valuation date.

List the fair market value (FMV) of the

15) occurred 2 trading days before

stocks or bonds. The FMV of a stock or

(June 13) and 3 trading days after

If you get quotations from brokers, or

bond (whether listed or unlisted) is the

(June 18). On those days, the mean

evidence of the sale of securities from

mean between the highest and lowest

sale prices per share were $10 and

the officers of the issuing companies,

selling prices quoted on the valuation

$15, respectively. Therefore, the price

attach to the schedule copies of the

date. If only the closing selling prices

of $12 is considered the FMV of a

letters furnishing these quotations or

are available, then the FMV is the

share of stock on the valuation date. If,

evidence of sale.

mean between the quoted closing

however, on June 13 and 18, the mean

selling price on the valuation date and

sale prices per share were $15 and

Schedule C—Mortgages,

on the trading day before the valuation

$10, respectively, the FMV of a share

date.

of stock on the valuation date is $13.

Notes, and Cash

If there were no sales on the

If only closing prices for bonds are

See the reverse side of Schedule C on

valuation date, figure the FMV as

available, see Regulations section

follows.

Form 706.

20.2031-2(b).

1. Find the mean between the

Apply the rules in the section 2031

highest and lowest selling prices on the

Schedule D—Insurance

regulations to determine the value of

nearest trading date before and the

inactive stock and stock in close

on the Decedent’s Life

nearest trading date after the valuation

corporations. Send with the schedule

date. Both trading dates must be

See the reverse side of Schedule D on

complete financial and other data used

reasonably close to the valuation date.

to determine value, including balance

Form 706.

2. Prorate the difference between

sheets (particularly the one nearest to

the mean prices to the valuation date.

the valuation date) and statements of

Schedule E—Jointly

3. Add or subtract (whichever

the net earnings or operating results

applies) the prorated part of the

Owned Property

and dividends paid for each of the 5

difference to or from the mean price

years immediately before the valuation

figured for the nearest trading date

See the reverse side of Schedule E on

date.

before the valuation date.

Form 706.

Securities reported as of no value,

If no actual sales were made

nominal value, or obsolete should be

Schedule F—Other

reasonably close to the valuation date,

listed last. Include the address of the

make the same computation using the

company and the state and date of the

Miscellaneous Property

mean between the bona fide bid and

incorporation. Attach copies of

asked prices instead of sales prices. If

correspondence or statements used to

See the reverse side of Schedule F on

actual sales prices or bona fide bid and

determine the “no value.”

Form 706.

-14-

Instructions for Schedules

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2008 Page 14

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