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If the transferee was the transferor’s

consideration in computing estate tax

Line 5. Enter on line 5 the applicable

surviving spouse, no credit is allowed

(a) or estate tax (b), above.

marital deduction claimed for the

for property received from the transferor

transferor’s estate (from the transferor’s

Percent Allowable

to the extent that a marital deduction

Form 706).

was allowed to the transferor’s estate

Lines 10 through 18. Enter on these

Where transferee predeceased the

for the property. There is no credit for

lines the appropriate taxes paid by the

transferor. If not more than 2 years

tax on prior transfers for federal gift

transferor’s estate.

elapsed between the dates of death,

taxes paid in connection with the

the credit allowed is 100% of the

If the transferor’s estate elected to

transfer of the property to the

maximum amount. If more than 2 years

pay the federal estate tax in

transferee.

elapsed between the dates of death, no

installments, enter on line 10 only the

credit is allowed.

total of the installments that have

If you are claiming a credit for tax on

actually been paid at the time you file

prior transfers on Form 706-NA, you

Where transferor predeceased the

this Form 706. See Rev. Rul. 83-15,

should first complete and attach Part

transferee. The percent of the

1983-1 C.B. 224, for more details. Do

5 — Recapitulation from Form 706

maximum amount that is allowed as a

not include as estate tax any tax

before computing the credit on

credit depends on the number of years

attributable to section 4980A, before its

Schedule Q from Form 706.

that elapsed between dates of death. It

repeal by the Taxpayer Relief Act of

is determined using the following table:

Section 2056(d)(3) contains specific

1997.

rules for allowing a credit for certain

Period of

Line 21. Add lines 11 (allowable

transfers to a spouse who was not a

Time

Not

Percent

unified credit) and 13 (foreign death

U.S. citizen where the property passed

Exceeding

Allowable

taxes credit) of Part 2 — Tax

outright to the spouse, or to a qualified

Computation to the amount of any

- - - - -

2 years

100

domestic trust.

credit taken (on line 15) for federal gift

2 years

4 years

taxes on pre-1977 gifts (section 2012).

4 years

6 years

Property

Subtract this total from Part 2 — Tax

6 years

8 years

The term “property” includes any

Computation, line 8. Enter the result on

8 years

10 years

interest (legal or equitable) of which the

line 21 of the worksheet.

10 years

- - - - -

none

transferee received the beneficial

Line 26. If you computed the marital

ownership. The transferee is

deduction using the unlimited marital

considered the beneficial owner of

How To Compute the Credit

deduction in effect for decedents dying

property over which the transferee

after 1981, for purposes of determining

A worksheet for Schedule Q is provided

received a general power of

on page 31 of these instructions to

the marital deduction for the reduced

appointment. Property does not include

gross estate, see Rev. Rul. 90-2,

allow you to compute the limits before

interests to which the transferee

1990-1 C.B. 169. To determine the

completing Schedule Q. Transfer the

received only a bare legal title, such as

appropriate amounts from the

“reduced adjusted gross estate,”

that of a trustee. Neither does it include

subtract the amount on line 25 of the

worksheet to Schedule Q as indicated

an interest in property over which the

on the schedule. You do not need to file

Schedule Q Worksheet from the

transferee received a power of

amount on line 24 of the worksheet. If

the worksheet with your Form 706, but

appointment that is not a general power

community property is included in the

should keep it for your records.

of appointment. In addition to interests

amount on line 24 of the worksheet,

Cases involving transfers from two

in which the transferee received the

compute the reduced adjusted gross

or more transferors. Part I of the

complete ownership, the credit may be

estate using the rules of Regulations

worksheet and Schedule Q enable you

allowed for annuities, life estates, terms

section 20.2056(c)-2 and Rev. Rul.

to compute the credit for as many as

for years, remainder interests (whether

76-311, 1976-2 C.B. 261.

three transferors. The number of

contingent or vested), and any other

transferors is irrelevant to Part II of the

interest that is less than the complete

Schedules R and

worksheet. If you are computing the

ownership of the property, to the extent

credit for more than three transferors,

R-1—Generation-Skipping

that the transferee became the

use more than one worksheet and

beneficial owner of the interest.

Transfer Tax

Schedule Q, Part I, and combine the

Maximum Amount of the

totals for the appropriate lines.

Introduction and Overview

Credit

Section 2032A additional tax. If the

Schedule R is used to compute the

transferor’s estate elected special-use

The maximum amount of the credit is

generation-skipping transfer (GST) tax

valuation and the additional estate tax

the smaller of:

that is payable by the estate. Schedule

of section 2032A(c) was imposed at

1. The amount of the estate tax of

R-1 (Form 706) is used to compute the

any time up to 2 years after the death

the transferor’s estate attributable to the

GST tax that is payable by certain

of the decedent for whom you are filing

transferred property or

trusts that are includible in the gross

this return, check the box on Schedule

2. The amount by which:

estate.

Q. On lines 1 and 9 of the worksheet,

a. An estate tax on the transferee’s

include the property subject to the

The GST tax that is to be reported

estate determined without the credit for

additional estate tax at its FMV rather

on Form 706 is imposed only on “direct

tax on prior transfers, exceeds

than its special-use value. On line 10 of

skips occurring at death.” Unlike the

the worksheet, include the additional

b. An estate tax on the transferee’s

estate tax, which is imposed on the

estate determined by excluding from

estate tax paid as a federal estate tax

value of the entire taxable estate

paid.

the gross estate the net value of the

regardless of who receives it, the GST

transfer.

tax is imposed only on the value of

How To Complete the

interests in property, wherever located,

If credit for a particular foreign death

Schedule Q Worksheet

that actually pass to certain transferees,

tax may be taken under either the

who are referred to as “skip persons.”

statute or a death duty convention, and

Most of the information to complete

on this return the credit actually is taken

Part I of the worksheet should be

For purposes of Form 706, the

under the convention, then no credit for

obtained from the transferor’s Form

property interests transferred must be

that foreign death tax may be taken into

706.

includible in the gross estate before

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Instructions for Schedules

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2008 Page 23

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