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Line 7 Worksheet — Gift Tax on Gifts Made After 1976

Calendar year or

Total taxable gifts for

calendar quarter

prior periods (from Form

Taxable gifts for this

709, Part 2, Tax

Unused unified credit

period (from Form 709,

Tax payable using

Tax payable for this

Computation, line 2)

(applicable credit amount)

Part 2, Tax Computation,

Table A

period (subtract col.

for this period

Total pre-1977 taxable

line 1)

(see below)

e from col. d)

(see below)

gifts. Enter the amount

(see below)

from line 1, Worksheet

Total gift taxes payable on gifts made after 1976 (combine the amounts in column f) . . . . . . . . . . . . . . . . . . . . . . . . .

Gift taxes paid by the decedent on gifts that qualify for “special treatment.” Enter the amount from line 2, column e,

Worksheet TG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Subtract line 2 from line 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Gift tax paid by decedent’s spouse on split gifts included on Schedule G. Enter the amount from line 2, column f,

Worksheet TG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Add lines 3 and 4. Enter here and on line 7 of the Tax Computation of Form 706 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Columns b and c. In addition to gifts reported on Form 709, you must include in these columns any taxable gifts in excess of the annual

exclusion that were not reported on Form 709.

Column d. To figure the “tax payable” for this column, you must use Table A in these instructions, as it applies to the year of the decedent’s

death rather than to the year the gifts were actually made. To compute the entry for column d, you should figure the “tax payable” on the

amount in column b and subtract it from the “tax payable” on the amounts in columns b and c added together. Enter the difference in

column d.

“Tax payable” as used here is a hypothetical amount and does not necessarily reflect tax actually paid. Figure “tax payable” only on gifts

made after 1976. Do not include any tax paid or payable on gifts made before 1977. However, if the decedent made taxable gifts before

January 1, 1977, a special computation is required. The amount of gift tax payable (line 7) should be determined by applying the unified rate

schedule, in effect at date of death, to the cumulative lifetime taxable transfers made both before January 1, 1977, and after December 31,

1976, and then subtracting the taxes payable on the lifetime transfers made before December 31, 1976.

To calculate the tax, enter the amount for the appropriate year from column c of the worksheet on line 1 of the Tax Computation of the

Form 709. Enter the amount from column b on line 2 of the Tax Computation. Complete the Tax Computation through the tax due before

any reduction for the unified credit (applicable credit amount) and enter that amount in column d, above.

Column e. To figure the unused unified credit, (applicable credit amount), use the unified credit (applicable credit amount) in effect for the

year the gift was made. This amount should be on line 12 of the Tax Computation of the Form 709 filed for the gift.

SSNs (if applicable) on an attached

Note. You must complete Part

You may claim an anticipated

sheet.

2 — Tax Computation.

amount of deduction and figure the

federal estate tax on the return before

Line 6b. Executor’s Address

the state death taxes have been paid.

Line 1

However, the deduction cannot be

Use Form 8822, Change of Address, to

If you elected alternate valuation on line

finally allowed unless you pay the state

report a change of the executor’s

1, Part 3 — Elections by the Executor,

death taxes and claim the deduction

address.

enter the amount you entered in the

within 4 years after the return is filed, or

“Alternate value” column of item 12 of

later (see section 2058(b)) if:

Line 6c. Executor’s Social

•

Part 5 — Recapitulation. Otherwise,

A petition is filed with the Tax Court

Security Number

enter the amount from the “Value at

of the United States,

•

date of death” column.

Only individual executors should

You have an extension of time to

complete this line. If there is more than

pay, or

Line 3b. State Death Tax

•

one individual executor, all should list

You file a claim for refund or credit of

their social security numbers on an

Deduction

an overpayment which extends the

attached sheet.

deadline for claiming the deduction.

The estates of decedents dying

Note. The deduction is subject to no

after December 31, 2004 will be

dollar limits.

Part 2—Tax

allowed a deduction for state

CAUTION

If you make a section 6166 election

death taxes, instead of a credit. The

Computation (Page 1 of

to pay the federal estate tax in

state death tax credit is repealed,

installments and make a similar election

effective January 1, 2005.

Form 706)

to pay the state death tax in

installments, see section 2058(b) for

In general, the estate tax is figured by

You may take a deduction on line 3b

exceptions and periods of limitation.

applying the unified rates shown in

for estate, inheritance, legacy, or

Table A on page 4 to the total of

succession taxes paid as the result of

If you transfer property other than

transfers both during life and at death,

the decedent’s death to any state or the

cash to the state in payment of state

and then subtracting the gift taxes.

District of Columbia.

inheritance taxes, the amount you may

-5-

Part Instructions

Instructions For Form 706 - United States Estate (And Generation-Skipping Transfer) Tax Return - 2008 Page 5

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