Instructions For Form 706-Gs(T) - 2006 printable pdf download

Instructions for

Department of the Treasury

Internal Revenue Service

Form 706-GS(T)

(Rev. February 2006)

Generation-Skipping Transfer Tax Return for Terminations

Section references are to the Internal Revenue Code unless otherwise noted.

Trusts

What’s New

When To File

Nonexplicit trusts. An arrangement

•

Generally, the trustee must file Form

You can request an automatic

that has substantially the same effect

706-GS(T) by April 15th of the year

6-month extension of time to file Form

as a trust will be treated as a trust even

following the calendar year in which the

706-GS(T) by filing Form 7004,

though it is not an explicit trust.

termination occurs. If the due date falls

Application for Automatic 6-Month

Examples of such arrangements are

on a Saturday, Sunday, or legal

Extension of Time To File Certain

insurance and annuity contracts,

holiday, file on the next business day.

Business Income Tax, Information, and

arrangements involving life estates and

If you are not able to file the return

Other Returns (Rev. December 2005).

remainders, and estates for years.

by the due date, you may request an

Form 7004 replaces the use of Form

extension of time to file by filing Form

2758, Application for Extension of Time

In general, a transfer of property in

7004. The extension is automatic, so

To File Certain Excise, Income,

which the identity of the transferee is

you do not have to sign the form or

Information, and Other Returns. For

conditioned on the occurrence of an

provide a reason for your request. You

additional information, see Form 7004.

event is a transfer in trust. This rule

must file Form 7004 on or before the

•

does not apply to a testamentary trust,

New regulations relating to the

regular due date of Form 706-GS(T).

however, if the event is to occur within

predeceased parent rule have

See Form 7004 for more information.

6 months of the transferor’s date of

amended the rules used to determine

death.

an individual’s generation assignment

Terminations Subject to

for certain transfers occurring on or

GST Tax

Nonexplicit trusts do not include

after July 18, 2005. See Ninety-day rule

decedents’ estates.

on page 3, for more information.

A termination may occur by reason of

•

The 5% credit for certain state

death, lapse of time, release of a

In the case of a nonexplicit trust, the

power, or any other means.

generation-skipping transfer (GST)

person in actual or constructive

taxes no longer applies to GST

In general, all taxable terminations

possession of the property involved is

transfers made after December 31,

are subject to the GST tax. A taxable

considered the trustee and is liable for

2004. For more information, see section

termination is the termination of an

filing Form 706-GS(T).

2604.

interest in property held in trust unless:

•

If you are filing this return for a

Immediately after the termination, a

General Instructions

nonexplicit trust, see the instructions for

non-skip person has an interest in the

line 1b on page 3.

property; or

•

At no time after the termination may

Purpose of Form

Separate trusts. You must treat as

a distribution be made from the trust to

separate trusts:

a skip person.

Form 706-GS(T) is used by a trustee to

•

Portions of a trust that are

figure and report the tax due from

Exceptions

attributable to transfers from different

certain trust terminations that are

transferors, and

Irrevocable trusts. Except as

subject to the generation-skipping

•

Substantially separate and

described under Additions to

transfer (GST) tax.

independent shares of different

irrevocable trusts on page 2, the GST

beneficiaries in a trust.

tax does not apply to any termination of

Who Must File

an interest in a trust that was

In general, the trustee of any trust that

If you are the trustee for separate

irrevocable on September 25, 1985.

has a taxable termination (defined on

trusts as described above, you must file

Any trust in existence on September

this page) must file Form 706-GS(T) for

a single Form 706-GS(T) but separate

25, 1985, will be considered irrevocable

the tax year in which the termination

Schedules A for each separate trust, as

unless:

occurred.

that term is used here.

1. On September 25, 1985, the

settlor held a power with respect to

such trust that would have caused the

Where To File

value of the trust to be included in the

settlor’s gross estate for federal estate

tax purposes by reason of section 2038

File Form 706-GS(T) at the Internal Revenue Service Center listed below.

(regarding revocable transfers) if the

settlor had died on September 25,

If the settlor is (or was at death) a . . . Then the address is:

1985; or

Internal Revenue Service Center

2. Regarding a policy of life

insurance that is treated as a trust

Resident U.S. citizen or resident alien

Cincinnati, OH 45999

under section 2652(b), the insured

Nonresident U.S. citizen or alien

Philadelphia, PA 19255

possessed an incident of ownership on

September 25, 1985, that would have

Cat. No. 10829R

Instructions For Form 706-Gs(T) - 2006

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