IRS Form 706 is the United States Estate (and Generation-Skipping Transfer) Tax Return. The executor of a decedent's estate uses it to compute federal estate tax and, when applicable, generation-skipping transfer tax on direct skips. It can also be filed for certain elections, including portability.
Who May Need to File Form 706?
The filing requirement depends on the decedent's date of death, applicable exclusion amount, adjusted taxable gifts and other statutory rules. Because thresholds and rules can change, preparers should use the Form 706 instructions for the decedent's date of death rather than relying on an old dollar amount from a prior year.
Portability Can Create a Filing Reason
An estate may file Form 706 to elect portability of a deceased spouse's unused exclusion amount. The IRS instructions state that timely filing a complete Form 706 generally makes the portability election unless the estate opts out. Special relief procedures and deadlines can apply, so the current instructions and IRS guidance should be reviewed for the specific estate.
Form 706 Is Generally Time-Sensitive
Estate tax returns have filing deadlines tied to the date of death. Form 4768 is used for certain extensions of time to file and/or pay. A filing extension does not automatically mean every payment deadline is extended, so the estate's exact circumstances matter.
Information to Organize Before Preparation
- Decedent identification and date-of-death information
- Executor and representative information
- Asset values and valuation documentation
- Lifetime transfer and adjusted taxable gift history
- Debts, expenses, mortgages and liens
- Marital and charitable transfers
- Beneficiary and surviving spouse information
- Prior gift tax returns when relevant
- Portability and GST information when applicable
Why Software Helps After the Filing Question Is Resolved
Once the preparer determines that Form 706 is required or strategically appropriate, dedicated software can organize the return around the IRS schedule structure, calculations, elections and professional output. That is different from deciding whether the estate should file in the first place, which may require legal or tax advice.
Official IRS references: About Form 706 and current Form 706 instructions.