The executor of a decedent’s estate uses Form 706 to figure the estate tax imposed by Chapter 11 of the Internal Revenue Code. Form 706 is also used to compute the generation-skipping transfer (GST) tax imposed by Chapter 13 on direct skips.
Here is the IRS publication explaining Form 706:
About Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return
From ChatGPT…
Understanding IRS Form 706: The U.S. Estate Tax Return
IRS Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is used to determine the estate tax owed to the federal government upon a person’s death. It is required for estates that exceed the federal estate tax exemption threshold, which is adjusted periodically for inflation. As of 2024, this exemption is $13.61 million per individual, meaning estates valued below this amount generally do not need to file Form 706.
Who Must File Form 706?
The executor or personal representative of an estate must file Form 706 if the gross estate, including all taxable gifts and certain deductions, exceeds the exemption amount. Estates seeking portability of the deceased spouse’s unused exemption (DSUE) must also file, even if no tax is due. This allows the surviving spouse to apply the unused exemption toward their own future estate tax liability.
Filing Process
Since estate tax laws are complex, many executors consult estate attorneys or accountants to ensure compliance. Proper filing of Form 706 helps settle the estate’s tax obligations efficiently, ensuring that the estate’s assets are distributed correctly.
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