Enter the social security number assigned specifically to the decedent. You cannot use the social security number assigned to the decedent's spouse. If the decedent did not have a social security number, the executor should obtain one for the decedent by filing Form SS-5, Application for Social Security Card, with a local Social Security Administration office.

If there is more than one executor, enter the name of the executor to be contacted by the IRS. List the other executors' names, addresses, and SSNs (if applicable) on an attached sheet.

Use Form 8822, Change of Address, to report a change of the executor's address.

Only individual executors should complete this line. If there is more than one individual executor, all should list their social security numbers on an attached sheet.

If you elected alternate valuation on line 1, Part 3, Elections by the Executor, enter the amount you entered in the “Alternate value” column of item 12 of Part 5, Recapitulation. Otherwise, enter the amount from the “Value at date of death” column.

To figure the tentative tax on the amount on line 5, use Table A above.

Three worksheets are provided to help you compute the entries for these lines. You need not file these worksheets with your return but should keep them for your records. Worksheet TG—Taxable Gifts Reconciliation, below, allows you to reconcile the decedent's lifetime taxable gifts to compute totals that will be used for the line 4 worksheet below and the line 7 worksheet on page 5.

You must get all of the decedent's gift tax returns (Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return) before you complete Worksheet TG. The amounts you will enter on Worksheet TG can usually be derived from these returns as filed. However, if any of the returns were audited by the IRS, you should use the amounts that were finally determined as a result of the audits.

In addition, you must include in column b of Worksheet TG any gifts in excess of the annual exclusion made by the decedent (or on behalf of the decedent under a power of attorney) but for which no Forms 709 were filed. You must make a reasonable inquiry as to the existence of any such gifts. The annual exclusion for 1977 through 1981 was $3,000 per donee per year and $10,000 for years after 1981.

For tax years beginning after 1998 the annual $10,000 exclusion for gifts is indexed for inflation. For calendar year 2003, the annual exclusion for gifts is $11,000.

The applicable credit amount (formerly the unified credit), is $345,800 for the estates of decedents dying in 2003. The amount of the credit cannot exceed the amount of estate tax imposed.

If the decedent made gifts (including gifts made by the decedent's spouse and treated as made by the decedent by reason of gift splitting) after September 8, 1976, and before January 1, 1977, for which the decedent claimed a specific exemption, the unified credit (applicable credit amount) on this estate tax return must be reduced. The reduction is figured by entering 20% of the specific exemption claimed for these gifts.

Note: (The specific exemption was allowed by section 2521 for gifts made before January 1, 1977.)

If the decedent did not make any gifts between September 8, 1976, and January 1, 1977, or if the decedent made gifts during that period but did not claim the specific exemption, enter zero.

The estate of a decedent dying in 2003 must reduce by 50% the amount of the state death tax credit found in the table on page 6. This reduction is calculated on line 13.

You may take a credit on line 13 for estate, inheritance, legacy, or succession taxes paid as the result of the decedent's death to any state or the District of Columbia. However, see section 2053(d) and the related regulations for exceptions and limits if you elected to deduct the taxes from the value of the gross estate.

If you make a section 6166 election to pay the Federal estate tax in installments and make a similar election to pay the state death tax in installments, see Rev. Rul. 86-38, 1986-1 C.B. 296, for the method of computing the credit allowed with this Form 706.

If you have elected to extend the time to pay the tax on a reversionary or remainder interest, you may take a credit against that portion of the Federal estate tax for state death taxes attributable to the reversionary or remainder interest. The state death taxes must be paid and claimed before the expiration of the extended time for paying the estate tax.

The credit may not be more than 50% of the amount figured by using Table B on page 6, based on the value of the adjusted taxable estate. The adjusted taxable estate is the amount of the Federal taxable estate (line 3 of the Tax Computation) reduced by $60,000. You may claim an anticipated amount of credit and figure the Federal estate tax on the return before the state death taxes have been paid. However, the credit cannot be finally allowed unless you pay the state death taxes and claim the credit within 4 years after the return is filed (or later as provided by the Code if a petition is filed with the Tax Court of the United States, or if you have an extension of time to pay) and submit evidence that the tax has been paid. If you claim the credit for any state death tax that is later recovered, see Regulations section 20.2016-1 for the notice you are required to give the IRS within 30 days.

If you transfer property other than cash to the state in payment of state inheritance taxes, the amount you may claim as a credit is the lesser of the state inheritance tax liability discharged or the fair market value of the property on the date of the transfer.

For more details, see Rev. Rul. 86-117, 1986-2 C.B. 157.

You should send the following evidence to the IRS:

You may take a credit for Federal gift taxes imposed by Chapter 12 of the Code, and the corresponding provisions of prior laws, on certain transfers the decedent made before January 1, 1977, that are included in the gross estate. The credit cannot be more than the amount figured by the following formula:

For more information, see the regulations under section 2012. This computation may be made using Form 4808, Computation of Credit for Gift Tax. Attach a copy of a completed Form 4808 or the computation of the credit. Also attach all available copies of Forms 709 filed by the decedent to help verify the amounts entered on lines 4, 7, and 15. You can get Form 4808 on the IRS Web Site at www.irs.gov.

You may not use these bonds to pay the GST tax.

See the example on page 12 showing the use of Schedule B where the alternate valuation is adopted.

Unless you elect at the time you file the return to adopt alternate valuation as authorized by section 2032, you must value all property included in the gross estate on the date of the decedent's death. Alternate valuation cannot be applied to only a part of the property.

You may elect special use valuation (line 2) in addition to alternate valuation.

You may not elect alternate valuation unless the election will decrease both the value of the gross estate and the total net estate and GST taxes due after application of all allowable credits.

You elect alternate valuation by checking “Yes” on line 1 and filing Form 706. Once made, the election may not be revoked. The election may be made on a late filed Form 706 provided it is not filed later than 1 year after the due date (including extensions).

If you elect alternate valuation, value the property that is included in the gross estate as of the applicable dates as follows:

The property included in the alternate valuation and valued as of 6 months after the date of the decedent's death, or as of some intermediate date (as described above) is the property included in the gross estate on the date of the decedent's death. Therefore, you must first determine what property constituted the gross estate at the decedent's death.

As part of each Schedule A through I, you must show:

Distributions, sales, exchanges, and other dispositions of the property within the 6-month period after the decedent's death must be supported by evidence. If the court issued an order of distribution during that period, you must submit a certified copy of the order as part of the evidence. The IRS may require you to submit additional evidence if necessary.

If the alternate valuation method is used, the values of life estates, remainders, and similar interests are figured using the age of the recipient on the date of the decedent's death and the value of the property on the alternate valuation date.

The total value of the property valued under section 2032A may not be decreased from FMV by more than $840,000 for decedents dying in 2003.

Real property may qualify for the section 2032A election if:

For this purpose, adjusted value is the value of property determined without regard to its special-use value. The value is reduced for unpaid mortgages on the property or any indebtedness against the property, if the full value of the decedent's interest in the property (not reduced by such mortgage or indebtedness) is included in the value of the gross estate. The adjusted value of the qualified real and personal property used in different businesses may be combined to meet the 50% and 25% requirements.

If the gross estate includes an interest in a closely held business, you may be able to elect to pay part of the estate tax in installments.

The maximum amount that can be paid in installments is that part of the estate tax that is attributable to the closely held business. In general, that amount is the amount of tax that bears the same ratio to the total estate tax that the value of the closely held business included in the gross estate bears to the total gross estate.

You may also elect to pay GST taxes in installments. See section 6166(i).

For details of this election, see section 6163 and the related regulations.

Complete line 4 whether or not there is a surviving spouse and whether or not the surviving spouse received any benefits from the estate. If there was no surviving spouse on the date of decedent's death, enter “None” in line 4a and leave lines 4b and 4c blank. The value entered in line 4c need not be exact. See the instructions for “Amount” under line 5, below.

If you answered “Yes,” these assets must be shown on Schedule F.

Section 2044 property is property for which a previous section 2056(b)(7) election (QTIP election) has been made, or for which a similar gift tax election (section 2523) has been made. For more information, see the instructions on the back of Schedule F.

If you checked “Yes” for either 8a or 8b, you must complete and attach Schedule D and attach a Form 712, Life Insurance Statement, for each policy and an explanation of why the policy or its proceeds are not includible in the gross estate.

If you answered “Yes” to line 10, you must include full details for partnerships and unincorporated businesses on Schedule F (Schedule E if the partnership interest is jointly owned). You must include full details for the stock of inactive or close corporations on Schedule B.

Value these interests using the rules of Regulations section 20.2031-2 (stocks) or 20.2031-3 (other business interests).

A “close corporation” is a corporation whose shares are owned by a limited number of shareholders. Often, one family holds the entire stock issue. As a result, little, if any, trading of the stock takes place. There is, therefore, no established market for the stock, and those sales that do occur are at irregular intervals and seldom reflect all the elements of a representative transaction as defined by the term “fair market value” (FMV).

If you answered “Yes” to either 12a or 12b, you must attach a copy of the trust instrument for each trust.

You must complete Schedule G if you answered “Yes” to 12a and Schedule F if you answered “Yes” to 12b.

Check “Yes” if property passes to the surviving spouse under a maximum marital deduction formula provision that meets the requirements of section 403(e)(3) of the Economic Recovery Tax Act of 1981 (P.L. 97-34; 95 Stat. 305).

If you check “Yes” to line 14, compute the marital deduction under the rules that were in effect before the Economic Recovery Tax Act of 1981.

For a format for this computation, you should obtain the November 1981 revision of Form 706 and its instructions. The computation is items 19 through 26 of the Recapitulation. You should also apply the rules of Rev. Rul. 80-148, 1980-1 C.B. 207, if there is property that passes to the surviving spouse outside of the maximum marital deduction formula provision.

Before completing Schedule B, read the examples showing use of Schedule B where the alternate valuation is not adopted (see page 11) and adopted (see above).

If the total gross estate contains any stocks or bonds, you must complete Schedule B and file it with the return.

On Schedule B list the stocks and bonds included in the decedent's gross estate. Number each item in the left-hand column. Bonds that are exempt from Federal income tax are not exempt from estate tax unless specifically exempted by an estate tax provision of the Code. Therefore, you should list these bonds on Schedule B.

Public housing bonds includible in the gross estate must be included at their full value.

If you paid any estate, inheritance, legacy, or succession tax to a foreign country on any stocks or bonds included in this schedule, group those stocks and bonds together and label them “Subjected to Foreign Death Taxes.”

List interest and dividends on each stock or bond separately. Indicate as a separate item dividends that have not been collected at death, but which are payable to the decedent or the estate because the decedent was a stockholder of record on the date of death. However, if the stock is being traded on an exchange and is selling ex-dividend on the date of the decedent's death, do not include the amount of the dividend as a separate item. Instead, add it to the ex-dividend quotation in determining the fair market value of the stock on the date of the decedent's death. Dividends declared on shares of stock before the death of the decedent but payable to stockholders of record on a date after the decedent's death are not includible in the gross estate for Federal estate tax purposes.

If the stock or bond is unlisted, show the company's principal business office.

The CUSIP (Committee on Uniform Security Identification Procedure) number is a nine-digit number that is assigned to all stocks and bonds traded on major exchanges and many unlisted securities. Usually, the CUSIP number is printed on the face of the stock certificate. If the CUSIP number is not printed on the certificate, it may be obtained through the company's transfer agent.

List the fair market value (FMV) of the stocks or bonds. The FMV of a stock or bond (whether listed or unlisted) is the mean between the highest and lowest selling prices quoted on the valuation date. If only the closing selling prices are available, then the FMV is the mean between the quoted closing selling price on the valuation date and on the trading day before the valuation date.

To figure the FMV if there were no sales on the valuation date:

If no actual sales were made reasonably close to the valuation date, make the same computation using the mean between the bona fide bid and asked prices instead of sales prices. If actual sales prices or bona fide bid and asked prices are available within a reasonable period of time before the valuation date but not after the valuation date, or vice versa, use the mean between the highest and lowest sales prices or bid and asked prices as the FMV.

For example, assume that sales of stock nearest the valuation date (June 15) occurred 2 trading days before (June 13) and 3 trading days after (June 18). On those days the mean sale prices per share were $10 and $15, respectively. Therefore, the price of $12 is considered the FMV of a share of stock on the valuation date. If, however, on June 13 and 18, the mean sale prices per share were $15 and $10, respectively, the FMV of a share of stock on the valuation date is $13.

If only closing prices for bonds are available, see Regulations section 20.2031-2(b).

Apply the rules in the section 2031 regulations to determine the value of inactive stock and stock in close corporations. Send with the schedule complete financial and other data used to determine value, including balance sheets (particularly the one nearest to the valuation date) and statements of the net earnings or operating results and dividends paid for each of the 5 years immediately before the valuation date.

Securities reported as of no value, nominal value, or obsolete should be listed last. Include the address of the company and the state and date of the incorporation. Attach copies of correspondence or statements used to determine the “no value.”

If the security was listed on more than one stock exchange, use either the records of the exchange where the security is principally traded or the composite listing of combined exchanges, if available, in a publication of general circulation. In valuing listed stocks and bonds, you should carefully check accurate records to obtain values for the applicable valuation date.

If you get quotations from brokers, or evidence of the sale of securities from the officers of the issuing companies, attach to the schedule copies of the letters furnishing these quotations or evidence of sale.

See Rev. Rul. 69-489, 1969-2 C.B. 172, for the special valuation rules for certain marketable U.S. Treasury Bonds (issued before March 4, 1971). These bonds, commonly called “flower bonds,” may be redeemed at par plus accrued interest in payment of the tax at any Federal Reserve bank, the office of the Treasurer of the United States, or the Bureau of the Public Debt, as explained in Rev. Proc. 69-18, 1969-2 C.B. 300.