| Instructions for Form 706 |
2006 Tax Year |
Instructions for Form 706 - Introductory Material
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Prior Revisions of Form 706
| After |
For Decedents Dying
and
|
Before |
Use Revision of
Form 706
Dated |
|
October 8, 1990
|
|
January 1, 1998
|
April 1997
|
|
December 31, 1997
|
|
January 1, 1999
|
July 1998
|
|
December 31, 1998
|
|
January 1, 2001
|
July 1999
|
|
December 31, 2000
|
|
January 1, 2002
|
November 2001
|
|
December 31, 2001
|
|
January 1, 2003
|
August 2002
|
|
December 31, 2002
|
|
January 1, 2004
|
August 2003
|
|
December 31, 2003
|
|
January 1, 2005
|
August 2004
|
|
December 31, 2004
|
|
January 1, 2006
|
August 2005
|
-
Use this revision of Form 706 only for the estates of decedents dying in calendar year 2006.
-
The maximum tax rate for the estates of decedents dying in 2006 has decreased to 46%.
-
The executor must now file Form 706 at the Cincinnati Service Center, regardless of whether the decedent was a U.S. citizen
residing in the
U.S., a resident alien, or a nonresident U.S. citizen. See Where To File on page 2 for the address.
-
The Pension Protection Act of 2006 (PPA) has amended the provisions used to determine substantial and gross misstatements
of valuation of
property. The PPA applies to returns filed after August 17, 2006. See Penalties, Valuation understatement on page 3 and section 6662 for
more details.
-
The state death tax credit has been repealed for estates of decedents dying after December 31, 2004. Beginning in 2005, the
credit has been
replaced with a state death tax deduction against the value of the gross federal estate. See Line 3b. State Death Tax Deduction on page 5
for details.
-
Various dollar amounts and limitations relevant to Form 706 are indexed for inflation. For decedents dying in 2006, the following
amounts
have increased:
| (a) the annual exclusion for gifts of present interests made to a donee is $12,000; |
| (b) the ceiling on special-use valuation is $900,000; and |
| (c) the amount used in computing the 2% portion of estate tax payable in installments is $1,200,000. |
The IRS will publish amounts for future years in an annual revenue procedure.
-
Beginning with the estates of decedent's dying and generation-skipping transfers occurring after December 31, 2003, the generation-skipping
transfer (GST) exemption is equal to the applicable exclusion amount. For 2006, that amount is $2,000,000.
-
You can request an automatic 6-month extension of time to file Form 706 by filing Form 4768, Application for Extension of
Time To File a
Return and/or Pay U.S. Estate (and Generation-Skipping Transfer) Taxes (Rev. January 2006). When asking for an automatic 6-month
extension, you are
not required to provide an explanation for your request. For additional information, see Form 4768 and its instructions.
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