How to Complete Lines 4–7 of Part 4: Estate Form 706

4 of 8 in Series:
The Essentials of Completing the Estate Tax Return (Form 706)

Part 4 of tax Form 706 provides the IRS with information regarding the estate’s decedent. Lines 4 and 5of Part 4 identify the decedent’s surviving spouse, if any, and any entity that will benefit substantially from the estate. Lines 6 and 7 deal with qualified terminable interest (QTIP) property that the decedent may have owned and whether or not the decedent filed gift tax returns.

The first item under Part 4: General Information on Page 2 of the 706 return is the authorization to receive confidential tax information, act as the estate’s representative before the IRS, and make written or oral presentations on behalf of the estate.

If the return was prepared by an attorney, accountant, or enrolled agent, he or she signs it and fills out all the necessary information.

Use Form 2848, Power of Attorney and Declaration of Representative, instead if you want to do any of the following:

• Appoint more than one person

  
  



• Appoint someone other than an attorney, CPA, or EA

  
  



• Appoint someone with the power to enter into closing agreements with the IRS regarding the estate and the 706

  
  

Line 4 of Part 4: Estate Form 706

Complete line 4, whether or not the decedent has a surviving spouse. For no spouse, simply enter “none” in line 4a, and leave 4b and 4c blank. Otherwise, in line 4c enter the amount the surviving spouse actually receives. A reasonable estimate may also be used.

Line 5 of Part 4: Estate Form 706

For line 5, include all individuals (other than the surviving spouse), trusts, and estates who receive more than $5,000 in benefits from the estate either directly or indirectly. A beneficiary of an insurance policy is an example.

Don’t include the charities listed on Schedule O here.

Include the following information about each entity:

• Name.

  
  



• Social Security or taxpayer identification number (TIN). Include this information in the column headed “Identifying number.”

  
  



• Relationship to the decedent. Include this information in the column by that name.

  
  



• Amount received. Include this information in the column entitled “Amount.” Enter the amount each person or entity actually receives. If exact amounts aren’t available, use a reasonable estimate.

  
  

  Underneath the individual beneficiaries is a line where you include a total for all beneficiaries who received less than $5,000 apiece and for all unascertainable beneficiaries.

  
  

  The total of all these distributions should approximately equal the gross estate minus funeral and administrative expenses, debts and mortgages, charitable bequests, and federal estate and GST taxes.

  
  

Line 6 of Part 4: Estate Form 706

For line 6, check the appropriate “yes” or “no” box to indicate whether the estate includes any qualified terminable interest (QTIP) property from a prior gift or estate under section 2044. If it does, show the assets on Schedule F.

If the decedent was a surviving spouse, he or she may have received QTIP property for which the marital deduction was taken on either a 706 or a 709 from the predeceased spouse. If the decedent still retained an interest in the QTIP property as of death, it’s included in his or her estate.

Line 7 of Part 4: Estate Form 706

On line 7a, indicate whether the decedent ever filed gift tax returns. If so, attach copies as exhibits. On line 7b, list the periods covered by the returns. On line 7c, list the IRS offices where the gift tax returns were filed.

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