As if rounding up the decedent's Connecticut medical records--and obituaries published around the world--were not burdensome enough, the Connecticut estate tax return instructions require an attached copy of the completed federal estate tax return (Form 706
, United States Estate (and Generation-Skipping Transfer) Tax Return), even though the higher federal estate tax exemption amount means Form 706
does not have to be filed with the IRS.
If an estate tax return will be filed, the executor/trustee should request Form 712, Life Insurance Statement, which will be attached to the Form 706
The simplest way to do this is to remove the IRD items (and related DRD items) in the software program used to prepare the Form 706
, United States Estate (and Generation-Skipping Transfer) Tax Return, and determine what the estate tax would have been if no IRD had been included in the estate.
First, if the estate plan establishes a trust that uses any portion of a deceased spouse's estate tax credit, then the only way to take advantage of Portability is to file a detailed Form 706
and provide in-depth valuation information on all of the assets going into that trust.
If a Form 706
is not required, (16) there is the added cost of having to complete and file a Form 706
if the only purpose of doing so is to elect portability.
The lifetime gift exemption amount is considered to be an "adjusted taxable gift" and is added back (recapitulated) into the taxable estate amount at death on Line 4 of the Form 706
To this end, the Real Property Deficiency Study should be submitted along with all other information to support Form 706
(Federal Estate Tax Return) FMVs.
Q Do assets in a trust have to be shown on Form 706
and be included in the estate of the decedent?
Finally, Estate and Gift Tax Returns and Audits is a guide to the perparation of Form 706
, federal estate and generation-skipping transfer tax return, and Form 709, gift and generation-skipping tax returns.
For example, Form 706
, the general estate tax return, occupies 35 pages (pp 149-184), and the type is too fine for many to read it.
IRS Estate Tax Form 706
(page 1 and page 2) expressly states that the tax return can be amended, and
GST transfers and exemption allocations made at death, or direct skips from trusts included in a taxable estate, are reported on a Form 706
estate tax return, as well as a reconciliation of the decedent's lifetime GST tax and exemption use.