Synopsis of Form 706 Calculations

The following is a synopsis of the Form 706 calculations:

The present fair market value of all assets owned individually.
One-half the value of assets held jointly with a spouse.
The value of any property interest.
Gratuitous lifetime transfers made within three years of death.
Certain gratuitous transfers taking place at death in which possession or enjoyment of the property can be obtained only by surviving the decedent.
Gratuitous lifetime transfers in which the decedent retained the power to alter, amend, revoke, or terminate the transfer.
Annuities or similar payments under certain plans or contracts.
Jointly held property subject to a general power of appointment.
Proceeds of life insurance on the decedent's life, if the decedent possessed incidents of ownership in the policy or the proceeds were receivable by the estate.
The cash value of existing life insurance policies on another individual but owned by the decedent. (See life insurance and estate taxes).
Death proceeds of new and existing life insurance policies not owned by the individual but when the individual is the insured or the estate is the beneficiary.
Death proceeds received by the estate or spouse at the first death plus growth calculated at the average growth rate of liquid assets.
Death proceeds of new and existing life insurance policies owned by the individual on his/her own life.

LESS:

The accumulation of the planned gifts at the average growth rate. One half of the gifts are attributed to each spouse.
Charitable bequests are used at the appropriate death at the input value (no growth).
Life insurance premiums are subtracted from the estate of the policy owner. If a survivor policy is owned by the first-to-die, the premiums for that policy are included with the premiums attributed to a trust or other. Some transfers made during the decedent's lifetime will be brought back into the estate for tax calculation purposes – see lifetime transfers for a listing.

See Also

Gross Estate