Get Announcement 2001-74 - New Filing Locations For Estate, Gift, And Generation-Skipping Transfer Tax

IRS Form 706, also known as the United States Estate and Generation-Skipping Transfer Tax Return, is used to report the value of a deceased individual's estate for federal estate tax purposes. It includes information about the decedent's assets, deductions, and beneficiaries.

And here's how the generation-skipping trust tax works: Congress enacted the GST tax in 1976 to prevent families from avoiding the estate tax for one or more generations by making gifts or bequests directly to grandchildren or great-grandchildren.

The executor of a decedent's estate uses Form 706 to figure the estate tax imposed by Chapter 11 of the Internal Revenue Code. Form 706 is also used to compute the generation-skipping transfer (GST) tax imposed by Chapter 13 on direct skips.

Where To File File Form 709 at the following address. Department of the Treasury. Internal Revenue Service Center. Kansas City, MO 64999. If using a PDS, file at this address. Internal Revenue Service. 333 W. Pershing Road. Kansas City, MO 64108.

A direct skip happens when the transferor gifts assets directly to a skip person, and they have immediate ownership rights. Indirect skip. In an indirect skip, someone transfers money to an entity (such as a trust) that may eventually distribute assets to a skip person.

Purpose of Form Form 706-GS(T) is used by a trustee to figure and report the tax due from certain trust terminations that are subject to the generation-skipping transfer (GST) tax.

An estate tax return (Form 706) must be filed if the gross estate of the decedent (who is a U.S. citizen or resident), increased by the decedent's adjusted taxable gifts and specific gift tax exemption, is valued at more than the filing threshold for the year of the decedent's death, as shown in the table below.

The GSTT was introduced in 1976, and was implemented to prevent what the IRS perceived as wealthy families avoiding estate taxes at the death of each generation.