Charitable and public bequests enter the Form 706 process when property passes from the decedent to qualifying charitable, governmental, or similar organizations. Within the federal estate tax system, these transfers are treated separately because they are removed from taxation when statutory conditions are satisfied, reflecting the system’s policy of encouraging certain public-benefit transfers.
The marital deduction becomes part of the Form 706 process when property interests pass from the decedent to a surviving spouse in a manner recognized by the federal estate tax system. This deduction reflects the system’s treatment of spousal transfers as deferred rather than immediately taxable, allowing property to move to the surviving spouse without estate tax at the first death when statutory conditions are met.
After property included in the gross estate is identified and valued, the Form 706 process applies reductions for obligations that legally diminish the estate’s taxable value. These reductions reflect the estate tax system’s recognition that debts of the decedent and certain administration expenses represent claims against the estate rather than transferable wealth.
Annuities are addressed in the Form 706 process when the decedent had rights to annuity payments or benefits that continued or were triggered by death. Within the estate tax system, annuities are treated as a distinct category because inclusion depends on contractual rights, survivor benefits, and the extent to which the decedent retained an enforceable interest at the time of death.
Powers of appointment are included in the Form 706 process when the decedent held legal authority to designate who would receive certain property interests. Within the estate tax system, these powers are treated as a form of control rather than ownership, and their existence at death can cause property to be included in the gross estate even if the decedent never held title to the assets.
Schedule G is used in the Form 706 process when property transferred by the decedent during life must still be evaluated as part of the estate tax system. These transfers are included not because the property remained owned at death, but because federal estate tax rules treat certain lifetime transactions as continuing to affect the decedent’s taxable estate.
Schedule F is used in the Form 706 process to report property interests that do not fall within the specific asset categories addressed by other schedules. These interests may vary widely in form and legal character, but they are included because the estate tax system requires a complete accounting of all property connected to the decedent at the time of death.
Jointly owned property enters the Form 706 process when the decedent held an ownership interest in property together with another person at the time of death. Within the estate tax system, jointly owned assets are treated separately because inclusion depends on how ownership was structured, how consideration was provided, and whether survivorship rights transfer property automatically upon death.
Life insurance becomes part of the Form 706 process when the decedent’s death triggers insurance proceeds that are connected to ownership rights, control, or beneficiary arrangements recognized by the estate tax system. Within federal estate taxation, life insurance is treated as a separate category because inclusion depends not only on who receives the proceeds, but on the decedent’s legal interests and powers over the policy at the time of death.
Cash, promissory notes, and comparable financial interests are included in the Form 706 process when the decedent held liquid assets or enforceable rights to receive payment at the time of death. Within the estate tax system, these items are treated as a separate asset class because they represent direct claims to value rather than ownership of property or marketable securities. Reporting these interests allows the Internal Revenue Service to determine how readily available financial value contributes to the gross estate.
