What Is IRS Form 706?
Let me explain IRS Form 706 directly to you: it's the United States Estate (and Generation-Skipping Transfer) Tax Return, a form from the Internal Revenue Service that I, as an executor of a decedent's estate, would use to figure out the estate tax and the generation-skipping transfer tax owed.
Key Takeaways
As an executor, you use Form 706 to calculate the estate tax and the generation-skipping transfer tax. You must file it for a deceased U.S. citizen or resident if the gross estate, adjusted taxable gifts, and specific exemptions exceed $13.99 million in 2025 or $13.61 million in 2024. There's also Form 706-GS(D) for calculating taxes on trust distributions subject to the generation-skipping transfer tax.
You, as the executor, use Form 706 to determine the tax owed on estates valued over those thresholds if the decedent died in those years. This form also helps you figure out the overall value of the estate before distributing assets to beneficiaries as per the will or trust. The IRS applies a stepped-up valuation, meaning the cost basis adjusts to the fair market value at the date of death.
This stepped-up method lets heirs minimize capital gains taxes and simplifies the valuation process by reducing administrative tasks. A generation-skipping transfer tax applies to transfers of money or property to someone two or more generations below the grantor, like a grandchild or anyone at least 37½ years younger.
This tax ensures payments at each generational level, with the same exemption as federal estate and gift taxes: $13.99 million for 2025 and $13.61 million for 2024.
Who Can File Form 706?
You, as the executor, must file Form 706 for every U.S. citizen or resident whose gross estate, adjusted taxable gifts, and specific exemptions total more than the exclusion amount—$13.99 million for deaths in 2025 or $13.61 million in 2024—or if you elect to transfer the deceased spousal unused exclusion to the surviving spouse, no matter the estate size.
To check if it exceeds, add the adjusted taxable gifts after December 31, 1976, the total specific exemption under Section 2521 for gifts after September 8, 1976, and the gross estate valued at death.
What the Gross Estate Includes
- All property in which the decedent had an interest, including real property outside the U.S.
- Certain transfers made during the decedent’s life without adequate consideration.
- Annuities.
- The includable part of joint estates with rights of survivorship.
- The includable part of tenancies by the entirety.
- Certain life insurance proceeds.
- Property over which the decedent had a general power of appointment.
- Dower or curtesy (or statutory estate) of the surviving spouse.
- Community property in which the decedent had an interest.
Important Note on Valuation
The IRS uses a stepped-up valuation methodology to determine the estate's value.
Related Forms
Form 706-NA is for calculating estate and generation-skipping transfer taxes for nonresident alien decedents. Form 706-GS(D) calculates taxes on trust distributions subject to this tax, and any skip person receiving such a distribution must use it to report the tax. Trustees report these using Form 706-GS(D-1) and provide the necessary info to the skip person.
Where to Mail Form 706
You must file a paper Form 706 to report and pay these taxes within nine months of the death. For an extension, use Form 4768 for an automatic six months. Send it to Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999. If using private delivery like DHL, FedEx, or UPS, send to Internal Revenue Submission Processing Center, 333 W. Pershing Road, Kansas City, MO 64108. For amended forms, use Internal Revenue Service Center, Attn: E&G, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915. Make checks to 'United States Treasury' with the decedent’s details, or pay via Electronic Federal Tax Payments System.
Does Every Estate Have to File a Form 706?
Not every estate needs to file Form 706; you only file if the gross estate, adjusted gifts, and exemptions exceed the limit for the year of death.
What's the Difference Between IRS Form 706 and IRS Form 709?
Form 706 is filed by you as executor for a deceased person to determine taxes owed, while Form 709 is filed by an individual to report gifts over the annual limit.
What Triggers an Estate Tax Return?
An estate with over $600 in annual gross income must file Form 1041, and it may need to pay quarterly estimated taxes.
The Bottom Line
IRS Form 706 reports the value of a deceased individual's estate for federal estate tax purposes, including assets, deductions, and beneficiaries, so the IRS can calculate any taxes subject to exclusions.
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