DEFINITION of 'Form 706: United States Estate (And Generation-Skipping Transfer) Tax Return'
A tax form distributed by the Internal Revenue Service (IRS) used by the executor of an estate to determine if any taxes are owed. Form 706 is to be completed by the executor if the decedent is a U.S. resident or citizen, and the decedent's gross estate is valued at over a certain value (adjusted periodically). Estate taxes are not levied on the pieces inherited by individual beneficiaries but on the estate as a whole. Form 706 is also used to calculate the generation-skipping transfer (GST) tax.
BREAKING DOWN 'Form 706: United States Estate (And Generation-Skipping Transfer) Tax Return'
Form 706 must be completed within nine months of the decedent's death unless the IRS has granted an extension. A six month extension can be requested through Form 4768. For decedent's who were neither U.S. citizens or residents at the time of death, executors should complete Form 706-NA.