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Section 2032A additional tax. If the Maximum Amount of the Schedules R and transferor’s estate elected special-use Credit R-1—Generation-Skipping valuation and the additional estate tax The maximum amount of the credit is of section 2032A(c) was imposed at Transfer Tax the smaller of: any time up to 2 years after the death 1. The amount of the estate tax of of the decedent for whom you are filing Introduction and Overview the transferor’s estate attributable to the this return, check the box on Schedule Schedule R is used to figure the transferred property or Q. On lines 1 and 9 of the worksheet, generation-skipping transfer (GST) tax 2. The amount by which: include the property subject to the that is payable by the estate. Schedule a. An estate tax on the transferee’s additional estate tax at its FMV rather R-1 is used to figure the GST tax that is estate determined without the credit for than its special-use value. On line 10 of payable by certain trusts that are tax on prior transfers exceeds the worksheet, include the additional includible in the gross estate. b. An estate tax on the transferee’s estate tax paid as a federal estate tax estate determined by excluding from paid. The GST tax that is to be reported the gross estate the net value of the on Form 706 is imposed only on “direct transfer. skips occurring at death.” Unlike the How To Complete the estate tax, which is imposed on the If credit for a particular foreign death value of the entire taxable estate Schedule Q Worksheet tax may be taken under either the regardless of who receives it, the GST statute or a death duty convention, and Most of the information to complete tax is imposed only on the value of on this return the credit actually is taken Part I of the worksheet should be interests in property, wherever located, under the convention, then no credit for obtained from the transferor’s Form that actually pass to certain transferees, that foreign death tax may be taken into 706. who are referred to as “skip persons.” consideration in figuring estate tax (a) or estate tax (b), above. For purposes of Form 706, the Line 5. Enter on line 5 the applicable property interests transferred must be marital deduction claimed for the includible in the gross estate before Percent Allowable transferor’s estate (from the transferor’s they are subject to the GST tax. Form 706). Where transferee predeceased the Therefore, the first step in figuring the transferor. If not more than 2 years GST tax liability is to determine the Lines 10 through 18. Enter on these elapsed between the dates of death, property interests includible in the gross the credit allowed is 100% of the lines the appropriate taxes paid by the estate by completing Schedules A maximum amount. If more than 2 years transferor’s estate. through I of Form 706. elapsed between the dates of death, no The second step is to determine who credit is allowed. If the transferor’s estate elected to the skip persons are. To do this, assign pay the federal estate tax in Where transferor predeceased the each transferee to a generation and installments, enter on line 10 only the transferee. The percent of the determine whether each transferee is a total of the installments that have maximum amount that is allowed as a “natural person” or a “trust” for GST actually been paid at the time you file credit depends on the number of years purposes. this Form 706. See Revenue Ruling that elapsed between dates of death. It The third step is to determine which 83-15, 1983-1 C.B. 224, for more is determined using the following table: skip persons are transferees of details. Do not include as estate tax “interests in property.” If the skip person Period of any tax attributable to section 4980A, is a natural person, anything transferred Time Not Percent before its repeal by the Taxpayer Relief is an interest in property. If the skip Exceeding Exceeding Allowable Act of 1997. person is a trust, make this - - - - - 2 years 100 determination using the rules under 2 years 4 years 80 Line 21. Add lines 11 (allowable Interest in property below. These first 4 years 6 years 60 unified credit) and 13 (foreign death three steps are described in detail 6 years 8 years 40 taxes credit) of Part 2—Tax under the main heading, Determining 8 years 10 years 20 Computation to the amount of any Which Transfers Are Direct Skips 10 years - - - - - none credit taken (on line 15) for federal gift below. taxes on pre-1977 gifts (section 2012). The fourth step is to determine Subtract this total from Part 2—Tax whether to enter the transfer on How To Figure the Credit Computation, line 8. Enter the result on Schedule R or on Schedule R-1. See A worksheet for Schedule Q is provided line 21 of the worksheet. the rules under the main heading, to allow you to figure the limits before Dividing Direct Skips Between completing Schedule Q. Transfer the Line 26. If you figured the marital Schedules R and R-1. appropriate amounts from the deduction using the unlimited marital The fifth step is to complete worksheet to Schedule Q as indicated deduction in effect for decedents dying Schedules R and R-1 using the How To on the schedule. You do not need to file after 1981, for purposes of determining Complete instructions for each the worksheet with your Form 706, but the marital deduction for the reduced schedule. you should keep it for your records. gross estate, see Revenue Ruling 90-2, 1990-1 C.B. 169. To determine the Determining Which Transfers Cases involving transfers from two “reduced adjusted gross estate,” or more transferors. Part I of the Are Direct Skips subtract the amount on line 25 of the worksheet and Schedule Q enable you Effective dates. The rules below Schedule Q Worksheet from the to figure the credit for as many as three apply only for the purpose of amount on line 24 of the worksheet. If transferors. The number of transferors determining if a transfer is a direct skip community property is included in the is irrelevant to Part II of the worksheet. that should be reported on Schedule R amount on line 24 of the worksheet, If you are figuring the credit for more or R-1 of Form 706. figure the reduced adjusted gross than three transferors, use more than estate using the rules of Regulations one worksheet and Schedule Q, Part I, In general. The GST tax is section 20.2056(c)-2 and Revenue and combine the totals for the effective for the estates of decedents Ruling 76-311, 1976-2 C.B. 261. appropriate lines. dying after October 22, 1986. -34- Part Instructions