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If real estate is owned by a sole proprietorship, it should be reported on Schedule F and not on Schedule A. Describe the real estate with the same detail required for Schedule A. Valuation discounts. If you answered “Yes” to Part 4—General Information, line 11b, for any interest in a partnership, an unincorporated business, an LLC, or stock in a closely held corporation, attach a statement that lists the item number from Schedule F and identifies the total effective discount taken (that is, XX.XX %) on such interest. Example of effective discount: a Pro-rata value of LLC (before any discounts) $100.00 b Minus: 10% discounts for lack of control (10.00) c Marketable minority interest value (as if freely traded minority interest value) $90.00 d Minus: 15% discount for lack of marketability (13.50) e Nonmarketable minority interest value $76.50 Calculation of effective discount: (a minus e) divided by a = effective discount ($100.00 - $76.50) ÷ $100.00 = 23.50% Note. The amount of discounts is based on the factors pertaining to a specific interest and those discounts shown in the example are for demonstration purposes only. If you answered “Yes” to line 11b for any transfer(s) described in (1) through (5) in the Schedule G instructions (and made by the decedent), attach a statement to Schedule G which lists the item number from that schedule and identifies the total effective discount taken (that is, XX.XX%) on such transfer(s). Line 1. If the decedent owned at the date of death works of art or items with collectible value (for example, jewelry, furs, silverware, books, statuary, vases, oriental rugs, coin or stamp collections), check the “Yes” box on line 1 and provide full details. If any item or collection of similar items is valued at more than $3,000, attach an appraisal by an expert under oath and the required statement regarding the appraiser's qualifications (see Regulations section 20.2031-6(b)). Decedent Who Was a Surviving Spouse If the decedent was a surviving spouse, he or she may have received qualified terminable interest property (QTIP) from the predeceased spouse for which the marital deduction was elected either on the predeceased spouse's estate tax return or on a gift tax return, Form 709. The election is available for transfers made and decedents dying after December 31, 1981. List such property on Schedule F. If this election was made and the surviving spouse retained his or her interest in the QTIP property at death, the full value of the QTIP property is includible in his or her estate, even though the qualifying income interest terminated at death. It is valued as of the date of the surviving spouse's death, or alternate valuation date, if applicable. Do not reduce the value by any annual exclusion that may have applied to the transfer creating the interest. The value of such property included in the surviving spouse's gross estate is treated as passing from the surviving spouse. It therefore qualifies for the charitable and marital deductions on the surviving spouse's estate tax return if it meets the other requirements for those deductions. For additional details, see Regulations section 20.2044-1. Schedule G—Transfers During Decedent's Life If any assets to which the special rule of Regulations section 20.2010-2(a)(7)(ii) applies are reported on this schedule, do not enter any value in the last three columns. See the instructions for line 10 of Part 5—Recapitulation for information on how to estimate and report the value of these assets. Complete Schedule G and file it with the return if the decedent made any of the transfers described in (1) through (5) later, or if you answered “Yes” to question 12 or 13a of Part 4—General Information. Report the following types of transfers on this schedule. CAUTION ! IF. . . AND . . . THEN . . . the decedent made a transfer from a trust at the time of the transfer, the transfer was from a portion of the trust that was owned by the grantor under section 676 (other than by reason of section 672(e)) by reason of a power in the grantor for purposes of sections 2035 and 2038, treat the transfer as made directly by the decedent. Any such transfer within the annual gift tax exclusion is not includible in the gross estate. 1. Certain gift taxes (section 2035(b)). Enter on item A of Schedule G the total value of the gift taxes that were paid by the decedent or the estate on gifts made by the decedent or the decedent's spouse within 3 years of death. The date of the gift, not the date of payment of the gift tax, determines whether a gift tax paid is included in the gross estate under this rule. Therefore, you should carefully examine the Forms 709 filed by the decedent and the decedent's spouse to determine what part of the total gift taxes reported on them was attributable to gifts made within 3 years of death. For example, if the decedent died on July 10, 2021, you should examine gift tax returns for 2021, 2020, 2019, and 2018. However, the gift taxes on the 2018 return that are attributable to gifts made on or before July 10, 2018, are not included in the gross estate. Explain how you figured the includible gift taxes if the entire gift taxes shown on any Form 709 filed for gifts made within 3 years of death are not included in the gross estate. Also attach copies of any relevant gift tax returns filed by the decedent's spouse, with "Exhibit to Estate Tax Return" entered across the top of the first page of each, for gifts made within 3 years of death. 2. Other transfers within 3 years of death (section 2035(a)). These transfers include only the following. • Any transfer by the decedent with respect to a life insurance policy within 3 years of death. • Any transfer within 3 years of death of a retained section 2036 life estate, section 2037 reversionary interest, or section 2038 power to revoke, etc., if the property subject to the life estate, interest, or power would have been included in the gross estate had the Instructions for Form 706 (Rev. 09-2021) -27-