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WORKSHEET (Inclusion Ratio) 1. Total estate and gift tax value of all of the property interests that passed to the trust . . . . . . .

2. Estate taxes, state death taxes, and other charges actually recovered from the trust . . .

3. GST taxes imposed on direct skips to skip persons other than this trust and borne by the property transferred to this trust . . . . . . . . . . . . . . .

4. GST taxes actually recovered from this trust (from Schedule R, Part 2, line 8; or Schedule R-1, line 6) . . . . . . . . . . . . . .

5. Add lines 2 through 4 . . . . .

6. Subtract line 5 from line 1 . .

7. Add columns C and D of line 9 . . . . . . . . . . . . . . .

8. Divide line 7 by line 6 . . . . .

9. Trust's inclusion ratio. Subtract line 8 from 1.000 . . . . . . . .

Line 10. Special-use allocation. For skip persons who receive an interest in section 2032A special-use property, you may allocate more GST exemption than the direct skip amount to reduce the additional GST tax that would be due when the interest is later disposed of or qualified use ceases. See Schedule A-1, earlier, for more details about this additional GST tax. Enter on line 10 the total additional GST exemption available to allocate to all skip persons who received any interest in section 2032A property. Attach a special-use allocation statement listing each such skip person and the amount of the GST exemption allocated to that person. If you do not allocate the GST exemption, it will automatically be allocated under the deemed allocation at death rules. To the extent any amount is not so allocated, it will be automatically allocated to the earliest disposition or cessation that is subject to the GST tax. Under certain circumstances, post-death events may cause the decedent to be treated as a transferor for purposes of chapter 13. Line 10 may be used to set aside an exemption amount for such an event. Attach a statement listing each such event and the amount of exemption allocated to that event. Parts 2 and 3 Use Part 2 to figure the GST tax on transfers in which the property interests transferred are to bear the GST tax on the transfers. Use Part 3 to report the GST tax on transfers in which the property interests transferred do not bear the GST tax on the transfers. Section 2603(b) requires that unless the governing instrument provides otherwise, the GST tax is to be charged to the property constituting the transfer. Therefore, you will usually enter all of the direct skips on Part 2. You may enter a transfer on Part 3 only if the will or trust instrument directs, by specific reference, that the GST tax is not to be paid from the transferred property interests. Part 2, line 3. Enter zero on this line unless the will or trust instrument specifies that the GST taxes will be paid by property other than that constituting the transfer (as described above). Enter on line 3 the total of the GST taxes shown on Part 3 and Schedule(s) R-1 that are payable out of the property interests shown on Part 2, line 1. Part 2, line 6. Do not enter more than the amount on line 5. Additional allocations may be made using Part 1. Part 3, line 3. See the instructions for Part 2, line 3, above. Enter only the total of the GST taxes shown on Schedule(s) R-1 that are payable out of the property interests shown on Part 3, line 1. Part 3, line 6. See the instructions for Part 2, line 6, above. How To Complete Schedule R-1 Filing due date. Enter the due date of Form 706. You must send the copies of Schedule R-1 to the fiduciary before this date. Line 4. Do not enter more than the amount on line 3. If you wish to allocate an additional GST exemption, you must use Schedule R, Part 1. Making an entry on line 4 constitutes a Notice of Allocation of the decedent's GST exemption to the trust. Line 6. If the property interests entered on line 1 will not bear the GST tax, multiply line 6 by 40% (0.40). Signature. The executor(s) must sign Schedule R-1 in the same manner as Form 706. See Signature and Verification, earlier. Filing Schedule R-1. Attach to Form 706 one copy of each Schedule R-1 that you prepare. Send two copies of each Schedule R-1 to the fiduciary. Schedule U—Qualified Conservation Easement Exclusion If at the time of the contribution of the conservation easement, the value of the easement, the value of the land subject to the easement, or the value of any retained development right was different from the estate tax value, you must complete a separate computation in addition to completing Schedule U. Use a copy of Schedule U as a worksheet for this separate computation. Complete lines 4 through 14 of the worksheet Schedule U. However, the value you use on lines 4, 5, 7, and 10 of the worksheet is the value for these items as of the date of the contribution of the easement, not the estate tax value. If the date of contribution and the estate tax values are the same, you do not need to do a separate computation. After completing the worksheet, enter the amount from line 14 of the worksheet on line 14 of Schedule U. Finish completing Schedule U by entering amounts on lines 4, 7, and 15 through 20, following the instructions later for those lines. At the top of Schedule U, enter "worksheet attached." Attach the worksheet to the return. Under section 2031(c), you may elect to exclude a portion of the value of land that is subject to a qualified conservation easement. You make the election by filing Schedule U with all of the required information and excluding the applicable value of the land that is subject to the easement on Part 5—Recapitulation, on item 12. To elect the exclusion, include on Schedule A, B, E, F, G, or H, as appropriate, the decedent's interest in the land that is subject to the exclusion. You must make the election on a timely filed Form 706, including extensions. The exclusion is the lesser of: • The applicable percentage of the value of land (after certain reductions) subject to a qualified conservation easement, or • $500,000. Once made, the election is irrevocable. General Requirements Qualified Land Land may qualify for the exclusion if all of the following requirements are met. CAUTION ! Instructions for Form 706 (Rev. 09-2021) -47-