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However, if the decedent's estate is not liable, include in the gross estate only the value of the equity of redemption (or the value of the property less the amount of the debt), and do not deduct any portion of the indebtedness on this schedule. Notes and other obligations secured by the deposit of collateral, such as stocks, bonds, etc., should also be listed under Mortgages and Liens. Description Include under the “Description” column the particular schedule and item number where the property subject to the mortgage or lien is reported in the gross estate. Include the name and address of the mortgagee, payee, or obligee, and the date and term of the mortgage, note, or other agreement by which the debt was established. Also include the face amount, the unpaid balance, the rate of interest, and the date to which the interest was paid before the decedent's death. Schedule L—Net Losses During Administration and Expenses Incurred in Administering Property Not Subject to Claims Use Schedule PC to make a protective claim for refund for expenses which are not currently deductible under section 2053. For such a claim, report the expense on Schedule L but without a value in the last column. Complete Schedule L and file it with the return if you claim deductions on either item 19 or item 20 of Part 5—Recapitulation. Net Losses During Administration You may deduct only those losses from thefts, fires, storms, shipwrecks, or other casualties that occurred during the settlement of the estate. Deduct only the amount not reimbursed by insurance or otherwise. Describe in detail the loss sustained and the cause. If you received insurance or other compensation for the loss, state the amount collected. Identify the property for which you are claiming the loss by indicating the schedule and item number where the property is included in the gross estate. If you elect alternate valuation, do not deduct the amount by which you reduced the value of an item to include it in the gross estate. Do not deduct losses claimed as a deduction on a federal income tax return or depreciation in the value of securities or other property. Expenses Incurred in Administering Property Not Subject to Claims You may deduct expenses incurred in administering property that is included in the gross estate but that is not subject to claims. Only deduct these expenses if they were paid before the section 6501 period of limitations for assessment expired. The expenses deductible on this schedule are usually expenses incurred in the administration of a trust established by the decedent before death. They may also be incurred in the collection of other assets or the transfer or clearance of CAUTION ! title to other property included in the decedent's gross estate for estate tax purposes, but not included in the decedent's probate estate. The expenses deductible on this schedule are limited to those that are the result of settling the decedent's interest in the property or of vesting good title to the property in the beneficiaries. Expenses incurred on behalf of the transferees (except those described earlier) are not deductible. Examples of deductible and nondeductible expenses are provided in Regulations section 20.2053-8(d). List the names and addresses of the persons to whom each expense was payable and the nature of the expense. Identify the property for which the expense was incurred by indicating the schedule and item number where the property is included in the gross estate. If you do not know the exact amount of the expense, you may deduct an estimate, provided that the amount may be verified with reasonable certainty and will be paid before the period of limitations for assessment (referred to earlier) expires. Keep all vouchers and receipts for inspection by the IRS. Schedule M—Bequests, etc., to Surviving Spouse (Marital Deduction) 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 Part 5—Recapitulation, line 23, for information on how to estimate and report the value of these assets. General You must complete Schedule M and file it with the return if you claim a deduction on item 21 of Part 5—Recapitulation. The marital deduction is authorized by section 2056 for certain property interests that pass from the decedent to the surviving spouse. You may claim the deduction only for property interests that are included in the decedent's gross estate (Schedules A through I). Note. The marital deduction is generally not allowed if the surviving spouse is not a U.S. citizen. The marital deduction is allowed for property passing to such a surviving spouse in a QDOT or if such property is transferred or irrevocably assigned to such a trust before the estate tax return is filed. The executor must elect QDOT status on the return. See the instructions that follow for details on the election. Property Interests That You May List on Schedule M Generally, you may list on Schedule M all property interests that pass from the decedent to the surviving spouse and are included in the gross estate. However, do not list any nondeductible terminable interests (described later) on Schedule M unless you are making a QTIP election. The property for which you make this election must be included on Schedule M. See Qualified terminable interest property, later. For the rules on common disaster and survival for a limited period, see section 2056(b)(3). You may list on Schedule M only those interests that the surviving spouse takes: CAUTION ! Instructions for Form 706 (Rev. 09-2022) -37-