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Line 15 If a charitable contribution deduction for this land has been taken on Schedule O, enter the amount of the deduction here. If the easement was granted after the decedent's death, a contribution deduction may be taken on Schedule O, if it otherwise qualifies, as long as no income tax deduction was or will be claimed for the contribution by any person or entity. Line 16 Reduce the value of the land by the amount of any acquisition indebtedness on the land at the date of the decedent's death. Acquisition indebtedness includes the unpaid amount of: • Any indebtedness incurred by the donor in acquiring the property; • Any indebtedness incurred before the acquisition if the indebtedness would not have been incurred but for the acquisition; • Any indebtedness incurred after the acquisition if the indebtedness would not have been incurred but for the acquisition and the incurrence of the indebtedness was reasonably foreseeable at the time of the acquisition; and • The extension, renewal, or refinancing of acquisition indebtedness. Schedule PC—Protective Claim for Refund A protective claim for refund preserves the estate’s right to a refund of tax paid on any amount included in the gross estate which would be deductible under section 2053 but has not been paid or otherwise will not meet the requirements of section 2053 until after the limitations period for filing the claim has passed. See section 6511(a). Only use Schedule PC for section 2053 protective claims for refund being filed with Form 706. If the initial notice of the protective claim for refund is being submitted after Form 706 has been filed, use Form 843, Claim for Refund and Request for Abatement, to file the claim. Schedule PC may be used to file a section 2053 protective claim for refund by estates of decedents who died after December 31, 2011. It will also be used to inform the IRS when the contingency leading to the protective claim for refund is resolved and the refund due the estate is finalized. The estate must indicate whether the Schedule PC being filed is the initial notice of protective claim for refund, notice of partial claim for refund, or notice of the final resolution of the claim for refund. Because each separate claim or expense requires a separate Schedule PC, more than one Schedule PC may be included with Form 706, if applicable. Two copies of each Schedule PC must be included with Form 706. Note. Filing a section 2053 protective claim for refund on Schedule PC will not suspend the IRS’s review and examination of Form 706, nor will it delay the issuance of a closing letter for the estate. CAUTION ! Initial Notice of Claim The first Schedule PC to be filed is the initial notice of protective claim for refund. The estate will receive a written acknowledgment of receipt of the claim from the IRS. If the acknowledgment is not received within 180 days of filing the protective claim for refund on Schedule PC, the fiduciary should contact the IRS at 866-699-4083 to inquire about the receipt and processing of the claim. A certified mail receipt or other evidence of delivery is not sufficient to confirm receipt and processing of the protective claim for refund. Note. The written acknowledgment of receipt does not constitute a determination that all requirements for a valid protective claim for refund have been met. In general, the claim will not be subject to substantive review until the amount of the claim has been established. However, a claim can be disallowed at the time of filing. For example, the claim for refund will be rejected if: • The claim was not timely filed, • The claim was not filed by the fiduciary or other person with authority to act on behalf of the estate, • The acknowledgment of the penalties of perjury statement (on page 1 of Form 706) was not signed, or • The claim is not adequately described. If the IRS does not raise such a defect when the claim is filed, it will not be precluded from doing so in the later substantive review. The estate may be given an opportunity to cure any defects in the initial notice by filing a corrected and signed protective claim for refund before the expiration of the limitations period in section 6511(a) or within 45 days of notice of the defect, whichever is later. Related Ancillary Expenses If a section 2053 protective claim for refund has been adequately identified on Schedule PC, the IRS will presume that the claim includes certain expenses related to resolving, defending, or satisfying the claim. These ancillary expenses may include attorneys’ fees, court costs, appraisal fees, and accounting fees. The estate is not required to separately identify or substantiate these expenses; however, each expense must meet the requirements of section 2053 to be deductible. Notice of Final Resolution of Claim When an expense that was the subject of a section 2053 protective claim for refund is finally determined, the estate must notify the IRS that the claim for refund is ready for consideration. The notification should provide facts and evidence substantiating the deduction under section 2053 and the resulting recomputation of the estate tax liability. A separate notice of final resolution must be filed with the IRS for each resolved section 2053 protective claim for refund. There are two means by which the estate may notify the IRS of the resolution of the uncertainty that deprived the estate of the deduction when Form 706 was filed. The estate may file a supplemental Form 706 with an updated Schedule PC and include each schedule affected by the allowance of the deduction under section 2053. Page 1 of Form 706 should contain the notation “Supplemental Information—Notification of Consideration of Section 2053 Protective Claim(s) for Refund” and include the filing date of the initial notice of protective claim for refund. A copy of the initial notice of claim should also be submitted. Instructions for Form 706 (Rev. 09-2022) -53-