Section 02 Data, Form 706, United States Estate (and Generation - Skipping Transfer)Tax…

Section 02 field designators, line numbers, field lengths and titles are listed below. It is transcribed in dollars and cents or dollars only, whichever is applicable. Field 0203C may be positive or zero (0). Section 02 cannot be present on a "G" coded amended return (delete if present).

Correct transcription errors if the field is not entirely numeric.

If the money amounts on a return exceed the maximum field length allowable, take the following action:

Enter the maximum amount allowable on the original return. Recompute the tax data and enter the corrected amount(s) on the screen display and the return. DO NOT SEND A TAXPAYER NOTICE CODE to the taxpayer.

Write on the original return, "Dummy Return prepared due to overflow document" .

Prepare a "Dummy Return" by computing and entering the remaining overflow money amount(s) for the correct fields. On the top of the return write "Prepared from Overflow Return" ; write the entity data and DLN from the original return; enter CCC "G" in Field 01CCC; and write "Signature on Original Return" in the signature area.

Attach routing slip to the completed "Dummy Return" and send to Receipt and Control to have the "Dummy Return" numbered and processed.

The Error Record Format for Section 02 is listed as follows:

Field Designator

Maximum Characters

Field Name

Location

0201

15

Total Gross Estate

Page 1, Part II, Line 1

0202

15

Tentative Total Allowable Deductions

Page 1, Part II, Line 2

0203 A

15

Tentative Taxable Estate

Page 1, Part II, Line 3a

15

Tentative Taxable Estate Computer-Generated

0203 B

15

State Death Tax Deduction

Page 1, Part II, Line 3b

0203 C

15

Taxable Estate

Page 1, Part II, Line 3c

15

Taxable Estate Computer-Generated

0204

15

Adjusted Taxable Gifts

Page 1, Part II, Line 4

0205

15

Net Taxable Estate

Page 1, Part II, Line 5

15

Net Taxable Estate Computer-Generated

0206

15

Tentative Tax

Page 1, Part II, Line 6

15

Tentative Tax Computer-Generated

02GTT

15

Gross Tax Tentative

Page 1, Part II, Line 7a (Tax Years 2001 and Prior)

02NTT

15

Net Tax Tentative

Page 1, Part II, Line 7b (Tax Years 2001 and Prior)

15

Net Tax Tentative Computer-Generated

02TNT

15

Total Net Tax Tentative

Page 1, Part II, Line 7c (Tax Years 2001 and Prior)

15

Total Net Tax Tentative Computer-Generated

02TTT

15

Total Transfer Taxes Tentative

Page 1, Part II, Line 8 (Tax Years 2001 and Prior)

15

Total Transfer Taxes Tentative Computer-Generated

0207

15

Total Gift tax paid or payable

Page 1, Part II, Line 7

0208

15

Gross Estate Tax

Page 1, Part II, Line 8

15

Gross Estate Tax Computer-Generated

0209

15

Unified Credit (2011 and Prior revisions)

Page 1, Part II, Line 9

15

Unified Credit (2011 and Prior revisions) Computer-Generated

0209A

15

Basic Exclusion Amount

Page 1, Part II, Line 9a

0209B

15

DSUE Amount

Page 1, Part II, Line 9b

0209C

15

Restored Exclusion Amount

Page 1, Part II, Line 9c

15

Applicable Restored Exclusion Amount

0209D

15

Applicable Exclusion Amount

Page 1, Part II, Line 9d

15

Applicable Exclusion Amount Computer-Generated

0209E

15

Applicable Credit Amount

Page 1, Part II, Line 9E

15

Applicable Credit Amount Computer-Generated

0210

15

Adjustment to Unified/Applicable Credit

Page 1, Part II, Line 10

0211

15

Allowable Unified/Applicable Credit

Page 1, Part II, Line 11

15

Allowable Unified/Applicable Credit Computer-Generated

0212

15

Balance After Unified/Applicable Adjustment

Page 1, Part II, Line 12

15

Balance After Unified/Applicable Adjustment Computer-Generated

02TBA

15

State Death Tax Credit (Table B amount)

Page 1, Part II, Line 13A (Tax Years 2002-2004) Table B figure preceding Line 13 (Page 1), Form 706.

15

State Death Tax Credit Computer-Generated

02SDC

15

State Death Tax Credit

Page 1, Part II, Line 13B (Tax Years 2002-2004)

15

State Death Tax Credit Computer-Generated

02BSD

15

Balance After State Death Tax Credit

Page 1, Part II, Line 14 (Tax Years 2002-2004)

15

Balance After State Death Tax Credit Computer-Generated

This field is transcribed from Page 1, Part II, Line 1, of the return and is verified by Code and Edit tax examiners.

It is transferred from Part V, Item number 13, of the Recapitulation schedule.

The amount transcribed will be either the taxpayer's amount or the examiner's corrected amount. It must be entered in dollars and cents or dollars only, whichever is applicable.

This line shows the total amount of assets owned by the decedent at death. After deductions are taken and certain gifts given during life are added back, this amount provides the basis upon which the estate tax (before credits or other adjustments) is calculated.

Field 0201 is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

If tax truly exceeds $9,999,999,999,999.99 SSPND with AC610.

Enter the maximum amount allowable on the original return. Recompute the tax data and enter the correct amount(s) in the fields. (Do Not Send Taxpayer Notice Code).

Annotate on the original return "Dummy Return prepared due to overflow documentation."

Prepare "Dummy Return" by computing and entering the remaining overflow amount(s) for the appropriate fields.

On top of the "Dummy Return" write "Prepared from Overflow Return" enter the data from the original returns CCC "G" in the signature area write "Signature on Original Return" . Put the DLN from the original return on the bottom of the dummy return. Attach routing slip to the complete "Dummy Return" send to batching for numbering and processing.

This field is transcribed from Part II, Line 2 of the return and is verified by Code and Edit examiners. It is transferred from Page 3, Part V, Item number 24 of the return. The amount transcribed will be either the taxpayer's amount or the examiner's corrected amounts.

After allowable deductions are taken and certain gifts given during life are added back, this amount provides the basis upon which the estate tax (before credits or other adjustments) is calculated.

Field 0202 is invalid if it is not all numeric or exceeds 9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 3a of the return. It is computed by subtracting Page 1, Part II, Line 2 from Line 1 (Fields 0202 and 0201). This field can be positive or zero.

Field 0203A is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 3b of the return. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

The state death tax credit for taxpayers’ dying after December 31, 2004 was repealed. In 2005 the State Death Tax Deduction against the value of the gross estate replaced the state death tax credit.

Field 0203B is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 3c of the return. It is computed by subtracting Page 1, Part II, Line 3b from Line 3a (Fields 0203B and 0203A). This field can be positive or zero.

This is the amount on which, after certain gifts given during life are added back, the estate tax (before credits or other adjustments) is calculated.

Field 0203C is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 4 of the return. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Estate and gift taxes have a unified tax structure. Tax is calculated on assets given as gifts after December 31, 1976, as well as assets owned at death. Therefore, those gifts not excludable under the Internal Revenue Code must be added to the taxable estate to decide the amount upon which estate tax can be imposed.

Field 0204 is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 5 of the return. It is computed by adding Page 1, Part II, Lines 3 C and 4 (Fields 0203 C and 0204).

This is the amount on which the tentative tax is calculated.

Field 0205 is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 6. The computer figures the tax in this field by using the amount in Net Taxable Estate Computer and Tax Table A on Page 4 of the instructions.

This is the basic estate tax, subject to adjustments.

Field 0206 is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 7. It is the total amount of gift tax paid or payable on gifts made after December 31, 1976.

Taxable gifts made after December 31, 1976, are taken into account in computing the estate tax upon death. The gift and estate taxes are not separate taxes. Rather, they are designed to impose a tax or transfer of assets, whether made during life or upon death. This line gives a credit against estate tax for gift taxes payable. Were this not so, an individual would have to pay tax on the gift twice, once when they made the gift and again at death.

Field 0207 is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from Page 1, Part II, Line 8 (Field 0208). It is computed by subtracting Page 1, Part II, Line 7 from Line 6 (Fields 0207 and 0206).

See IRM 3.12.263.5.11, Field 0207- Aggregate Gift Tax, for the reasons this field allows gift taxes paid to be subtracted from estate tax.

Field 0208 is invalid if it is not all numeric or exceeds $9,999,999,999,999.99.

Check for coding and transcription errors and correct as needed.

This field is transcribed from (2011 and Prior revisions) Page 1, Part II, Line 9 (Field 0209). The computer will math verify this field by using the DOD (Field 01DOD) and the Unified Credit amounts.

The Unified Credit is similar to the standard deduction or personal exemptions allowed on an individual income tax return. Individuals do not pay income tax on income that is less than the total amount of the standard deduction or personal exemptions. Nor do they pay estate or gift taxes on gifts or bequests whose total tax is less than the Unified Credit. There are 2 differences between the Unified Credit and the standard deduction/personal exemption. First the Unified Credit is a credit against tax, not a deduction from income or assets. The credit is subtracted against the estate tax, not the total amount of the estate. Second, the Unified Credit is much larger than the standard deduction/personal exemption.