Part II—Tax Computation

In general, the estate tax is figured by applying the unified rates shown in Table A to the total of transfers both during life and at death, and then subtracting the gift taxes, as refigured based on the date of death rates.

Table A—Unified Rate Schedule

6 Instructions for Form 706 (Rev. 7-2026)

See Worksheet TG, the Line 4 Worksheet, and the Line 7 Worksheet.

Note: You must complete Part II—Tax Computation.

Line 1 If you elected alternate valuation on Part III, line 1, enter the amount you entered in the “Alternate value” column of Part V, item 13. Otherwise, enter the amount from the “Value at date of death” column.

Line 3b. State Death Tax Deduction You may take a deduction on line 3b for estate, inheritance, legacy, or succession taxes paid on any property included in the gross estate as the result of the decedent’s death to any state or the District of Columbia.

You may claim an anticipated amount of deduction and figure the federal estate tax on the return before the state death taxes have been paid. However, the deduction cannot be finally allowed unless you pay the state death taxes and claim the deduction within 4 years after the return is filed, or later (see section 2058(b)) if:

• A petition is filed with the Tax Court of the United States,

• You have an extension of time to pay under section 6161 or section 6166, or

• You file a claim for refund or credit of an overpayment which extends the deadline for claiming the deduction.

Note: The deduction is not subject to dollar limits.

If you make a section 6166 election to pay the federal estate tax in installments and make a similar election to pay the state death tax in installments, see section 2058(b) for exceptions and periods of limitation. If you transfer property other than cash to the state in payment of state inheritance taxes, the amount you may claim as a deduction is the lesser of the state inheritance tax liability discharged or the fair market value (FMV) of the property on the date of the transfer. For more information on the application of such transfers, see the principles discussed in Rev. Rul. 86-117, 1986-2 C.B. 157, prior to the repeal of section 2011.

Line 6 To figure the tentative tax on the amount on line 5, use Table A—Unified Rate Schedule and put the result on this line.

Lines 4 and 7 Three worksheets are provided to help you figure the entries for these lines. Worksheet TG—Taxable Gifts Reconciliation allows you to reconcile the decedent’s lifetime taxable gifts to figure totals that will be used for the Line 4 Worksheet and the Line 7 Worksheet.

You must have all of the decedent’s gift tax returns (Forms 709) before completing Worksheet TG—Taxable Gifts Reconciliation. The amounts needed for Worksheet TG can usually be found on the filed returns that were subject to tax. However, if any of the returns were audited by the IRS, use the amounts that were finally determined as a result of the audits.

In addition, you must make a reasonable effort to discover any gifts in excess of the annual exclusion made by the decedent (or on behalf of the decedent under a power of attorney) for which no Forms 709 were filed. Include the value of such gifts in column b of Worksheet TG. The annual exclusion per donee is as follows.

Send the following evidence to the IRS.

1. Certificate of the proper officer of the taxing state, or the District of Columbia, showing the following.

a. Total amount of tax imposed (before adding

interest and penalties and before allowing discount).

b. Amount of discount allowed.

c. Amount of penalties and interest imposed or

charged.

d. Total amount actually paid in cash.

e. Date of payment.

2. Any additional proof the IRS specifically requests. File the evidence requested above with the return, if possible. Otherwise, send it as soon as possible after the return is filed.

Instructions for Form 706 (Rev. 7-2026) 7

How to Complete the Line 7 Worksheet

Row (a). Beginning with the earliest year in which the taxable gifts were made, enter the tax period of prior gifts. If you filed returns for gifts made after 1981, enter the calendar year in Row (a) as (YYYY). If you filed returns for gifts made after 1976 and before 1982, enter the calendar quarters in Row (a) as (YYYY-Q). Row (b). Enter all taxable gifts made in the specified year. Enter all pre-1977 gifts in the pre-1977 column. Row (c). Enter the amount from Row (d) of the previous column. Row (d). Enter the sum of Row (b) and Row (c) from the current column. Row (e). Enter the amount from Row (f) of the previous column. Row (f). Enter the tax based on the amount in Row (d) of the current column using Table A—Unified Rate Schedule. Row (g). Subtract the amount in Row (e) from the amount in Row (f) for the current column. Row (h). Complete this row only if a DSUE amount was received from predeceased spouse(s) and was applied to lifetime gifts or if a Restored Exclusion Amount on taxable gifts to a same-sex spouse was applied to lifetime gifts (or both). Enter the sum of lines 2 and 3 from Schedule C on the Form 709 filed for the year listed in Row (a) for the amount to be entered in this row. Row (i). Enter the applicable amount from the Table of Basic Exclusion Amounts. Row (j). Enter the sum of Row (h) and Row (i). Row (k). Figure the applicable credit on the amount in Row (j) using Table A—Unified Rate Schedule, and enter here. Note: The entries in each column of Row (k) must be reduced by 20% of the amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977 (but no more than $6,000). Row (l). Add the amounts in Row (l) and Row (n) from the previous column.

Row (m). Subtract the amount in Row (l) from the amount in Row (k) to determine the amount of any available credit. Enter the result in Row (m). Row (n). Enter the lesser of the amounts in Row (g) or Row (m). Row (o). Subtract the amount in Row (n) from the amount in Row (g) for the current column. Row (p). Subtract the amount in Row (o) from the amount in Row (f) for the current column. Row (q). Enter the Cumulative Taxable Gift amount based on the amount in Row (p) using the Taxable Gift Amount Table. Row (r). If Row (o) is greater than zero in the applicable period, subtract Row (q) from Row (d). If Row (o) is not greater than zero, enter -0-.

Repeat for each year in which taxable gifts were made.

Caution: Remember to submit a copy of the Line 7 Worksheet when you file Form 706. If additional space is needed to report prior gifts, attach additional sheets.

Taxable Gift Amount Table

8 Instructions for Form 706 (Rev. 7-2026)

Instructions for Form 706 (Rev. 7-2026) 9

Note: In figuring the line 7 amount, do not include any tax paid or payable on gifts made before 1977. The line 7 amount is a hypothetical figure used to figure the estate tax.

Special treatment of split gifts. These special rules apply only if:

• The decedent’s spouse predeceased the decedent;

• The decedent’s spouse made gifts that were “split” with the decedent under the rules of section 2513;

• The decedent was the “consenting spouse” for those split gifts, as that term is used on Form 709; and

• The split gifts were included in the decedent’s spouse’s gross estate under section 2035.

If all four conditions above are met, do not include these gifts on Part II, line 4 and do not include the gift taxes payable on these gifts on Part II, line 7. These adjustments are incorporated into the worksheets.

Lines 9a Through 9e. Applicable Credit Amount (Formerly Unified Credit Amount) The applicable credit amount is allowable credit against estate and gift taxes. It is figured by determining the tentative tax on the applicable exclusion amount, which is the amount that can be transferred before an estate tax liability will be incurred.

The applicable exclusion amount equals the total of lines 9a, 9b, and 9c. See Lines 9d and 9e, applicable exclusion and credit amount , later, for more information.

Worksheet TG—Taxable Gifts Reconciliation

Worksheet TG—Taxable Gifts Reconciliation (To be used for lines 4 and 7 of the Tax Computation)

Line 9a, basic exclusion amount. In 2026, the basic exclusion amount, as adjusted for inflation under section 2010(c)(3), is $15,000,000.

Line 9b, DSUE. If the decedent had a spouse who died after 2010, whose estate did not use all of its applicable exclusion against gift or estate tax liability, a DSUE amount may be available for use by the decedent’s estate. If the predeceased spouse died in 2011, the DSUE amount was figured and attached to the predeceased spouse’s Form 706. If the predeceased spouse died in 2012 or after, this amount is found in Part VI, Section C, of the Form 706 filed by the estate of the decedent’s predeceased spouse. The amount to be entered on line 9b is figured in Part VI, Section D, line 4.

Line 9c, restored exclusion amount. If a decedent made a taxable gift during the decedent’s lifetime to the decedent’s same-sex spouse and that transfer resulted in a reduction of the decedent’s available applicable exclusion amount, the amount of the applicable exclusion that was reduced can be restored. If the applicable exclusion was previously restored on a Form 709, enter the value on Schedule C, line 3, of Form 709. If the applicable exclusion has not yet been previously restored, follow the directions in the instructions for Form 709, Schedule C, to determine the restored exclusion amount. The restored exclusion amount is entered on line 9c.

Lines 9d and 9e, applicable exclusion and credit amount. The total of lines 9a, 9b, and 9c is entered on line 9d. If the amounts entered on both lines 9b and 9c are zero, enter $5,945,800 on line 9e. Otherwise, determine

b. Total taxable gifts for period (see Note )

Note: For the definition of a taxable gift, see section 2503. Follow Form 709. That is, include only the decedent’s one-half of split gifts, whether the gifts were made by the decedent or the decedent’s spouse. In addition to gifts reported on Form 709, you must include any taxable gifts in excess of the annual exclusion that were not reported on Form 709.

Gifts made

a. Calendar year or

calendar quarter

after June 6,

1932, and before

c. d. e. f. Taxable amount Taxable amount included Gift tax paid by Gift tax paid by included in column in column b for gifts decedent on gifts in decedent’s spouse

1. Total taxable b for gifts included that qualify for “special column d on gifts in column c gifts made in the gross estate treatment of split gifts” before 1977 described below

c. Taxable amount included in column

b for gifts included

in the gross estate

column d

d. Taxable amount included

in column b for gifts that qualify for “special

treatment of split gifts”

described below

e. Gift tax paid by decedent on gifts in

1977

Gifts made

after

1976

2. Totals for gifts made after 1976

Line 4 Worksheet—Adjusted Taxable Gifts Made After 1976

1. Taxable gifts made after 1976. Enter the amount from Worksheet TG, line 2, column b . . . . . . . . . . . . . . . . . . . . . 1.

2. Taxable gifts made after 1976 reportable on Schedule G (Form 706). Enter the amount from Worksheet TG, line 2, column c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.

3. Taxable gifts made after 1976 that qualify for “special treatment.” Enter the amount from Worksheet TG, line 2, column d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.

4. Add lines 2 and 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.

5. Adjusted taxable gifts. Subtract line 4 from line 1. Enter here and on Form 706, Part II, line 4 . . . . . . . . . . . . . . . . . 5.

10 Instructions for Form 706 (Rev. 7-2026)

Line 7 Worksheet—Submit a copy with Form 706

1 Row (a): For annual returns, enter the tax period as (YYYY). For quarterly returns, enter tax period as (YYYY-Q).
2 Row (c): Enter amount from Row (d) of the previous column.
3 Row (e): Enter amount from Row (f) of the previous column.
4 Row (k): Figure the applicable credit on the amount in Row (j), using Table A—Unified Rate Schedule, and enter here. (For each column in Row (k), subtract 20% of any
amount allowed as a specific exemption for gifts made after September 8, 1976, and before January 1, 1977.)

the applicable credit on the amount on line 9d by using Table A—Unified Rate Schedule and enter the result on line 9e.

Line 10. Adjustment to Applicable Credit If the decedent made gifts (including gifts made by the decedent’s spouse and treated as made by the decedent by reason of gift splitting) after September 8, 1976, and before January 1, 1977, for which the decedent claimed a specific exemption, the applicable credit amount on this estate tax return must be reduced. The reduction is

figured by entering 20% of the specific exemption claimed for these gifts.

Note: The specific exemption was allowed by section 2521 for gifts made before January 1, 1977.

If the decedent did not make any gifts between September 8, 1976, and January 1, 1977, or if the decedent made gifts during that period but did not claim the specific exemption, enter zero.

Instructions for Form 706 (Rev. 7-2026) 11

Line 13 Enter the total credit for foreign death taxes from Schedule P (Form 706), line 11. Attach Form(s) 706-CE.

Line 14 Enter the total credit for tax on prior transfers from Schedule Q (Form 706), line 6.

Line 15 Enter the credit taken for federal gift taxes imposed by chapter 12 of the Code, and the corresponding provisions of prior laws, on certain transfers the decedent made before January 1, 1977, that are included in the gross estate. The credit cannot be more than the amount figured by the following formula.

Gross estate tax minus (the sum of the state death taxes and unified credit)

x

Value of included

Value of gross estate minus (the sum of the gift deductions for charitable, public, and similar gifts and bequests and marital deduction)

For more information, see the regulations under section 2012. This computation may be made using Form 4808. Attach a copy of a completed Form 4808 or the computation of the credit. Also, attach all available copies of Forms 709 filed by the decedent, with “Exhibit to Estate Tax Return” entered across the top of the first page of each, to help verify the amounts entered on lines 4 and 7, and the amount of credit taken (on line 15) for pre-1977 federal gift taxes.

Line 16 Enter the Canadian marital credit.

A nonrefundable marital credit may be allowed if the executor elects this treaty benefit and waives the benefit of any estate tax marital deduction allowable under U.S. law. The credit amount is generally limited to the lesser of:

• The unified credit allowed to the estate (before reduction for any gift tax unified credit), or

• The amount of estate tax that would otherwise be imposed by the United States on the transfer of qualifying property to the surviving spouse.

Also, attach a statement to the return that refers to the treaty, waives qualifying domestic trust (QDOT) rights, and shows the computation of the marital credit. See the 1995 Canadian income tax treaty protocol for details on figuring the credit.

Line 22. Tax Due The estate and GST taxes are due within 9 months of the date of the decedent’s death, unless an extension of time to pay was granted.

Making a Payment

The IRS recommends paying electronically whenever possible. Options to pay electronically include any of the payment options below. Payments of U.S. tax must be remitted to the IRS in U.S. dollars. Digital assets are not accepted. Also, go to IRS.gov/Payments and

Frequently asked questions on estate taxes for more detailed information.

Note: The IRS uses the latest encryption technology to ensure that electronic payments you make are safe and secure. Paying electronically is quick and easy.

EFTPS. Payment of the tax due may be submitted electronically through Electronic Federal Tax Payment System (EFTPS). EFTPS is a free service of the Department of the Treasury. See IRS.gov/EFTPS and EFTPS.gov for more information.

Same-day wire. Payment of the tax due shown on Form 706 may be submitted electronically through same-day wire from your financial institution. Contact your financial institution for availability, cost, and time frames. See IRS.gov/SameDayWire and How do I make an electronic payment under Frequently asked questions on estate taxes, on IRS.gov for the worksheet and more information.

Paying by check. Make the check payable to “United States Treasury.” Write the decedent’s name, SSN (or TIN, if applicable), and “Form 706” on the check to assist us in posting it to the proper account. See IRS.gov/PayByMail for more information.

Paying by cash. You may be able to pay your balance due with cash at participating retail stores. See IRS.gov/ PayCash for more information.

Line 23. Overpayment If you have access to U.S. banking services, you should use direct deposit for any refunds, whenever possible. See IRS.gov/ModernPayments and IRS.gov/DirectDeposit for more information.

Direct deposit is available for this form. If there is an overpayment when filing your return, complete Part II, lines 23b, 23c, and 23d to input your direct deposit information.

Line 23a

If line 23a is under $1, we will send a refund only on written request.

Line 23b

The routing number must be nine digits. The first two digits must be 01 through 12 or 21 through 32. Ask your financial institution for the correct routing number to enter on line 23b if:

• The routing number on a deposit slip is different from the routing number on your checks,

• Your deposit is to a savings account that doesn’t allow you to write checks, or

• Your checks state they are payable through a financial institution different from the one at which you have your checking account.

Line 23c

Check the appropriate box for the type of account. Don’t check more than one box. You must check the correct box to ensure your deposit is accepted.

12 Instructions for Form 706 (Rev. 7-2026)

Line 23d

The account number can be up to 17 characters (both numbers and letters). Include hyphens but omit spaces and special symbols. Enter the number from left to right and leave any unused boxes blank. Don’t include the check number.

Signature(s) Form 706 must be signed. The executor who files the return must, in every case, sign the declaration under penalties of perjury. The executor may use Form 2848 to authorize another person to act for the executor before the IRS. See Representation Authorization , earlier, and the Instructions for Form 2848, for more information

Caution: If there is more than one executor, all listed executors are responsible for the return as filed and are liable for penalties imposed for erroneous or false returns. However, it is sufficient for only one of the co-executors to sign the return.

Paid Preparer Use Only Generally, anyone who is paid to prepare the return must sign the return in the space provided and fill in the Paid Preparer Use Only area. See section 7701(a)(36)(B) for exceptions.

In addition to signing and completing the required information, the paid preparer must give a copy of the completed return to the executor.

Note: A paid preparer may sign original or supplemental returns by rubber stamp, mechanical device, or computer software program.