Form Schedule A Schedule A Real estate

Form 706 (Rev. 9-2009)

Decedent’s Social Security Number

Estate of:

SCHEDULE A—Real Estate
● For jointly owned property that must be disclosed on Schedule E, see the instructions on the reverse side of Schedule E.
● Real estate that is part of a sole proprietorship should be shown on Schedule F.
● Real estate that is included in the gross estate under section 2035, 2036, 2037, or 2038 should be shown on
Schedule G.
● Real estate that is included in the gross estate under section 2041 should be shown on Schedule H.
● If you elect section 2032A valuation, you must complete Schedule A and Schedule A-1.
Item
number

Description

Alternate
valuation date

Alternate value

Value at date of death

1

Total from continuation schedules or additional sheets attached to this schedule
TOTAL. (Also enter on Part 5—Recapitulation, page 3, at item 1.)
(If more space is needed, attach the continuation schedule from the end of this package or additional sheets of the same size.)
(See the instructions on the reverse side.)

Schedule A—Page 4

Form 706 (Rev. 9-2009)

Instructions for Schedule A—Real Estate
If the total gross estate contains any real estate, you must
complete Schedule A and file it with the return. On
Schedule A, list real estate the decedent owned or had
contracted to purchase. Number each parcel in the
left-hand column.
Describe the real estate in enough detail so that the IRS
can easily locate it for inspection and valuation. For each
parcel of real estate, report the area and, if the parcel is
improved, describe the improvements. For city or town
property, report the street and number, ward, subdivision,
block and lot, etc. For rural property, report the township,
range, landmarks, etc.
If any item of real estate is subject to a mortgage for
which the decedent’s estate is liable, that is, if the
indebtedness may be charged against other property of
the estate that is not subject to that mortgage, or if the
decedent was personally liable for that mortgage, you
must report the full value of the property in the value

column. Enter the amount of the mortgage under
“Description” on this schedule. The unpaid amount of the
mortgage may be deducted on Schedule K.
If the decedent’s estate is not liable for the amount of
the mortgage, report only the value of the equity of
redemption (or value of the property less the
indebtedness) in the value column as part of the gross
estate. Do not enter any amount less than zero. Do not
deduct the amount of indebtedness on Schedule K.
Also list on Schedule A real property the decedent
contracted to purchase. Report the full value of the
property and not the equity in the value column. Deduct
the unpaid part of the purchase price on Schedule K.
Report the value of real estate without reducing it for
homestead or other exemption, or the value of dower,
curtesy, or a statutory estate created instead of dower or
curtesy.
Explain how the reported values were determined and
attach copies of any appraisals.

Schedule A Examples
In this example, alternate valuation is not adopted; the date of death is January 1, 2009.
Item
number

1

2

Description

Alternate
valuation date

Alternate
value

Value at
date of death

House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent
of $8,100 due at end of each quarter, February 1, May 1, August 1, and November
1. Value based on appraisal, copy of which is attached

$550,000

Rent due on item 1 for quarter ending November 1, 2008, but not collected at date
of death

8,100

Rent accrued on item 1 for November and December 2008

5,400

House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800
payable monthly. Value based on appraisal, copy of which is attached

375,000
1,800

Rent due on item 2 for December 2008, but not collected at date of death

In this example, alternate valuation is adopted; the date of death is January 1, 2009.
Item
number

1

Description

House and lot, 1921 William Street NW, Washington, DC (lot 6, square 481). Rent
of $8,100 due at end of each quarter, February 1, May 1, August 1, and
November 1. Value based on appraisal, copy of which is attached. Not disposed of
within 6 months following death
Rent due on item 1 for quarter ending November 1, 2008, but not collected until
February 1, 2009

2

Alternate
valuation date

7/1/09

2/1/09

Alternate
value

Value at
date of death

$535,000

$550,000

8,100

8,100

Rent accrued on item 1 for November and December 2008, collected on
February 1, 2009

2/1/09

5,400

5,400

House and lot, 304 Jefferson Street, Alexandria, VA (lot 18, square 40). Rent of $1,800
payable monthly. Value based on appraisal, copy of which is attached. Property
exchanged for farm on May 1, 2009

5/1/09

369,000

375,000

Rent due on item 2 for December 2008, but not collected until February 1, 2009

2/1/09

1,800

1,800

Schedule A—Page 5

Form 706 (Rev. 9-2009)

Instructions for Schedule A-1. Section
2032A Valuation

specially valued property received by the skip person at their
special-use value and one showing the same interests at their
FMV.

The election to value certain farm and closely held business
property at its special-use value is made by checking “Yes” on
Form 706, Part 3—Elections by the Executor, line 2. Schedule
A-1 is used to report the additional information that must be
submitted to support this election. In order to make a valid
election, you must complete Schedule A-1 and attach all of the
required statements and appraisals.
For definitions and additional information concerning
special-use valuation, see section 2032A and the related
regulations.

If the skip person received interests in specially valued
property that were shown on Schedule R-1, show these interests
on the Schedule R, Parts 2 and 3 worksheets, as appropriate.
Do not use Schedule R-1 as a worksheet.

Part 1. Type of Election
Estate and GST tax elections. If you elect special-use valuation
for the estate tax, you must also elect special-use valuation for
the GST tax and vice versa.
You must value each specific property interest at the same
value for GST tax purposes that you value it at for estate tax
purposes.
Protective election. To make the protective election described
in the separate instructions for Part 3—Elections by the
Executor, line 2, you must check this box, enter the decedent’s
name and social security number in the spaces provided at the
top of Schedule A-1, and complete Part 2. Notice of Election,
line 1 and lines 3 and 4, column A. For purposes of the
protective election, list on line 3 all of the real property that
passes to the qualified heirs even though some of the property
will be shown on line 2 when the additional notice of election is
subsequently filed. You need not complete columns B through D
of lines 3 and 4. You need not complete any other line entries on
Schedule A-1. Completing Schedule A-1 as described above
constitutes a Notice of Protective Election as described in
Regulations section 20.2032A-8(b).

Part 2. Notice of Election
Line 10. Because the special-use valuation election creates a
potential tax liability for the recapture tax of section 2032A(c),
you must list each person who receives an interest in the
specially valued property on Schedule A-1. If there are more
than eight persons who receive interests, use an additional sheet
that follows the format of line 10. In the columns “Fair market
value” and “Special-use value,” you should enter the total
respective values of all the specially valued property interests
received by each person.

GST Tax Savings
To compute the additional GST tax due upon disposition (or
cessation of qualified use) of the property, each “skip person”
(as defined in the instructions to Schedule R) who receives an
interest in the specially valued property must know the total GST
tax savings on all of the interests in specially valued property
received. This GST tax savings is the difference between the
total GST tax that was imposed on all of the interests in specially
valued property received by the skip person valued at their
special-use value and the total GST tax that would have been
imposed on the same interests received by the skip person had
they been valued at their fair market value (FMV).
Because the GST tax depends on the executor’s allocation of
the GST exemption and the grandchild exclusion, the skip
person who receives the interests is unable to compute this GST
tax savings. Therefore, for each skip person who receives an
interest in specially valued property, you must attach worksheets
showing the total GST tax savings attributable to all of that
person’s interests in specially valued property.
How to compute the GST tax savings. Before computing each
skip person’s GST tax savings, you must complete Schedules R
and R-1 for the entire estate (using the special-use values).
For each skip person, you must complete two Schedules R
(Parts 2 and 3 only) as worksheets, one showing the interests in

Completing the special-use value worksheets. On
Schedule R, Parts 2 and 3, lines 2 through 4 and 6, enter -0-.
Completing the fair market value worksheets.
● Schedule R, Parts 2 and 3, lines 2 and 3, fixed taxes and other
charges. If valuing the interests at their FMV (instead of
special-use value) causes any of these taxes and charges to
increase, enter the increased amount (only) on these lines and
attach an explanation of the increase. Otherwise, enter -0-.
● Schedule R, Parts 2 and 3, line 6—GST exemption allocation.
If you completed Schedule R, Part 1, line 10, enter on line 6 the
amount shown for the skip person on the line 10 special-use
allocation schedule you attached to Schedule R. If you did not
complete Schedule R, Part 1, line 10, enter -0- on line 6.
Total GST tax savings. For each skip person, subtract the tax
amount on line 10, Part 2 of the special-use value worksheet
from the tax amount on line 10, Part 2 of the fair market value
worksheet. This difference is the skip person’s total GST tax
savings.

Part 3. Agreement to Special Valuation Under
Section 2032A
The agreement to special valuation by persons with an interest in
property is required under section 2032A(a)(1)(B) and (d)(2) and
must be signed by all parties who have any interest in the
property being valued based on its qualified use as of the date
of the decedent’s death.
An interest in property is an interest that, as of the date of the
decedent’s death, can be asserted under applicable local law so
as to affect the disposition of the specially valued property by
the estate. Any person who at the decedent’s death has any
such interest in the property, whether present or future, or
vested or contingent, must enter into the agreement. Included
are owners of remainder and executory interests; the holders of
general or special powers of appointment; beneficiaries of a gift
over in default of exercise of any such power; joint tenants and
holders of similar undivided interests when the decedent held
only a joint or undivided interest in the property or when only an
undivided interest is specially valued; and trustees of trusts and
representatives of other entities holding title to, or holding any
interests in the property. An heir who has the power under local
law to caveat (challenge) a will and thereby affect disposition of
the property is not, however, considered to be a person with an
interest in property under section 2032A solely by reason of that
right. Likewise, creditors of an estate are not such persons
solely by reason of their status as creditors.
If any person required to enter into the agreement either
desires that an agent act for him or her or cannot legally bind
himself or herself due to infancy or other incompetency, or due
to death before the election under section 2032A is timely
exercised, a representative authorized by local law to bind the
person in an agreement of this nature may sign the agreement
on his or her behalf.
The Internal Revenue Service will contact the agent
designated in the agreement on all matters relating to continued
qualification under section 2032A of the specially valued real
property and on all matters relating to the special lien arising
under section 6324B. It is the duty of the agent as
attorney-in-fact for the parties with interests in the specially
valued property to furnish the IRS with any requested
information and to notify the IRS of any disposition or cessation
of qualified use of any part of the property.

Schedule A-1—Page 6

Form 706 (Rev. 9-2009)

Checklist for Section 2032A Election
If you are going to make the special-use
valuation election on Schedule A-1, please
use this checklist to ensure that you are
providing everything necessary to make a
CAUTION
valid election.
To have a valid special-use valuation election under
section 2032A, you must file, in addition to the federal
estate tax return, (a) a notice of election (Schedule A-1,
Part 2), and (b) a fully executed agreement (Schedule
A-1, Part 3). You must include certain information in
the notice of election. To ensure that the notice of
election includes all of the information required for a
valid election, use the following checklist. The checklist
is for your use only. Do not file it with the return.
1. Does the notice of election include the decedent’s
name and social security number as they appear on
the estate tax return?
2. Does the notice of election include the relevant
qualified use of the property to be specially valued?
3. Does the notice of election describe the items of
real property shown on the estate tax return that are to
be specially valued and identify the property by the
Form 706 schedule and item number?
4. Does the notice of election include the FMV of the
real property to be specially valued and also include its
value based on the qualified use (determined without
the adjustments provided in section 2032A(b)(3)(B))?
5. Does the notice of election include the adjusted
value (as defined in section 2032A(b)(3)(B)) of (a) all real
property that both passes from the decedent and is
used in a qualified use, without regard to whether it is
to be specially valued, and (b) all real property to be
specially valued?
6. Does the notice of election include (a) the items of
personal property shown on the estate tax return that
pass from the decedent to a qualified heir and that are
used in qualified use and (b) the total value of such
personal property adjusted under section
2032A(b)(3)(B)?
7. Does the notice of election include the adjusted
value of the gross estate? (See section 2032A(b)(3)(A).)
8. Does the notice of election include the method
used to determine the special-use value?
9. Does the notice of election include copies of
written appraisals of the FMV of the real property?
10. Does the notice of election include a statement
that the decedent and/or a member of his or her family
has owned all of the specially valued property for at

Schedule A-1—Page 7

least 5 years of the 8 years immediately preceding the
date of the decedent’s death?
11. Does the notice of election include a statement
as to whether there were any periods during the 8-year
period preceding the decedent’s date of death during
which the decedent or a member of his or her family
did not (a) own the property to be specially valued,
(b) use it in a qualified use, or (c) materially participate
in the operation of the farm or other business? (See
section 2032A(e)(6).)
12. Does the notice of election include, for each item
of specially valued property, the name of every person
taking an interest in that item of specially valued
property and the following information about each such
person: (a) the person’s address, (b) the person’s
taxpayer identification number, (c) the person’s
relationship to the decedent, and (d) the value of the
property interest passing to that person based on both
FMV and qualified use?
13. Does the notice of election include affidavits
describing the activities constituting material
participation and the identity of the material
participants?
14. Does the notice of election include a legal
description of each item of specially valued property?
(In the case of an election made for qualified
woodlands, the information included in the notice of
election must include the reason for entitlement to the
Woodlands election.)
Any election made under section 2032A will not be
valid unless a properly executed agreement (Schedule
A-1, Part 3) is filed with the estate tax return. To
ensure that the agreement satisfies the requirements
for a valid election, use the following checklist.
1. Has the agreement been signed by each qualified
heir having an interest in the property being specially
valued?
2. Has every qualified heir expressed consent to
personal liability under section 2032A(c) in the event of
an early disposition or early cessation of qualified use?
3. Is the agreement that is actually signed by the
qualified heirs in a form that is binding on all of the
qualified heirs having an interest in the specially valued
property?
4. Does the agreement designate an agent to act for
the parties to the agreement in all dealings with the
IRS on matters arising under section 2032A?
5. Has the agreement been signed by the designated
agent and does it give the address of the agent?