United States Estate (and Generation-Skipping Transfer) Tax Return

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Instructions for
Form 706-GS(D)
(Rev. August 2025)

Generation-Skipping Transfer Tax Return for Distributions
Section references are to the Internal Revenue Code
unless otherwise noted.

Future Developments

For the latest information about developments related to
Form 706-GS(D) and its instructions, such as legislation
enacted after they were published, go to IRS.gov/
Form706GSD.

What’s New
Part I, General information. Entry lines in this section
were reorganized and the address includes foreign
address entries.
Part II, Tax computation. Part III was moved to Part II,
and the overpayment line now includes option for direct
deposit.
Part III, Distributions. Part II was moved to Part III on the
second page of Form 706-GS(D) to allow more entry
lines.

General Instructions
Purpose of Form

Form 706-GS(D) is used by a skip person distributee to
calculate and report the tax due on distributions from a
trust that are subject to the generation-skipping transfer
(GST) tax.

Who Must File

In general, any skip person who receives a taxable
distribution from a trust must file Form 706-GS(D).
Trustees are required to report taxable distributions to skip
person distributees on Form 706-GS(D-1), Notification of
Distribution From a Generation-Skipping Trust.
If you receive a Form 706-GS(D-1) and the inclusion
ratio found on Part II, line 3, column(d), is zero for all
distributions, you do not need to file Form 706-GS(D). If
you are required to file Form 706-GS(D), you do not have
to include any distributions that have an inclusion ratio of
zero.

When To File

Extension of Time To File Certain Business Income Tax,
Information, and Other Returns. The extension is
automatic, so you do not have to sign the form or provide a
reason for your request. You must file Form 7004 on or
before the regular due date of Form 706-GS(D). See Form
7004 for more information.
Private delivery services (PDSs). Filers can use
certain PDSs designated by the IRS to meet the “timely
mailing as timely filing” rule for tax returns. Go to
IRS.gov/PDS for the current list of designated services.
The PDS can tell you how to get written proof of the
mailing date.
For the IRS mailing address to use if you’re using a
PDS, go to IRS.gov/PDSStreetAddresses.

!

CAUTION

PDSs can’t deliver items to P.O. boxes. You must
use the U.S. Postal Service to mail any item to an
IRS P.O. box address.

Where To File

File Form 706-GS(D) at the following address.
Department of the Treasury
Internal Revenue Service Center
Kansas City, MO 64999
If using a PDS, use this address.
Internal Revenue Submission Processing Center
333 W. Pershing
Kansas City, MO 64108

Penalties and Interest

Section 6651 provides penalties for both late filing and
late payment unless there is reasonable cause for the
delay. The law also provides penalties for willful attempts
to evade payment of tax.
A return is late when it is filed after the due date,
including extensions. The late filing penalty will not be
imposed if the taxpayer can show that the failure to file a
timely return is due to reasonable cause.

The GST tax on distributions is figured and reported on a
calendar year basis, regardless of your income tax
accounting period. Generally, you must file Form
706-GS(D) on or after January 1 but not later than April 15
of the year following the calendar year when the
distributions were made.

Reasonable cause determinations. If you receive a
notice about penalties and interest after you file Form
706-GS(D), send us an explanation and we will determine
if you meet reasonable cause criteria. Do not attach an
explanation when you file Form 706-GS(D). Explanations
attached to the return at the time of filing will not be
considered.

If you are not able to file the return by the due date, you
may request an automatic 6-month extension of time to
file by filing Form 7004, Application for Automatic

Section 6662 provides a penalty for underpayment of
GST taxes that exceeds $5,000, if the underpayment is
due to a valuation understatement. A substantial valuation

Apr 17, 2025

Instructions for Form 706-GS(D) (Rev. 8-2025) Catalog Number 10828G
Department of the Treasury Internal Revenue Service www.irs.gov

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understatement occurs when the reported value of
property listed on Form 706-GS(D) is 65% or less of the
actual value of the property. A gross valuation
understatement occurs when the reported value of
property listed on Form 706-GS(D) is 40% or less of the
actual value of the property.
Interest will be charged on taxes not paid by their due
date, even if an extension of time to file is granted. Interest
is also charged on any additions to tax imposed by section
6651 from the due date of the return (including any
extensions) until the addition to tax is paid.
Return preparer. Estate tax return preparers who
prepare any return or claim for refund that reflects an
understatement of tax liability due to an unreasonable
position are subject to a penalty equal to the greater of
$1,000 or 50% of the income derived (or to be derived) for
the preparation of each such return. Estate tax return
preparers who prepare a return or claim for refund that
reflects an understatement of tax liability due to willful or
reckless conduct are subject to a penalty of $5,000 or
75% of the income derived (or income to be derived),
whichever is greater, for the preparation of each such
return. See sections 6694(a) and 6694(b), the related
regulations, and Announcement 2009-15, 2009-11 I.R.B.
687 (available at IRS.gov/pub/irs-irbs/irb09-11.pdf), for
more information.

Signature

Either the distributee or an authorized representative must
sign Form 706-GS(D).
If you fill in your own return, leave the Paid Preparer
Use Only space blank. If someone prepares your return
and does not charge you, that person should not sign the
return.
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 distributee.
Note. A paid preparer may sign original or amended
returns by rubber stamp, mechanical device, or computer
software program.

Specific Instructions
Part I—General Information
Line 1a

If the skip person distributee is a trust, enter the name of
the trust here.

Line 1b

For skip person distributees who are individuals, enter the
distributee’s social security number (SSN) here and leave
line 1c blank. If the skip person distributee is a trust, see
the instructions for line 1c. Do not enter a number on both
line 1b and line 1c.
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Line 1c

If the skip person distributee is a trust, enter the trust’s
taxpayer identification number (TIN) and leave line 1b
blank. Do not enter a number on both line 1b and line 1c.

Line 2a

If the skip person distributee is a trust, enter the trustee’s
name here. If the skip person distributee is a minor or is
under some disability that precludes the individual from
filing the return, enter the name of the person who is
legally responsible for conducting the affairs of the
distributee, such as a parent or guardian. Also, include the
title or relationship to the distributee.

Lines 2b–2i

Enter the address at which you wish to receive
correspondence from the IRS regarding this return. If
there is an entry on line 2a, the address entered here will
normally be that of the person listed on line 2a, rather than
the individual or trust listed on line 1a.

Part II—Tax Computation

Note. Complete Part III before completing Part II.

Line 3

Add all amounts of transfer entered in Part III, line 11,
column (c), and, if needed, from additional sheets.

Line 4

You may deduct any adjusted allowable expenses
incurred in connection with the preparation of this Form
706-GS(D) or any other expenses incurred in connection
with the determination, collection, or refund of the GST tax
reported or which should have been reported on this
return from the amount of the distribution you received.
Adjusted allowable expenses are equal to the total
allowable expenses multiplied by the inclusion ratio. If you
have more than one inclusion ratio in Part II, column (d), of
Form 706-GS(D-1), prorate the total expense among the
inclusion ratios based on the relative value of each
distribution made at the various inclusion ratios.
You may deduct an expense even though it has not
been paid at the time the return is filed as long as the
amount of the expense is clearly ascertainable at that
time. If an additional allowable expense is incurred after
the return is filed, file Form 843, Claim for Refund and
Request for Abatement, to claim a refund.

Example. The following example illustrates the rules
above.
You listed three distributions in Part II of Form
706-GS(D). The value of the first distribution is $10,000
and has an inclusion ratio of 0.25. The value of the second
distribution is $20,000 and has an inclusion ratio of 0.33.
The value of the third distribution is $30,000 and has an
inclusion ratio of 0.50. You received the completed return
from the preparer along with the bill for the preparer’s fee
on April 14 and filed the return on April 15. You paid the
preparer’s $200 fee on April 20. The adjusted allowable
expense you should report on line 4 of Part III is $80,
calculated as follows.

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Line 10c

$10,000
× 200 = 33.33 × 0.25 = 8 (rounded)
$60,000
$20,000
× 200 = 66.67 × 0.33 = 22 (rounded)
$60,000
$30,000
× 200 = 100 × 0.50 = 50
$60,000
Adjusted allowable expense

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.

Line 10d

= 80

Line 6

Enter, using the table below, the applicable rate in effect at
the time the generation-skipping distribution occurred.
Table of Maximum Tax Rates
If the generation-skipping transfer
occurred:

The maximum
tax rate is:
49%

After December 31, 2003, but before January
1, 2005 . . . . . . . . . . . . . . . . . . . . . . . . .

48%

After December 31, 2004, but before January
1, 2006 . . . . . . . . . . . . . . . . . . . . . . . . .

47%

After December 31, 2005, but before January
1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . .

46%

After December 31, 2006, but before January
1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . .

45%

After December 31, 2009, but before January
1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . .

0%

After December 31, 2010, but before January
1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . .

35%

After December 31, 2012

40%

Line 9

If the amount on line 7 is more than the amount of line 8,
subtract line 8 from line 7. This is the amount you owe.
Make your check payable to “United States Treasury.”
Please write your SSN (or EIN), the year, and “Form
706-GS(D)” on the check to assist us in posting it to the
proper account. Enclose, but do not attach, the payment
with Form 706-GS(D).

Line 10a

If the amount on line 8 is more than the amount of line 7,
subtract line 7 from line 8. This is the amount you
overpaid.
If you want us to directly deposit the amount shown on
line 10a to your checking or savings account at a U.S.
bank or other U.S. financial institution (such as a mutual
fund, brokerage firm, or credit union), complete lines 10b
through 10d.

Line 10b

The IRS isn’t responsible for a lost refund if you
enter the wrong account information. Check with
CAUTION your financial institution to get the correct routing
and account numbers and to make sure your direct
deposit will be accepted.

!

After December 31, 2002, but before January
1, 2004 . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . .

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.

The routing number for your financial institution must be
nine digits. The first two digits must be 01 through 12 or 21
through 32. Otherwise, the direct deposit will be rejected
and a check sent instead.

Part III—Distributions

Report all the taxable distributions with inclusion ratios
greater than zero that you received during the year. The
trustee will report these distributions to you on Form
706-GS(D-1). Attach a copy of each Form 706-GS(D-1)
you received during the year to this return. You should also
keep a copy for your records.
If you need more space than is provided in Part III,
duplicate and use if additional entries are needed. Make
sure that the total tentative transfers from the continuation
sheet are included on line 3 of Part II.

Column (b)

In column (b), use the same item number that was used
for the corresponding distribution on Form 706-GS(D-1). If
you receive distributions from more than one trust, you
may need to repeat item numbers.

Column (c)

There may be instances when the trustee has either not
completed columns (e) (value) and (f) (tentative transfer)
of Form 706-GS(D-1) or when you disagree with the
amounts the trustee entered. If this occurs, attach a
statement to this return showing what you think are the
correct amounts and how you figured them.
To figure the tentative transfer (column (c) of this form),
multiply the applicable inclusion ratio from Form
706-GS(D-1), Part II, column (d), by the value of the
distribution. Use the following guidelines to determine the
value of the distribution.
The value of a distribution is its fair market value on the
date of distribution. Fair market value (FMV) is the price at
which the property would change hands between a willing
buyer and a willing seller when neither is forced to buy or
to sell, and both have reasonable knowledge of all the
relevant facts. FMV may not be determined by a forced
sale price nor by the sale price of the item in a market
other than that in which the item is most commonly sold to
the public. The location of the item must be taken into
account whenever appropriate.
Determine the value of the property distributed as of the
date of the distribution. The date of distribution is listed in
Form 706-GS(D-1), Part II, column (c).
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Reduce the value of any property being reported in Part
II by the amount of any consideration provided by the
distributee.
Value the stock of close corporations or inactive stock
on the basis of net worth, earnings, earning and dividend
capacity, and other relevant factors. For such stock, attach
balance sheets, particularly the one nearest the date of
the distribution, and statements of net earnings or
operating results and dividends paid for each of the 5
preceding years.
Reduce the reported value of real estate by the amount
of any outstanding lien against the property on the date of

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distribution. Attach copies of any such liens. Explain how
the reported values were determined and attach copies of
any appraisals.
For more information, see the Instructions for Form 706,
United States Estate (and Generation-Skipping Transfer)
Tax Return.
Go to IRS.gov/OrderForms to order current forms,
instructions, and publications; call 800-829-3676 to order
prior-year forms and instructions. Go to IRS.gov/Forms to
view, download, or print all the forms, instructions, and
publications you may need.