IRS Form 706-CE

What Is Us IRS Form 706-CE

IRS form 706-CE, known as the "Certificate of Payment of Foreign Death Tax," is a crucial document for executors of estates with international ties. This form aids in claiming a credit for foreign death taxes paid on estates transferred from a decedent who was either a U.S. citizen or resident at the time of their death.

When to Use IRS Form 706-CE

This form becomes relevant in the following scenarios:

• An estate executor has paid or is liable to pay a death tax to a foreign country.
• When the estate claims credit for foreign death taxes on the United States Estate Tax Return, Form 706.
• If the estate involves cross-border wealth transfer that falls under bilateral estate tax treaties.

How To Fill Out Us IRS Form 706-CE

How to Fill Out IRS form 706-CE: A Step-by-Step Guide

Step 1: Gather Relevant Documents

Before filling out Form 706-CE, ensure you have all the necessary documents. These may include the foreign death tax return, receipt or canceled check for the payment of the foreign death tax, and any related legal documents or correspondence with the foreign tax authority.

Step 2: Provide the Decedent's Information

On the top of Form 706-CE, enter the decedent's full name, country of citizenship at the time of death, country of legal residence (domicile) at the time of death, and last address.

Step 3: Enter the Executor's Information

Fill in the executor's full name and address. The executor is the individual responsible for administering the decedent's estate.

Step 4: Death and Tax Information

Input the decedent's social security number and date of death. Then proceed to Line 1 and specify the name of the foreign government imposing the tax. On-Line 2, state the amount of death tax finally determined by that government, excluding any interest or penalty and showing the amount in foreign currency.

Step 5: List of Taxed Property

In Line 5, provide a description, location, and value of the property that was subject to the death tax as recognized by the foreign government. Ensure this is noted in foreign currency. If additional space is needed, attach separate sheets following the format on the form.

Step 6: Refund Information

On-Line 6, answer whether any refund of the death tax on Line 2 has been claimed or allowed. If 'Yes,' specify if a refund was allowed, the claim was rejected, or if consideration is pending.

Step 7: Credits and Reductions

Line 7 must explain if any credit against or reduction of the death tax shown on Line 2 is pending or was allowed. Mention if property was taxed at more than one rate or if more than one inheritance was taxed. Attach additional sheets if necessary.

Step 8: Sign and Date

Sign and date the form at the bottom to certify under the penalties of perjury that the information provided is correct to the best of your knowledge.

When to File Us IRS Form 706-CE

The timing of filing IRS form 706-CE is associated with filing the United States Estate Tax Return, form 706. Executors must file form 706-CE to claim the credit for the foreign death tax:

• Concurrently with form 706, if the amount of the foreign death tax has been finalized and paid
• After filing form 706, if awaiting a determination or payment of the foreign death tax.
• The form should be filed as soon as the foreign death tax obligation is established to avoid delays in the estate tax return processing. Executors must also be aware of the statute of limitations for claiming the credit, generally four years from the date the U.S. Estate Tax Return was filed or four years from the original due date if the return was filed early.