Updated October 18, 2026. Quick answer: Schedule P supports the credit for foreign death taxes and Schedule Q supports the credit for tax on prior transfers. Each is filed only if its credit is claimed in Part II, and the figures come from the foreign tax records and the earlier estate’s return.
When each schedule is filed
For Schedule P: “If you claim a credit on Form 706, Part II, line 13, complete Schedule P (Form 706) and file it with the return.” The form captions that line “Credit for foreign death taxes from Schedule P (Form 706). Attach Form(s) 706-CE”. For Schedule Q: “Complete Schedule Q (Form 706) and file it with the return if you claim a credit on Form 706, Part II, line 14.” The form captions line 14 “Credit for tax on prior transfers from Schedule Q (Form 706)”. The return is explained on the Form 706 page, and the credit lines on Form 706 Part II lines 13 to 23.
Schedule P: who and what
“The credit for foreign death taxes is allowable only if the decedent was a citizen or resident of the United States.” “The credit is authorized either by statute or by treaty.” “Attach Form(s) 706-CE to Form 706 to support any credit you claim.” “If the foreign government refuses to certify Form 706-CE, file it directly with the IRS as instructed on the Form 706-CE.”
“If a credit for death taxes paid in more than one foreign country is allowable, a separate computation of the credit must be made for each foreign country.” “Attach a separate Schedule P (Form 706) for each foreign country.” “Convert death taxes paid to the foreign country into U.S. dollars by using the rate of exchange in effect at the time each payment of foreign tax is made.”
“The total credit allowable for any property, whether subjected to tax by one or more than one foreign country, is limited to the amount of the federal estate tax attributable to the property.” “The anticipated amount of the credit may be figured on the return, but the credit cannot finally be allowed until the foreign tax has been paid and a Form 706-CE evidencing payment is filed.”
Schedule P: lines 6 to 9
Line 6: “Enter the amount of the estate, inheritance, legacy, and succession taxes paid to the foreign country and its possessions or political subdivisions, attributable to property that is” “Situated in that country,” “Subjected to these taxes, and” “Included in the gross estate.” “Also, attach the computation of the amount entered on line 6.”
Line 7: “Enter the value of the gross estate, less the total of the deductions from Form 706, Part V, items 21 and 22.” Line 8: “Enter the value of the property situated in the foreign country that is subjected to the foreign taxes and included in the gross estate, less those portions of the deductions taken on Schedules M and O of Form 706 that are attributable to the property.” Line 9: “Subtract Form 706, Part II, line 15 from Form 706, Part II, line 12. Enter the balance on Schedule P (Form 706), line 9.” The deductions referred to are on the Schedule M and Schedule O pages.
On treaties: “If you are reporting any items on this return based on the provisions of a death tax treaty, you may have to attach a statement to this return disclosing the return position that is treaty based.” “Section 2014(g) provides that for credits for foreign death taxes, each U.S. territory is deemed a foreign country.”
Schedule Q: when a credit is allowed
The instructions define the terms: the transferee “means the decedent for whose estate this return is filed”. “If the transferee received property from a transferor who died within 10 years before or 2 years after the transferee, a credit is allowable on this return for all or part of the federal estate tax paid by the transferor’s estate for the transfer.”
“If the transferee was the transferor’s surviving spouse, no credit is allowed for property received from the transferor to the extent that a marital deduction was allowed to the transferor’s estate for the property.” “There is no credit for tax on prior transfers for federal gift taxes paid in connection with the transfer of the property to the transferee.”
Schedule Q: the maximum and the percentage
“The maximum amount of the credit is the smaller of:” “The amount of the estate tax of the transferor’s estate attributable to the transferred property, or” a second comparison that the instructions set out in two parts. On timing, the instructions first take the case “Where transferee predeceased the transferor.” “If not more than 2 years elapsed between the dates of death, the credit allowed is 100% of the maximum amount.” “If more than 2 years elapsed between the dates of death, no credit is allowed.” Where the transferor died first, “The percent of the maximum amount that is allowed as a credit depends on the number of years that elapsed between dates of death.” The instructions give a table of percentages by number of years, which this page does not reproduce.
Schedule Q: the worksheet
“A worksheet for Schedule Q (Form 706) is provided to allow you to figure the limits before completing Schedule Q (Form 706).” “You do not need to file the worksheet with Form 706, but keep it for your records.” “Part I of the worksheet and Schedule Q (Form 706) enable you to figure the credit for as many as three transferors.” The instructions name the worksheet by its title, Worksheet for Schedule Q, and its figures are not repeated here. “Most of the information to complete Part I of the worksheet should be obtained from the transferor’s Form 706.” On line 5: “Enter on line 5 the applicable marital deduction claimed for the transferor’s estate (from the transferor’s Form 706).”
Where the number comes from
For Schedule P the figures come from the foreign tax return and payment records, the certified Form 706-CE, and the Form 706 asset and deduction totals. For Schedule Q they come from the earlier estate’s Form 706 and this return, as the instructions say above.
Where it goes next
The Part II credit lines add up: “Total credits. Add lines 13 through 16”. The next caption is “Net estate tax. Subtract line 17 from line 12”. The instructions note that when both credits apply, “it will be necessary to complete Schedule Q (Form 706) before completing Schedule P (Form 706)”. See Form 706 Part II lines 13 to 23 for the rest of the computation, and the estate tax calculator for estimates.
Edition and line numbers
This page reads the Form 706 revision dated August 2025 and the Instructions for Form 706 revision dated July 2026. They are the current files irs.gov served on 2026-10-18, byte-identical to the copies this page was checked against. The form says “To be filed for decedents dying after December 31, 2024.” The instructions state “For decedents dying after December 31, 2025.” The instructions also explain how the schedules are packaged: “The schedules should be completed and attached to Form 706, as necessary.” Check the revision date printed on your Form 706 and the instruction edition for the year of death, and use the line numbers on that revision.
Common mistakes
- Filing one Schedule P for several countries. The instructions say “Attach a separate Schedule P (Form 706) for each foreign country.”
- Leaving off Form 706-CE. The instructions say “Attach Form(s) 706-CE to Form 706 to support any credit you claim.”
- Claiming a prior transfer credit too late. The instructions say “If more than 2 years elapsed between the dates of death, no credit is allowed.” where the transferee died first.
Related: Form 706, estate tax calculator, and estate planning glossary.
Sources
- Instructions for Form 706 (Rev. July 2026): https://www.irs.gov/pub/irs-pdf/i706.pdf
- Form 706 (Rev. August 2025), United States Estate (and Generation-Skipping Transfer) Tax Return: https://www.irs.gov/pub/irs-pdf/f706.pdf
Read from the IRS documents linked above on October 18, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.