Updated October 18, 2026. Quick answer: Lines 1 to 8 of Part II carry the taxable estate from Part IV, add taxable gifts, look up a tentative tax, and subtract the tax on the gifts to reach the gross estate tax. The unified credit is then subtracted to leave the balance on line 8. The tentative tax comes from a rate table in the Form 706 instructions.
What lines 1 to 8 do
The instructions describe the sequence: “Reduce the Part V total by the allowable deductions to derive the taxable estate on Part IV”, and then “figure the tax due using Part II.” The whole return is explained on the Form 706-NA page.
The form captions run in order. Line 1 is “Taxable estate from Part IV, line 10”. Line 2 is “Total taxable gifts of tangible or intangible property located in the U.S.” transferred by the decedent after December 31, 1976 “and not included in the gross estate (see section 2511)”. Line 3 is “Total. Add lines 1 and 2”.
Lines 4 and 5: tentative tax
Line 4 is “Tentative tax on the amount on line 3” and line 5 is “Tentative tax on the amount on line 2”. The instructions say how to find each: “To determine the tentative tax on the amount on line 2 (to be entered on line 5) and the tentative tax on the amount on line 3 (to be entered on line 4)”, “in the version of the Instructions for Form 706 that corresponds to the decedent’s date of death.” The rate schedule lives in the Form 706 instructions, and the Form 706 page covers that return.
Line 6: gross estate tax
The caption is “Gross estate tax. Subtract line 5 from line 4”. Line 4 is the tax on the estate plus the gifts, and line 5 is the tax on the gifts alone, so the result is the tax attributed to the estate.
Line 7: unified credit
The caption is “Unified credit. Enter smaller of line 6 amount or maximum allowed”. The instructions say “The unified credit is allowed for the smaller of the line 6 amount or the maximum unified credit.” “In general, the maximum unified credit is $13,000.”
Special cases exist. The instructions address citizens of U.S. territories: “For a citizen of a U.S. territory (see section 2209), the maximum unified credit is the greater of:” and treaties: “If the unified credit is affected by a treaty, see section 2102(b)(3)(A).” If the decedent made earlier gifts: “Any amount previously allowed as a unified credit against the gift tax will reduce, dollar for dollar, the unified credit allowed the estate”. Read the instructions for the exact formula in those cases.
Line 8: balance
Line 8 is captioned “Balance. Subtract line 7 from line 6”. It is the amount from which the credits on Part II lines 9 to 18 are subtracted.
Where the number comes from
Line 1 comes straight from Part IV, line 10, which the form tells you to enter on Part II, line 1. Line 2 comes from the decedent’s gift tax returns. The instructions say “Also attach copies of all available U.S. gift tax returns the decedent filed.” Lines 4 and 5 come from the rate schedule in the Form 706 instructions. The gift returns are explained on the Form 709 who must file page.
Where it goes next
The balance on line 8 moves to the credits and payment lines. Line 13 reads “Net estate tax. Subtract line 12 from line 8”, which is covered on Part II lines 9 to 18. The other parts that feed this one are Part IV and Part V.
Edition and line numbers
This page reads Form 706-NA revision dated August 2025 and the Instructions for Form 706-NA revision dated September 2025. Those are the current files irs.gov served on 2026-10-18. The form’s own caption reads “(Rev. August 2025)” and the instructions open with “(Rev. September 2025)”. The form states “To be filed for decedents dying after December 31, 2024.” Check the revision date printed on your own Form 706-NA and use that revision’s line numbers, because a different revision can number or word its lines differently.
Common mistakes
- Swapping the two tentative tax lines. The instructions say “the tentative tax on the amount on line 2 (to be entered on line 5)”.
- Using a rate table from the wrong year. The instructions say to use the Form 706 instructions “that corresponds to the decedent’s date of death.”
- Entering a credit larger than allowed on line 7. The instructions say “The unified credit is allowed for the smaller of the line 6 amount or the maximum unified credit.”
Related: Form 706-NA, Form 706, Form 709 who must file, and estate tax calculator.
Sources
- Instructions for Form 706-NA (Rev. September 2025): https://www.irs.gov/pub/irs-pdf/i706na.pdf
- Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, Estate of Nonresident Not a Citizen of the United States (Rev. August 2025): https://www.irs.gov/pub/irs-pdf/f706na.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.