706 Sch. U

Qualified Conservation Easement Exclusion

Agency
IRS
Revision
August 2025
Fillable fields
23
Pages
1
Official source
IRS form page
Checked
October 21, 2026
Fill 706 Sch. U online
Page 1 of form 706 Sch. U

Schedule U (Form 706): Qualified Conservation Easement Exclusion

Schedule U (Form 706) is attached to Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. The IRS About page says it is used to make an election to exclude a portion of the value of land that is subject to a qualified conservation easement under section 2031(c). The executor of the estate completes it.

The form says the executor is deemed to have made the election under section 2031(c)(6) by filing Schedule U and excluding qualifying conservation easements from the gross estate. The instructions say the exclusion is the lesser of the applicable percentage of the value of the land (after certain reductions) or $500,000, that the election is made on a timely filed Form 706, including extensions, and that once made it is irrevocable.

The amount on line 20 is also entered on Form 706, Part V, item 12. You can fill out Schedule U free in your browser on this page and download the result without an account.

Top of page 1 of Schedule U (Form 706): Qualified Conservation Easement Exclusion, as printed by IRS

What's on Schedule U (Form 706)

Header

The decedent's name as it appears on Form 706 and the decedent's Social Security number.

Part I: Election

A statement that the executor is deemed to have made the section 2031(c)(6) election by filing the schedule and excluding qualifying conservation easements.

Part II: General qualifications

Line 1 describes the land, line 2 asks whether the decedent or a family member owned it during the 3-year period ending on the date of death, and line 3 describes the easement.

Lines 4 to 10: values

Estate tax value of the land, earlier easements, retained development rights, 30% of the net figure on line 9, and the value of the easement claimed on line 10.

Lines 11 to 14: applicable percentage

A ratio of line 10 to line 8, figured to 3 decimal places, that sets the percentage on line 14. The form says the estate does not qualify if line 11 is equal to or less than 0.100.

Lines 15 to 20: exclusion

Reductions for the section 2055(f) deduction and indebtedness, the net value of the land, and the exclusion on line 20, which also goes on Form 706, Part V, item 12.

How to fill out Schedule U (Form 706)

  1. 1

    Line 1

    If the land is reported as items on a Form 706 schedule, the instructions say to list the schedule, line numbers and item numbers, and to describe the part subject to the easement if it is only part of an item.

  2. 2

    Lines 2 and 3

    Answer Yes or No on line 2. On line 3, the instructions say to give enough information for the IRS to value the easement, including the date it was granted and by whom.

  3. 3

    Lines 4 to 7

    Line 4 is the gross value of the land from the asset schedule, not reduced by any mortgage. Line 5 is the date of death value of earlier qualifying easements. Line 7 is the value of retained development rights.

  4. 4

    Lines 8 to 10

    Subtract line 7 from line 6, multiply by 30% on line 9, and enter the easement value on line 10. The instructions say to explain how that value was determined and attach copies of any appraisals.

  5. 5

    Lines 11 to 14

    If line 10 is equal to or more than line 9, the form says to skip lines 11 through 13 and enter 0.40 on line 14. Otherwise follow the rounding rule on line 12 and multiply by 2.0 on line 13.

  6. 6

    Lines 15 to 20

    Enter any section 2055(f) deduction and the acquisition indebtedness, subtract the total reductions from line 4, multiply by line 14, and enter the smaller of line 19 or the exclusion limitation on line 20.

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How it is filed and what to attach

Where it goes

The form says "Attach to Form 706." The Form 706 instructions give Department of the Treasury, Internal Revenue Service, Kansas City, MO 64999 as the filing address, and the About page points to Filing estate and gift tax returns for the latest address.

Timing

The instructions say the election is made on a timely filed Form 706, including extensions. They give a Form 706 due date of 9 months after the date of death, with Form 4768 for an automatic 6-month extension.

Irrevocable

The instructions say that once made, the election is irrevocable.

Worksheet

If the easement, land or development right values at the time of contribution differ from the estate tax values, the instructions call for a separate computation on a copy of Schedule U, with "worksheet attached" entered at the top.

Reporting the land

The instructions say to include the decedent's interest in the land on Schedule A, B, E, F, G or H of Form 706, as appropriate.

Related forms

Who completes Schedule U (Form 706)?

  • Executors claiming the exclusion

    The form says an executor who files Schedule U and excludes qualifying conservation easements from the gross estate is deemed to have made the section 2031(c)(6) election.

  • Estates with family-held land

    The instructions list a requirement that the decedent or a member of the decedent's family owned the land for the 3-year period ending on the date of death. Line 2 asks this question.

  • Land held through an entity

    The instructions say the exclusion applies to land owned indirectly through a partnership, corporation or trust if the decedent owned, directly or indirectly, at least 30% of the entity.

  • Persons in possession of the property

    If no executor is appointed, qualified and acting in the United States, the Form 706 instructions say every person in actual or constructive possession of the decedent's property is considered an executor.

  • Holders of interests in the land

    To avoid the line 7 reduction, the instructions describe an agreement under section 2031(c)(5) to extinguish retained development rights, signed by everyone with an interest in the land and filed with the return.

The executor of a decedent's estate completes Schedule U and attaches it to Form 706, which is filed with the IRS. The Form 706 instructions say the term executor includes the executor, personal representative or administrator of the estate.

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Questions about Form 706 Sch. U

Who completes Schedule U?

The executor of the estate completes it and attaches it to Form 706.

How is the election made?

The form says the executor is deemed to have made the election under section 2031(c)(6) by filing Schedule U and excluding qualifying conservation easements from the gross estate.

Is there a cap on the exclusion?

The instructions say the exclusion is the lesser of the applicable percentage of the value of the land (after certain reductions) or $500,000.

Can the election be revoked?

No. The instructions say that once made, the election is irrevocable.

When does an estate not qualify?

The form says that if line 11 is equal to or less than 0.100, the estate does not qualify for the conservation easement exclusion.

Where does the line 20 amount go?

The form says to also enter it on Form 706, Part V, item 12.