706 Sch. L

Net Losses During Administration and Expenses Incurred in Administering Property Not Subject to Claims

Agency
IRS
Revision
August 2025
Fillable fields
137
Pages
2
Official source
IRS form page
Checked
October 21, 2026
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Page 1 of form 706 Sch. L

Schedule L (Form 706): Net Losses During Administration and Expenses Not Subject to Claims

Schedule L (Form 706) reports two kinds of estate tax deductions: net losses during administration, and expenses incurred in administering property not subject to claims. The IRS About Form 706 page says it is used when deductions are claimed for net losses and property expenses during administration that are not subject to claims. It is attached to Form 706, the estate tax return the executor of a decedent's estate uses to figure the estate tax.

The Instructions for Form 706 say to complete Schedule L and file it with the return if the estate claims deductions on Form 706, Part V, item 19 or item 20. Part I totals the losses for item 19 and Part II totals the expenses for item 20.

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What's on Schedule L (Form 706)

Decedent information

The decedent's name as it appears on Form 706 and the decedent's Social Security number, followed by notes on Schedule PC and Schedule W.

Part I, line 1: net losses

A table with item number, a description of each net loss during administration, and the amount. The column heading says not to deduct losses claimed on a federal income tax return.

Lines 2 to 4: loss totals

The total of column (iii), the total from attached Schedule W or statements, and their sum, which goes to Form 706, Part V, item 19.

Part II, line 5: expenses

A table for expenses incurred in administering property not subject to claims, with a note to indicate whether each is estimated, agreed upon or paid.

Lines 6 to 8: expense totals

The total of column (iii), the total from attached Schedule W or statements, and their sum, which goes to Form 706, Part V, item 20.

How to fill out Schedule L (Form 706)

  1. 1

    Describe each loss

    The instructions say to describe in detail the loss and its cause, state any insurance or other compensation collected, and identify the property by the schedule, line and item number where it is in the gross estate.

  2. 2

    Leave out certain losses

    The instructions say not to deduct losses claimed on a federal income tax return, depreciation in the value of securities or other property, or, under alternate valuation, the amount an item's value was already reduced.

  3. 3

    List each expense

    The instructions say to list the names and addresses of the persons each expense was payable to, the nature of the expense, and the schedule, line and item number of the related property.

  4. 4

    Estimated expenses

    The instructions say an estimate may be deducted if it can be verified with reasonable certainty and will be paid before the section 6501 period of limitations for assessment expires.

  5. 5

    Protective claims

    For an expense not currently deductible, the schedule says to use Schedule PC (Form 706) and report the expense on Schedule L without a value in the last column.

  6. 6

    Add and carry totals

    Add column (iii) on lines 2 and 6, add any Schedule W totals on lines 3 and 7, then carry line 4 to Form 706, Part V, item 19 and line 8 to item 20.

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Where it goes and timing

Attach to Form 706

The schedule says "Attach to Form 706." Line 4 is entered on Form 706, Part V, item 19 and line 8 on item 20.

Form 706 due date

The Form 706 instructions say Form 706 is filed within 9 months after the date of the decedent's death, and Form 4768 is used to apply for an automatic 6-month extension of time to file.

Where Form 706 is filed

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

More space

The schedule says to attach Schedule(s) W (Form 706) or additional statements if more space is needed, and to enter their totals on lines 3 and 7.

Keep receipts

The instructions say to keep all vouchers and receipts for inspection by the IRS.

Related forms

Who completes Schedule L (Form 706)?

  • Executors of an estate

    The About Form 706 page says the executor of a decedent's estate uses Form 706. The instructions say executor includes the executor, personal representative or administrator.

  • Estates claiming items 19 or 20

    The instructions say to complete Schedule L and file it with the return if deductions are claimed on Form 706, Part V, item 19 or item 20.

  • Estates with casualty losses

    Part I covers losses from thefts, fires, storms, shipwrecks or other casualties that occurred during the settlement of the estate, for amounts not reimbursed by insurance or otherwise.

  • Estates with trust property

    The instructions say Part II expenses are usually incurred in the administration of a trust the decedent set up before death, or in clearing title to property outside the probate estate.

  • Not for property subject to claims

    The instructions say expenses of administering property subject to claims go on Schedule J (Form 706), not Schedule L.

The schedule is completed for a decedent's estate as part of Form 706 and goes to the IRS with that return. It is not an individual income tax form.

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Questions about Form 706 Sch. L

What is Schedule L (Form 706) for?

The About Form 706 page says it is used to report deductions for net losses and property expenses during administration that are not subject to claims.

Which losses go in Part I?

The schedule says only losses from thefts, fires, storms, shipwrecks or other casualties that occurred during the settlement of the estate, and only amounts not reimbursed by insurance or otherwise.

What expenses go in Part II?

The instructions say they are usually expenses of administering a trust the decedent set up before death, and may include collecting other assets or clearing title to property not in the probate estate.

Is there a time limit for paying Part II expenses?

The schedule says to deduct these expenses only if they were paid before the section 6501 period of limitations for assessment expired.

How is Schedule L different from Schedule J?

The instructions say Schedule J (Form 706) lists expenses of administering property subject to claims, and expenses for property not subject to claims go on Schedule L.

Where do the totals go?

Line 4 goes to Form 706, Part V, item 19, and line 8 goes to Form 706, Part V, item 20.