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Estate Taxes and the IRS
Larry Denton
Estate taxes may apply to your taxable estate upon your death. Your taxable estate is your gross estate less allowable deductions.
By IRS definition, your gross estate includes the value of all property in which you had an interest at the time of death. Your gross estate also will include the following: life insurance proceeds payable to your estate or, if you owned the policy, to your heirs; the value of certain annuities payable to your estate or your heirs; and the value of certain property you transferred within 3 years before your death.
The allowable deductions used in determining your taxable estate include: Funeral expenses paid out of your estate; debts you owed at the time of death, and the marital deduction (generally, the value of the property that passes from your estate to your surviving spouse).
For additional information on what is included in your gross estate and the allowable deductions, please refer to IRS Form 706 and its instructions.
Filing an Estate Tax Return
An estate tax return, Form 706, must be filed if the gross estate, plus any adjusted taxable gifts and specific gift tax exemption, is more than the filing requirement for the year of death.
Filing requirement. The following table lists the filing requirement for the estate of a decedent dying after 2003.
Year of Death: Filing
Requirement:
2004 and 2005 1,500,000
2006, 2007, and 2008 2,000,000
2009 3,500,000
If you think you will have an estate on which tax must be paid, or if your estate will have to file an estate tax return even if no tax will be due, see Form 706 and its instructions for more information. You (or your estate) may want to get a qualified estate tax professional to help with estate tax questions.
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