Estate Tax Filing Consultation

Questions we help answer

• Does the estate have to file a federal estate tax return, and should it file even if it does not have to?
• What is the exemption for the year of death, and how do lifetime gifts reduce it?
• Which assets count: life insurance, retirement accounts, jointly owned property, trust assets?
• What deductions are available for debts, expenses, a surviving spouse and charities?
• Which deadlines apply, and when does an extension help?
• What is the heirs’ basis in inherited property, and what does that mean when they sell?
• Which income tax returns must the estate or trust file while it is open?

How the federal estate tax works

The federal estate tax applies to the total value of what a person owns or controls at death, with certain gifts made during life added back. Each person has an exemption set by Congress and adjusted for inflation, and only the value above it is taxed. Property left to a surviving spouse who is a U.S. citizen, or to charity, is generally deducted. We confirm the figures that apply to the year of death rather than relying on rules of thumb.

Income tax returns along the way

The estate tax return is only one filing. The person who died may need final income tax returns (federal Form 1040 and California Form 540), and an estate or trust that earns income while it is being settled files its own returns (federal Form 1041 and California Form 541). We plan these together so nothing is missed.

Working with your attorney

Many estates also have an attorney handling the will, the trust or the probate case. We work alongside them on the numbers and the tax filings, so the legal and tax sides line up.