Estate Tax Filing

What we handle

• Deciding whether the estate must file, and whether it should file anyway
• Date-of-death values for real estate, bank and brokerage accounts, retirement accounts, business interests and other property
• Working with appraisers on real estate and business interests
• Lifetime gifts that count toward the estate, and the gift tax returns (Form 709) behind them
• Deductions for debts, funeral and administration expenses, and bequests to a spouse or to charity
• The portability election, which passes a deceased spouse’s unused exemption to the surviving spouse
• Form 8971 statements, which report the value of what each beneficiary received to the IRS and to the beneficiary
• Questions and letters from the IRS after the return is filed

Deadlines

The federal estate tax return is due nine months after the date of death. An automatic six-month extension of time to file is available (Form 4768), but any tax owed is still due at nine months. Starting early leaves time for appraisals and for choices such as the alternate valuation date, which values the estate six months after death when that lowers both the value of the estate and the tax.

When no tax is due

Most estates owe no federal estate tax, because the exemption is high. Filing can still be worth it. For a married couple, a timely return is how the surviving spouse keeps the unused part of the first spouse’s exemption. A complete return also documents what each asset was worth at death, which sets the starting value (basis) the heirs use when they later sell.

California estates

California does not currently have its own estate tax or inheritance tax, so for most California residents the estate tax question is a federal one. Property in another state can bring that state’s rules into play, and we look at that as well.

What to bring

• The death certificate, and the will or trust
• Statements as of the date of death for bank, brokerage and retirement accounts
• Deeds, property tax bills and any appraisals
• Life insurance policies and beneficiary information
• Records of large gifts the person made, and any gift tax returns they filed
• Bills, debts and expenses the estate has paid