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FEDERAL ESTATE TAX

The executor must file federal Form 706 for the estate of every U.S. citizen or resident whose gross estate, plus adjusted taxable gifts and specific exemption, is more than the applicable exclusion amount of the unified credit for the year of death.

Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013, $5,340,000 in 2014, $5,430,000 in 2015, $5,450,000 in 2016, $5,490,000 in 2017, $11,180,000 in 2018, $11,400,000 in 2019, and $11,580,000 in 2020.

Beginning January 1, 2011, estates of decedents survived by a spouse may elect to pass any of the decedent’s unused exemption to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse. Note that simplified valuation provisions apply for those estates without a filing requirement absent the portability election.


NEW YORK ESTATE TAX


New York State residents:
The estate of an individual who was a NYS resident at the time of death must file a NYS estate tax return if the total of the federal gross estate plus any includible taxable gifts made while the individual was a resident of New York State exceeds the New York State basic exclusion amount ($5,740,000) applicable for dates of death on or after January 1, 2019.


New York State nonresidents:
The estate of an individual who was not a resident of New York State at the time of death must file a NYS estate tax return if the estate includes real or tangible personal property having an actual location in NYS and the federal gross estate plus any includible taxable gifts of real or tangible personal property located in New York State and intangible personal property employed in a business, trade or profession carried on in New York State, made while the individual was a resident of NYS, exceeds the New York State basic exclusion amount ($5,740,000) applicable for dates of death on or after January 1, 2019.


FILING DEADLINES

Estates required to file estate tax returns must do so within nine months after the decedent's date of death, unless they receive an extension of time to file the return. An extension of time to file the estate tax return may not exceed six months, unless the executor is out of the country.

The NYS Tax Department may grant an extension of time to pay the NYS estate tax for up to four years from the date of death, if it is established that payment of any part of the tax within nine months from the date of death would result in undue hardship to the estate. Annual installments may be required (NYS Tax Law section 976(a)).


ESTATE INCOME TAX

An estate may have an income tax filing requirement for each year that it has $600 or more of gross income or has a beneficiary who is a nonresident alien, from the date of death until the final distribution of the assets to the beneficiaries. The tax is figured on the estate's income in a manner similar to that for individuals.

Every estate with an income tax filing requirement must file both Federal and NYS tax returns.

Schedule K-1 Schedule K-1 (Form 1041), Beneficiary's Share of Income, Deductions, Credits, etc. reports a beneficiary's distributive share of income, deductions, and credits from the estate.

 

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This website constitutes "Attorney Advertising." The information provided on this page, or at this website, is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your personal situation. The information provided herein should not be interpreted as establishing an attorney-client relationship.

 

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