When Is an Estate Tax Return Due? | Sacramento Estate Planning Attorney

Accumulating wealth is one thing, but preserving it is another. Though you pay taxes throughout your life, there is also a federal estate tax that can impact the future of your family if you have enjoyed a considerable level of financial success.

You should put together a statement of net worth when you are planning your estate to determine whether or not you are exposed to the estate tax. When you are doing so, you must include your real property and the value of life insurance policies that are in your possession.

When you come up with a figure, you compare the value of your estate to the amount of the federal estate tax credit or exclusion. For the rest of 2015, the exact amount of this exclusion is $5.43 million. If the value of your estate exceeds this amount, you are faced with exposure.

We should point out the fact that you can transfer unlimited assets to your spouse free of the estate tax, but it is potentially applicable on transfers to others. The maximum rate of the tax is 40 percent, so it is a very significant factor.

In addition to the federal estate tax, there are also some states in the union that have state-level estate taxes. We practice law in the state of California, and there is no California state estate tax. However, if you own valuable property in a state that does have an estate tax, that state’s tax could come into play for you.

Federal Estate Tax Return

When an estate is subject to the federal estate tax, Internal Revenue Service Form 706 must be filed within nine months of the decedent’s passing. If more time is needed, the IRS can be petitioned to grant a six-month extension.

The estate tax exclusion is portable between spouses. This means that a surviving spouse could use the exclusion that was allotted to his or her deceased spouse. To opt for portability, Internal Revenue Service form 706 must be filed, and the same nine-month time frame is in place. You have to file this form to opt for portability even if there are no taxes due at the time of filing.

Free Report on Federal Estate Tax

You should certainly educate yourself about the potential impact of the federal estate tax if you have been able to accumulate a considerable store of wealth. We have prepared an in-depth report on the subject, and you can access this report through our website.

To get your copy of the special report, which is being offered free of charge at the present time, visit this page and follow the simple instructions: Federal Estate Tax Report.

Schedule a Consultation

If you would like to take things a step further, send us a message through our contact page to request a consultation: Sacramento CA Estate Planning Attorneys.

To learn more, please download our free Estate Tax in California here.

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Timothy P. Murphy

Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes.