Estate Tax ? What It Is And How It Is Filed | Finance information

According to the Internal Revenue Service (IRS) to Estate Tax is a tax that is imposed on your right to transfer your property and belongings after your death. The individual who is in charge of handing and filing of estate tax return is often the estate representative. An estate representative can be an attorney or a family member family who was declared the executor in a will of a state. When dealing with an Estate Tax there are number of things to that individual or family must do when preparing to deal with the Internal Revenue Service (IRS).

There are Certain restrictions for estates that are subject to the Estate Tax. Each year tax laws are updated or completely changed, therefore, estate representatives or family members are encouraged to review the new Estate Tax laws. At the current time the Majority of estates are not subject to estate tax if they are to valued at less than fifty thousand one million dollars. The value is expected to increase up to two million dollars for the 2006 year. In addition to meeting A Certain estate value, it is therefore likely that the Majority of properties that are jointly owned will not be taxed if at least one property owner is still living. An Estate Tax return is due to be submitted to the Internal Revenue Service (IRS) nine months after the estate owner passed away. As with regular tax returns it is possible for estate representatives or family members to obtain a deadline extension. If tax is owed on the estate, it still needs to be paid before the nine months even if arrives to return deadline was granted. Not paying the estimated result of estate taxes due can amount in late fees or penalties additional. The Internal Revenue Service (IRS) intends to mine the deterministic amount of tax owed by taking the fair market value of all property items that were previously owned by the estate owner before he or she passed away. Fair market value takes into account when an item was purchased and exactly how much it is worth today. When all of these items are added up the total is referred by to as the Gross Estate. As with traditional estate taxes tax returns are allowed tax credits and tax deductions. When all of these items are computed together the amount of tax owed will be determined. When

an Estate Tax return is being filed with the Internal Revenue Service (IRS), there are a number of other important documents that must be sent alongwith the return. These items include a copy of a death certificate, copies of property appraisals, copies of litigation documents that may apply to the estate property, and a copy of the deceased?s wishes. As previously mentioned the return can be filed by a lawyer, an estate representative, or a family member. Individuals can acquire the Form 706: United States Estate (and Generation ? Skipping Transfer) Tax Return by contacting the Internal Revenue Service (IRS) or by downloading the form online

Only a small percentage of Americans are required. return to file for an estate tax, however, that does not mean that taxpayers Thurs not need to known and understand what it is. A taxpayer may not own a high-valued property,. However, that does not mean that they can not inherit or be named on one estate representative by a friend or family member who has passed on

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