When to File a Federal Estate Tax Return on a Decedent's Estate

February 20, 2014. It is unusual that a decedent’s estate will have to file a federal estate tax return. Only in certain circumstances is it necessary to make such a filing, with those circumstances being that the deceased’s estate exceeds their lifetime exemption of $5,340,000. When an estate does surpass this figure, this filing needs to be made and is otherwise known as a Form 706. Up until recently, there was rarely another reason for a practitioner to consider filing the 706. However, the enactment of portability in the Code, and the right to share the exemption between a deceased spouse and the surviving has changed that. To make use of portability, or more properly a Deceased Spouse’s Unused Exemption (DSUE), the decedent’s estate now needs to make the election on a properly submitted 706, even if the estate is not in excess of the exemption. To be effective, the form needs to be timely filed by the executor within 9 months of death, though a 6 month extension may and will be granted. If the filing is not timely, the exemption will not be carried over, which would be needlessly unfortunate.

For more information about a federal estate tax return or estate planning, contact the Goosmann Trust Law Counsel at info@goosmannlaw.com or call 712-226-4000.