ESTATES

THE FEDERAL ESTATE TAX SYSTEM

At the time of death, a federal estate tax is imposed on property transferred by a decedent. This tax is imposed on the transfer of wealth (net value of the assets owned by the decedent).



Property transferred at death includes generally the property which the decedent will directly own at the time of death. This might include, for example, the family residence, stocks, bonds, and bank certificates of deposit which are in his/her name. Also included are items of personal property such as household furnishings and jewelry. However, property that is not owned directly at the time of death may also be subject to tax for federal estate tax purposes.



The estate tax is imposed on a net estate basis. Thus, after identifying the value of all assets includible in the gross estate, certain deductions (such as funeral expenses, administration expenses, claims, and other debts and mortgages) are available to offset that gross amount.

THE ESTATE TAX RETURN

The preparation of an Estate Tax return demands attention to detail, not only because of all the different forms that must be filed and supporting documents that must be attached; but also, because experienced IRS agents (many times IRS attorneys) review most, if not all, federal Estate Tax returns submitted on behalf of the deceased.

We can work with your estate tax attorney to determine if you should have an Estate Tax return prepared.

ESTATE INCOME TAX PREPARATION

An Estate Income tax may be required if the assets of an estate earn taxable income before the assets are distributed to the beneficiaries.



The Estate Income tax return is not to be confused with an Estate Tax return. Estate taxes are not income taxes ... they are an excise tax based on the current value of the decedent's assets.



We prepare the federal and state (all states) income taxes of the estates of our clients.