Estate and Gift Taxes

The Estate Tax is a tax imposed by the Internl Revenue Service on your right to tranfer property upon your death.  More affectionately called the ‘Death Tax’ by opponents of the high taxes, the Estate Tax is considered one of the most complicated pieces of the IRS code. 

 

The Estate Tax is a tax imposed by the Internl Revenue Service on your right to tranfer property upon your death.  More affectionately called the ‘Death Tax’ by opponents of the high taxes, the Estate Tax is considered one of the most complicated pieces of the IRS code. 

 

Calculating the Estate Tax is not a brief process but rather can take anywhere from four months to as long as several years considering the advanced work prior to the owner’s death.  Included in the calculation are any items owned by the deceased. Their value is based on fair market value and not the price paid or value deemed at the time of acquisition.  The total of all these items is called the Gross Estate Value.

 

Items included:

  • Cash and securities
  • Real estate
  • Insurance
  • Trusts
  • Annuities
  • Business interests
  • Other assets

 

According to the IRS, most estates engage the services of both attorneys and CPAs or Enrolled Agents (EA). The attorney usually handles probate matters and reviews the impact of documents on the estate tax return. The CPA or EA often handles the actual return preparation and some representation of the estate in matters with the IRS. CPAs and EAs may also handle most of the work, but cannot take care of probate matters and other situations where a law license is required. In addition, other professionals (such as appraisers, surveyors, financial advisors and others) may need to be engaged during this time.

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