If you are an executor of real estate for a relative, friend or anyone else, you’ll have to pay taxes for his/her property after their death. The US government imposes an especially high tax on large estates, so it’s important that this is done correctly and promptly. IRS Form 706 is specially designed to calculate and file this tax.
What is Form 706?
IRS Form 706 is called the United States Estate (and Generation-Skipping Transfer) Tax Return. This is a detailed document with multiple sections, so you want to be especially attentive when completing it. The best way to ensure you fill out the form properly, is by filing it electronically. By using PDFfiller, you’ll avoid mistakes that are commonly made by those who complete the form on a physical document. You can easily correct mistakes with no need to cross out words, numbers or letters. This way, the form will always look professional and neat.
Who must file Form 706?
If you’re the executor of an estate, whose owner passed away in 2017, you are required to complete and file IRS Form 706. You must file the return if the gross estate, including specific exemptions and adjusted taxable gifts, exceeds $5,490,000. If you decide to transfer the amount of the deceased’s unused exemption to a surviving spouse, regardless of the size of the estate, you are still required to submit this return.
How do I complete Form 706?
First of all, when completing Form 706, you have to provide the following information: The decedent’s name, social security number, address, the year when the domicile was established, birth/death date, name of executor and their social security number. Then, fill in the Tax Computation section indicating gross taxable estate, all deductions, adjusted taxable gifts, all credits, total transfer taxes, etc. After that, you have to sign and date this section.
The next section is called the Elections by Executor. Here you have to answer questions mainly related to how you’re going to pay the estate taxes. Then, be ready to provide some general information and attach the certificate of death. When you attach the certificate, you should provide basic information such as: the number and authority that issued it, the decedent’s occupation or business, marital status, surviving spouse’s name (if any) and social security number. Also, provide the names of individuals who received benefits from the decedent’s estate.
The form includes a lot of questions that all must be answered accurately. If you’re not sure if you can correctly provide all answers, contact an attorney and fill out the form with his/her help.
