Library with lights

What Are the IRS 706 Requirements for Estate Tax Returns?

Author Lee Cosi

Posted Feb 24, 2023

Reads 2.3K

Are you an estate executor or administrator looking to uncover the IRS 706 requirements for estate tax returns? The IRS Form 706 is the official form that must be filed when an individual dies and their estate must pay federal taxes. Knowing the IRS 706 requirements is essential for any executor or administrator of an estate and this article will provide you with all the information you need.

The IRS Form 706 is a complex document with many different filing requirements. Understanding these requirements can be overwhelming, and even small mistakes can result in big fines or other penalties. To ensure that your filing of the Form 706 is accurate, it's important to understand all of the IRS 706 requirements.

By reading this article, you'll have all the information necessary to properly file a Form 706 and keep your estate in compliance with federal regulations. You'll discover what information must be included on the form, who needs to sign it, and how to submit it correctly. So keep reading if you want to learn more about uncovering IRS 706 requirements for estate tax returns!

Uncovering IRS 706 Requirements with Form 706

Form 706 is an Internal Revenue Service (IRS) form that individuals must use to report estate taxes when their estate exceeds the federal tax exemption. It’s important for estate owners to understand the IRS 706 requirements so they can properly assess and determine what portion of their estate will be taxable when it passes on to beneficiaries.

YouTube video about Uncovering IRS 706 Requirements with Form 706

The Form 706 requires individuals to report any generation-skipping transfer (GST) taxes, which are taxes imposed in addition to regular estate taxes when a beneficiary directly skips a generation in the inheritance process. Estate owners must also include any additional property or assets that have been added since the initial filing of their federal tax return, as well as any benefits received from life insurance policies.

Finally, Form 706 allows individuals to calculate whether their estate is subject to federal estate tax or if it is more likely that the beneficiary inherits a taxable portion of the estate. It also serves as documentation for the Internal Revenue Service (IRS), ensuring that proper estate taxes are paid before any assets or property are distributed among beneficiaries.

What Is Form 706: United States Estate (and Generation-Skipping Transfer) Tax Return?

Interior of contemporary open plan kitchen with white cabinets and cozy sofa with cushions in sunlight

Form 706: United States Estate (and Generation-Skipping Transfer) Tax Return is an Internal Revenue Service (IRS) form that must be completed by executors of the decedent's estate when an estate tax is owed. The form, which is located in Chapter 11 of the Internal Revenue Code (IRC), requires that information regarding the entire taxable estate be reported, as well as any generation-skipping transfer tax (GSTT) imposed on specific beneficiaries who receive assets from the executor. Completing and filing Form 706 with the IRS is a requirement for many estates according to Chapter 13 of the IRC.

Key Takeaways

The Form 706 is an IRS document that must be filed when a decedent's estate is valued over the federal threshold of $11.58 million in 2020 and $11.7 million in 2022. Executors must calculate the estate tax owed, as well as any generation-skipping transfer tax (GSTT) imposed under Chapter 13 of the Internal Revenue Code (IRC). The form is used to determine the gross estate, adjusted taxable gifts, and trust distributions subject to taxation. Form 706 also helps executors determine the value of their estate prior to death; it’s important because the IRS treats inherited property differently than property purchased during life. Step-up basis, or a cleaner valuation process, allows estates to minimize capital gains taxes by using stepped-up valuation methodology instead of cost basis or fair market value calculation. This makes it easier for executors to handle administrative tasks when closing out an estate.

Unveiling the Mystery: Uncovering Form 706's Role in Estates

Form 706 is an important document for understanding and filing for a deceased person's estate. It helps to uncover the mystery of how much gross estate, adjusted taxable gifts, and tax exemption surpasses are due based on the filing limit. This document contains all the necessary information needed to correctly complete the taxes related to the estate.

Unlock the Benefits of an Estate Plan

Creating an estate plan is essential in order to make sure that the decedent’s wishes will be followed after they have passed away. To ensure that the estate taxes are handled correctly and according to IRS 706 requirements, a Form 706 must be completed and filed with the IRS.

Crop estate agent working with computer in office

Form 706 requires that the entire taxable estate is reported and any taxes due on the estate must be paid. A beneficiary form 706 must also be filed if a generation-skipping transfer tax is applicable. In August 2013, the IRS released a revised version of Form 706 for decedents dying on or after December 31 2012. This revision included changes to the law regarding some of the favorite strategies used to minimize or eliminate estate taxes.

Navigating the Challenges of Estate Tax

Estate tax is one of the biggest challenges facing executors and beneficiaries when an individual passes away. In order to properly navigate the estate tax, executors must understand the IRS 706 requirements.

Modern Building Against Sky

Under the IRS 706 regulations, executors must determine any tax attributable to the decedent's property. The estate tax liability is first calculated by looking at the decedent's gross estate which includes all property in their possession, including those held in trust. Executors then can look to properly elect certain options such as a marital deduction or charitable remainder interest that may reduce the entire estate tax owed.

Finally, executor’s are responsible for filing a complete and accurate 706 form with the Internal Revenue Service along with proof of identity such as social security number or federal employer identification number (FEIN). If any estate taxes remain unpaid after filing, they may be subject to a late-filing penalty and/or a file penalty. With proper knowledge of IRS 706 regulations and working closely with qualified professionals, executors can navigate the challenges of estate tax efficiently.

Unlocking the Secrets of Filing Form 706

For those who have come across Form 706, the relevant PDF version can be found online and contains all the sections pertaining to filing the form. Although it may appear intimidating at first, there are only four main parts of the form that must be completed.

Tax Documents on the Table

The first part is simply a list of elections made by certain taxpayers regarding their estates. The second part requires information about due date and estate tax payment for Form 4768 application extension. The third part requires payments for generation-skipping transfer taxes and the fourth part requires an estate tax check payable to United States Treasury which should include the taxpayer’s name, address, and identification number.

Form 706 is designed to facilitate payment processing, so it is advised that taxpayers make payment electronically via the Electronic Federal Tax Payment System (EFTPS). This system links directly from Form 706 to help taxpayers make their payments as quickly and easily as possible.

Discovering the Best Place to Mail Form 706

Are you trying to figure out where to mail your IRS Form 706? The US Treasury and Internal Revenue Service (IRS) have designated Kansas City, MO 64999 as the place to mail this important document. Additionally, if you are using a private delivery service (PDS), you must send it to the Internal Revenue Submission Processing Center at 333 Pershing Road, Kansas City, MO 64108.

Crop businessman giving contract to woman to sign

Knowing the correct address is essential in order to submit your IRS Form 706 on time and without any errors. It's also important to note that all documents sent via PDS must include special tracking information in order for them to be accepted. Without the correct information, forms can be delayed or even lost in transit and may not reach their destination.

When sending your IRS Form 706, it's best to use certified mail or a PDS so that you have proof of when it was sent and received. Be sure to double-check all of your information and review the requirements for submitting this form before sending it off! By doing so, you can rest assured knowing that your form was received quickly and correctly by the IRS.

Frequently Asked Questions

What is Form 706 due for estate taxes?

Form 706 is the federal tax form that must be filed with the IRS by executors of an estate to report and pay any federal estate taxes due. It is generally due nine months after a person passes away. For more information, visit the official IRS website.

Who must file an IRS Form 706?

If you are the executor of an estate in the US with a gross estate worth more than $5.49 million, you must file IRS Form 706. Read on to learn more about filing requirements and other important details.

Who must file 706?

All U.S. citizens, who have an estate worth more than the federal estate tax exemption amount, must file a Form 706 with the IRS within nine months of their date of death. Learn more about filing your Form 706 here.

Do I need to file an estate tax return 706?

Yes, an estate tax return (Form 706) must be filed if the gross estate of the decedent is more than the exempt amount set by the IRS. To learn more about how to file Form 706 and determine if you need to file this form, please visit the IRS website.

When must you file estate Form 706?

The deadline for filing Form 706, the U.S. Estate Tax Return, is nine months after the date of death of the deceased taxpayer. To learn more about the estate tax return and other filing requirements, please consult with a tax professional or visit the IRS website.

Featured Images:

Profile photo of Lee Cosi

Lee Cosi

Writer at CGAA

View His Articles

Lee Cosi is an experienced article author and content writer. He has been writing for various outlets for over 5 years, with a focus on lifestyle topics such as health, fitness, travel, and finance. His work has been featured in publications such as Men's Health Magazine, Forbes Magazine, and The Huffington Post.

Lee also enjoys freelancing as well as working on his own blog where he shares tips and advice related to his specialties. He has a passion for helping others reach their goals through his writing. In addition to his writing career, Lee is a devoted family man who loves spending time with his wife and two children.

He likes to stay active by playing basketball or going for bike rides with the family. Lee believes in creating balance between work, family life, and self-care.

View His Articles

You Might Also Like

Subscribe to our Newsletter!

(1-2 engaging newsletters per month)