When an individual dies, he or she leaves behind and estate. The estate may be valuable and full of complex assets or modest and include only simple assets; however, almost everyone leaves behind some type of estate assets. It should come as no surprise that the assets owned by an estate are potentially taxed in the United States, both at the state and federal level. If you are the Executor or Personal Representative of an estate you may be wondering “When is an estate tax return due?”
Following the death of the decedent most estates are required to pass through the legal process known as “probate.” One of the primary purposes of the probate process is to ensure that all assets owned by the decedent at the time of death are identified and valued for the purpose of paying any taxes due on the estate. Estate taxes are not the same as any personal taxes due. Generally, a final tax return will also be due for the decedent; however, that tax return has nothing to do with the state or federal estate tax return that may also be due.
A federal estate tax return is almost always required to be filed and is usually due nine months after the death of the decedent. A six month extension is available if requested prior to the due date. If you request an extension you will also need to pay the estimated tax due on the estate at the time the extension is filed. Each taxpayer is entitled to a lifetime exemption from federal gift and estate taxes of $5 million, adjusted annually for inflation. For 2015, the lifetime exemption amount is $5.43 million. The value of the estate assets is added to the value of any lifetime gifts made by the decedent to determine if the combined total exceeds the lifetime exemption amount. If it does the estate will owe federal gift and estate taxes. If not, a tax return may still need to be filed but the estate will owe nothing in taxes.
The State of Illinois also has an estate tax; however, estate taxes are only levied on estates in Illinois with an estimated gross value that exceeds $4 million. The estate may not actually owe taxes because of deductions but an estate tax return must be filed if the estate is valued at more than $4 million. Like federal estate tax returns, an Illinois estate tax return is also due nine months after the death of the decedent.
If you have additional questions or concerns about estate taxes, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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