On November 30, 2015

Estate tax issues can be complicated. Understanding how they impact your estate can be pivotal to reducing your loved ones’ future estate tax obligations. And this can allow them to retain more of the estate you want to them to inherit.

Answers about Common Estate Tax Issues

Q: What assets are usually included in an estate for tax purposes?

A Denver estate planning attorney answers some common questions about estate tax liabilities and issues.

A Denver estate planning attorney answers some common questions about estate tax liabilities and issues.

A: According to the Internal Revenue Service (IRS), the “Gross Estate” can include probate and non-probate property, such as (but by no means limited to):

  • Cash
  • Real estate
  • Business interest
  • Personal property
  • Stocks and bonds
  • Insurance policies/proceeds.

In calculating the value of the estate, the IRS will use the fair market value of the assets that comprise the estate. This, in turn, will be used to assess the tax obligations for that estate.

Q: What assets are generally excluded from the estate?

A: The assets that are typically not part in the estate include (but may not be limited to):

  • Property solely owned by the surviving spouse
  • Lifetime gifts or estates which the decedent no longer controls (as of the date of death).

Q: Are there deductions available for estate taxes?

A: Yes, according to the IRS there are five possible deductions that can be used for estate taxes, with these being the:

  1. Charitable deduction, so long as the property was bestowed to a qualifying charity
  2. Marital deduction, which can be used for the property directly bestowed to a surviving spouse
  3. Deductions for debts, including mortgage debt
  4. Deductions for the costs of administering the estate
  5. Deductions for the losses incurred in the estate administration process.

Q: When are estate taxes due?

A: In general, estate taxes are due to the IRS nine (9) months following the date of death. Extensions can be obtained in some cases; however, the correct estimated estate tax due has to be paid on time in order to obtain an extension.

Q: What if I sold the property I inherited before paying the estate tax?

A: In most cases, this will not greatly impact the estate tax obligation, so long as the property was sold soon after the death, because the IRS will rely on the fair market value of that property to value the estate and assess the tax obligation. The fair market value is not usually going to change that much if the property is pretty quickly sold.

Contact a Denver Estate Planning Attorney at JR Phillips & Associates, PC

Do you have more questions about estate tax issues? Or do you need assistance settling an estate? If so, you can turn to the Denver estate planning attorney at JR Phillips & Associates, PC.

To discuss your options, schedule an initial consultation with one of our lawyers by calling us at (303) 741-2400 or by emailing us using the contact form at the top of this page.

From our offices in Denver, we serve clients throughout the southwest and southeast Metro Area, including (but not limited to) people in Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village and Englewood.

Categories: Estate Planning, Estate Taxes