We recently wrote an article about estate taxes, which mentioned that we would have to wait and see what changes to the law would be enacted. The wait is now over, because last week the Internal Revenue Service published on IRS.gov the Update for Executors Filing 2010 Form 706 or Form 706-NA, which includes information about the associated automatic six-month extension of time to file the return.
The changes to the regulations associated with Form 706 include an increase of the unified credit to $5,000,000 for decedents dying after December 31, 2009 and before January 1, 2013. The top bracket tax rate for 2010 will be 35 percent, which is a decrease of 20% from a decade ago.
As always, to ensure you know all you need to know before filing your tax returns, you should be very familiar with all of the most-recent rules and regulations established by the Treasury Department and the IRS. As always, that is a lot of information and legalese to digest for someone who is not trained in tax law and finances. Here is an example of the language you will encounter in the IRS website about changes to Estate tax form:
For Estate Tax returns after 12/31/1976, Line 4 of Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, lists the cumulative amount of adjusted taxable gifts within the meaning of IRC section 2503. The computation of gift tax payable (Line 7 of Form 706) uses the IRC section 2001(c) rate schedule in effect as of the date of the decedent’s death, rather than the actual amount of gift taxes paid with respect to the gifts.
If you find this official information intimidating, you are not alone, because millions of other Americans do too. Fortunately, many legal and financial professionals are available to help you understand what you need to do to stay on the right side of Uncle Sam. If you are an executor of an estate and feel you need assistance with properly filing your taxes and understanding the finances related to that, the Law Offices of Connie Yi, P.C. can help you with both the legal and financial aspects of your tax liability and other responsibilities.
The Law Offices of Connie Yi, P.C., with several offices in the San Francisco Bay Area, uniquely specializes in Estate Planning, Wills and Trusts, because our founder Connie Yi is an experience Certified Public Accountant and a California Tax Attorney, as well as a licensed Real Estate Broker. She is able to provide legal services and advice from a broad and experienced perspective that includes a deep understanding of the relationship between the tax laws and your financial and real estate assets, which will best serve your estate planning and probate tax law needs.
For more information, please contact us.