Basis Estate Tax Information and IRS Estate Tax Forms

Estate Tax – The estate tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death.

 

What is Form 706?

Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return – The executor of a decedent’s estate uses Form 706 to figure the estate tax imposed by Chapter 11 of the Internal Revenue Code. Form 706 is also used to compute the generationskipping transfer (GST) tax imposed by Chapter 13 on direct skips.

Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return – This form is used to report (1) transfers subject to the federal gift and certain generationskipping transfer (GST) taxes and to figure the tax due, if any, on those transfers, and (2) allocation of the lifetime GST exemption to property transferred during the transferor’s lifetime.

 

What is the Gift Tax?

Gift Tax – The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.

 

Portability of Deceased Spousal Unused Exclusion (DSUE)

Portability of Deceased Spousal Unused Exclusion (DSUE) – Section 303 of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 authorized estates of decedents dying on or after January 1, 2011, to elect to transfer any unused exclusion to the surviving spouse. The amount received by the surviving spouse is called the deceased spousal unused exclusion, or DSUE, amount. If the executor of the decedent’s estate elects transfer, or portability, of the DSUE amount, the surviving spouse can apply the DSUE amount received from the estate of his or her last deceased spouse against any tax liability arising from subsequent lifetime gifts and transfers at death.

 

What is Schedule PC?

Schedule PC, Protective Claim for Refund – A protective claim for refund preserves the estate’s right to a refund of tax paid on any amount included in the gross estate which would be deductible under section 2053 but has not been paid or otherwise will not meet the requirements of section 2053 until after the limitations period for filing the claim has passed.