Thanks to the Tax Cuts and Jobs Act, Americans now have a federal estate tax exemption of $11.18 million. That number doubles for married couples who are combining their federal estate tax exemption. The value of an estate is the total of all assets held wherever they are located. It also includes interests in property as well as property that a person may not directly own but has some form of control over.
In some cases, a gross estate may include the value of life insurance policies even if someone other than the estate is the beneficiary. If an individual’s estate is worth more than the exemption, it may be necessary to pay taxes. Taxes owed must be paid no later than nine months after an individual passes away. The government does allow an estate to ask for an extension to file a federal estate income tax return. However, this extension does not provide an estate with extra time to pay a balance.
In addition to citizens and residents of the United States, nonresidents of the United States may need to account for property held here. It may also be necessary to account for gifts and other financial holdings if they total more than $60,000. That would be done by filing form 706-NA.
Calculating the value of an estate’s assets is an important part of the estate administration process. This can be done by having an appraiser create a value or by looking at how much similar items have sold for recently. An attorney may help an executor or trustee with these and other similar tasks.