Form 4768 - Extension of Time to File Estate Tax Return

When and How to File the Form 706 Extension

Real Estate
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Estates must file IRS Form 4768 to ask for an extension of time to file Form 706 -- the United States Estate (and Generation-Skipping Transfer) Tax Return. It can take some estates a little more time just to determine whether Form 706 is required. 

The Federal Estate Tax 

Estates valued at more than $5.45 million are liable for a c on the balance over this threshold as of 2016. This exemption is indexed for inflation so it increases periodically.

Estates ordinarily have nine months from the decedent's date of death to value his property, determine if any estate taxes are due, and file this return. 

The Form 4768 Extension 

Filing Form 4768 automatically gives the executor of an estate or the trustee of a living trust an additional six months to file Forms 706, 706-A, 706-D, 706-NA or 706-QDT, all estate tax returns applicable to certain situations. Form 4768 must be filed on or before the due date for Form 706. 

Additional Options 

The form offers some additional relief as well. Part II of Form 4768 allows executors or trustees to ask for more than an additional six months to file the estate tax return, but they must attach a statement explaining why additional time is necessary.

The executor or trustee can also ask for additional time to pay any estate tax that is due by completed Part III of the form. This also requires attaching a written statement of explanation.

If you simply don't know the value of the estate yet so calculating an estimated tax is impossible, you can check a box indicating this. Otherwise, the executor or trustee should include the anticipated tax payment when filing Form 4768. 

You can access and download the form from the IRS website.

Estates That Don't Owe Estate Taxes

The IRS recognizes a "portability election" that allows a surviving spouse to claim any leftover portion of the decedent's federal estate tax exemption to apply to her own estate when she dies.

For example, if the decedent died owning a taxable estate worth $300,000, his surviving spouse can claim the $2.54 million remaining to shield her own estate from taxation as of 2016. 

The surviving spouse must file Form 706 to claim this election. Filing Form 4768 immediately at the time of death gives her 15 months to decide whether she wants to do so. Some restrictions apply to the portability election and its terms can change yearly. The Form 706 extension can give a surviving spouse time to explore her options.  

NOTE: Tax laws can change frequently and the above information may not reflect the most recent changes. Please consult with an attorney for the most up-to-date advice if you're dealing with an estate that might owe estate taxes, or if you're considering making a portability election. The information contained in this article is not legal or tax advice and it is not a substitute for legal or tax advice.

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