decedent's final return:

Question 1

Medical expenses for a decedent paid after death:

Answer 1

Medical expenses that were not paid before death are liabilities of the estate and appear on the federal estate tax return (Form 706). If the estate pays medical expenses for the decedent during the one-year period beginning with the day after death, the executor may elect to treat all or part of the expenses as paid by the decedent at the time the decedent incurred them. An executor making this election may claim all or part of the expenses on the decedent’s income tax return as an itemized deduction, rather than on the federal estate tax return (Form 706).

Question 2

What is the alternate valuation date for an estate?

Answer 2

The value of the estate six months after the decedent’s death is substituted for the value at the date of death.

Question 3

Excludable Part of Each Annual Installment of a beneficiary.

Answer 3

Excludable part per installment = Face amount / Number of installments
Excludable part per installment = $200,000 / 20 = $10,000

Question 4

what is the amount that is taxable to a beneficiary as interest?

Answer 4

Taxable interest per installment = Annual installment - Excludable part
Taxable interest per installment = $12,000 - $10,000 = $2,000

Question 5

Gregory is the executor of his deceased wife’s estate. In order to elect portability of Melinda’s unused exclusion amount, what is Gregory required to do?

Answer 5

To elect portability of Melinda’s unused exclusion amount, Gregory is required to file Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. By filing Form 706, Gregory notifies the IRS of his intention to elect portability, allowing him to potentially use Melinda’s unused estate tax exclusion amount for his own estate planning purposes. This election can have significant implications for future estate tax liability.

Question 6

the gross estate to determine the taxable estate except

Answer 6

Property taxes accrued after the decedent’s death. Property taxes accrued after the decedent’s death are not deductible from the gross estate for estate tax purposes.

Question 7

Is accelerated death benefits taxable

Answer 7

Accelerated death benefits are typically not taxed as income.

Question 8

The Saville Disability Trust is a qualified disability trust that has an annual filing requirement. The trust has a fiscal year-end of June 30. When is the trust’s income tax return (Form 1041) due?

Answer 8

October 15.

Question 9

The trustee would like to request an extension of time to file the trust’s income tax return, Form 1041. How should this be done?

Answer 9

File Form 7004:
The trustee can request an extension by filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.
Form 7004 allows the trust to obtain an automatic extension for filing Form 1041.
The extension provides up to 6 additional months to file the trust’s tax return.

Question 10

form 56

Answer 10

Form 56 is used to notify the IRS of a fiduciary relationship.

Question 11

What form do you use to file portability?

Answer 11

To claim the benefit of portability of the estate tax exemption, you must file IRS Form 706 to make the election to add the unused exemption to your own, even if the estate does not owe a tax

Question 12

What amount can be deducted on this estate income tax return as an exemption?

Answer 12

The federal government allows a set $600 exemption on the filing of an estate income tax return. Note that this is not an estate tax (on the value of the estate) but rather a tax on the income earned by the estate.

Question 13

In determining the taxable amount of the estate, which of the following cannot be deducted?

Answer 13

Personal exemption For an estate tax return (Form 706), a number of specific expenses and other costs can be deducted from the gross estate value. These deductions include: funeral expenses, administrative expenses, debts and mortgages, casualty losses, charitable bequests, and marital deduction. A personal exemption is not deducted.

Question 15

Assets disposed of under alternate valuation date rules before the 6 month time frame are valued at FMV (usually the sales price) as of the date of disposition, not the FMV as of the date of death.

Answer 15

Valuation of Assets:
Most assets are valued as of the alternate valuation date.
However, if an asset is disposed of (sold, exchanged, distributed, etc.) within six months of death, it is valued as of the date of disposition.

Question 16

Mr. Brown died on September 30, 2023. His gross estate was valued at $10,670,000. Unless an extension is granted, a Federal Estate Tax Return (Form 706) must be filed on or before

Answer 16

An estate tax return, Form 706, must be filed for decedents who were citizens or residents of the United States at the time of death and the gross estate, plus any adjusted taxable gifts (post-1976 gifts), is more than the filing requirement for the year of death (same as the applicable exclusion amount). An estate tax return is not necessary if the gross estate plus adjusted taxable gifts are less than $12,920,000 for decedents dying in 2023.

While a return is not required the executor of a deceased spouse’s estate can transfer any unused exclusion to the surviving spouse. The exclusion becomes available to the surviving spouse and is in addition to any applicable exclusion to which the survivor is entitled. In the past, only effective estate planning could preserve this benefit. There is a catch—the executor of the estate of the deceased spouse must file an estate tax return on which such amount is computed, and make an election on the return. Such election, once made, shall be irrevocable.

Question 17

706 filing

Answer 17

must file 9 month after the death

Question 18

The trustee would like to request an extension of time to file the trust’s income tax return, Form 1041. How should this be done?

Answer 18

The trustee must file Form 7004 to apply for a 5.5-month extension of time to file.

Question 19

How should one sign the return, since her husband is deceased?

Answer 19

Jenni should sign the return and write in the signature area “Filing as surviving spouse.”

Question 20

what is the due date for filing Form 706

Answer 20

9 months

Question 21

she should elect portability. What must she do?

Answer 21

Form 706 - DSUE Preserve the Exemption

Question 22

For tax year 2023, a qualified disability trust (QDT) can claim an exemption of up to ________.

Answer 22

$4,700