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An estate generally has two kinds of taxes: Estate Tax and Income Tax. An Estate Tax is the tax imposed on the transfer of assets from the decedent to theirs heirs and beneficiaries. On the other hand, Income Tax in the US is the tax imposed on the income by the Federal, state and many local governments. Thus, every business that is bequeathed or transferred to by a decedent is subject to an Estate Tax. Experts in this field render mostly Estate Tax Preparation services to various business organizations.
It is always challenging to calculate Estate Tax — this is the reason why the Internal Revenue Service always recommends hiring an estate tax professional to handle complicated cases. The underlying factors that may directly affect an Estate Tax’s complications are: estate size, number of beneficiaries, and the condition of a decedent’s records. Many estate taxes have complications caused by uncooperative beneficiaries. From these cases, the IRS believes it is helpful to get help from a tax preparation service provider and entrust the processing to them as they are experts in tax laws and IRS regulations.
Once the IRS reviews and files your estate tax return, they issue an Estate Tax Closing Letter. The filing process can take anywhere from four to nine months if there are no errors. An error can delay the processing by weeks or months. Understandably, heirs often can’t wait more than a year to close an estate and get rid of liens. They’re already dealing with a loved one’s passing and are either emotionally and physically drained or are still coping thus not in the best condition to deal with the IRS on top of everything else.
Form 706 is used by the executor of the decedent’s estate to help them determine the estate tax that has been imposed. Ideally, the tax is imposed on the entire taxable estate as opposed to just the share received by the heirs or beneficiaries. This form is also used to help determine the generation-skipping transfer (GST) tax. This form must be filed within the first nine months after the decedent’s death. In case you fail to meet the deadline, you do not have to worry because you can always request for an extension of time in order to file.
This process can be tedious and totally draining. Hiring professionals who can render the services you need such as Class Advisors is always the best option. They have expertise with estate taxes as well as the IRS regulates over assets which are inherited. Moreover, Class Advisors can answer your questions and address concerns about the estate taxes such as:
- What’s included in a estate tax?
- How are domestic partnerships and civil unions handled?
- How can I reduce the estate tax?
- When can I sell property that I’m inheriting?
- Is it possible to request more time to file?
Estate tax preparation doesn’t need to be stressful. To ensure fast and reliable estate tax preparation without the fuss and errors, contact Class Advisors. We always serve our clients with our best!