Will My Estate Owe Estate Taxes?
I am not a tax attorney or a certified public accountant. You should not rely on information contained on this page in making any tax decisions. You should instead consult with your certified public accountant or tax attorney.
Estates of decedents are tax by both the state and federal governments. Federal and state estate taxes are calculated upon the gross estate of the decedent, including the fair market value of all his assets. Some items may be deducted from the gross taxable estate, such as mortgages, costs of estate administration, other debts, property passing to surviving spouses, and property given to qualified charities. Tax is imposed on all funds of the decedent, but the tax owing is reduced by the amount of tax owed on a specified sum, which is called the estate “tax credit.” The amount of this tax credit differs between the federal and state tax regimes.
Concerning Washington estate taxes, for decedent’s dying after January 1, 2006, the tax credit leaves no tax owing on estates of $2,000,000 or less. See RCW 83.100. Washington tax rates are contained at RCW 83.110.040.
Concerning federal estate taxes, for decedent’s dying after December 31, 2009, the tax credit leaves no tax owing on estates of $5,250,000 or less (2013). The federal estate tax regime lumps lifetime gifts (only for gifts in excess of $14,000 per person in 2013) together with the decedent’s gross estate, creating a unified estate and gift tax regime. The federal estate and gift tax regime has been recently revised. See Internal Revenue Code, Chapter 11. Complex rules govern elections concerning which regime to file under during the transition into the new estate tax regime. Consult your certified public accountant.
Federal estate taxes are filed on Form 706. If a federal return is due, the State of Washington also requires a return, even if one asserts that no tax is owed. If no federal taxes are owed, and no Form 706 is filed, tax may still be owed in Washington. File the Washington State Estate and Transfer Tax Return. Both returns are, barring extensions, due nine months after decedent’s death.
I REPEAT: I am not a tax attorney or a certified public accountant. You should not rely on information contained on this page in making any tax decisions. You should instead consult with your certified public accountant or tax attorney.