More On Tax Planningfrom The Advisor's Professional Library
- Annuities: Estate Tax The value of certain types of annuities may be included in an estate’s value. Understanding the intricacies of these inclusions is a critically important aspect of estate planning.
- Annuities: Variable Annuities Annuities are hot. The tax rules vary with the circumstances. Advisors must be aware of these intricacies when discussing annuities with clients.
Large estates of people who died last year—those valued at more than $5 million—will have until early next year to file required returns and pay any estate taxes due, the IRS announced Tuesday.
As well, certain beneficiaries of these estates will receive penalty relief on their 2010 federal income tax returns.
The IRS is providing the following filing relief:
- Large estates that opt out of the estate tax now will have until Jan. 17, 2012, to file Form 8939. This special carryover basis form, which is required of estates making the opt-out choice, was previously due Nov. 15. No statement or form needs to be filed with the IRS to have the new due date apply.
- 2010 estates that request an extension to file their estate tax returns and pay any estate tax due will have until March 19, 2012, to file Form 706 or Form 706-NA. Normally, a six-month filing extension is automatically granted to estates filing this form, but extensions of time to pay are granted only for good cause.
- For estates of those who died after Dec. 16, 2010, and before Jan. 1, 2011, the due date is 15 months after the date of death. No late-filing or late-payment penalties will be due, though interest still will be charged on any estate tax paid after the original due date.
The IRS is also providing special penalty relief to individuals, estates and trusts that already filed a 2010 federal income tax return, or obtained an extension and plan to file by the Oct. 17 extended due date. Late-payment and negligence penalty relief applies to persons who inherited property from a 2010 decedent and then sold the property in 2010 but improperly reported gain or loss because they did not know whether the estate made the carryover basis election.