Estate Tax
My father, (single), passed away on Dec 22, 07 in Texas. The three children are beneficiaries in his will and trust with my sister listed as executor. My sister and I live in Illinois, and the other sibling lives in Texas. I will be filing the decedent's final 2007 Fed 1040 by April 15, 2008. We did not go through probate. There are only two assets in the estate (car and home) with the rest of the cash assets having already passed thru via POD/Joint Tenant to my sister. The total of the cash assets are under 100k, and the car and home are in the process of being sold and both are valued under 100k as well. Will the 1041 return (I'm assuming this is called the ''Estate'' income tax return) have a reporting period from date of death (Dec 22, '07) thru Nov 31, '08? Or will there be two short period returns from Dec 22, '07 to Dec 31, '07 and then Jan 1, '08 thru Dec 31, '08 and onward until the house and car are sold? What would be the due dates for either of these two?
Also, will inheritance tax (Form 706) still be required to be filed (as an informational return) even if the assets are under the threshold of the unified credit of 780k+? Lastly, are there IL inheritance taxes needing to be filed? Thanks in advance.
1 Answer from Attorneys
Re: Estate Tax
1)The 1041 can be filed on a fiscal year for the estate (December 22, 2007 through November 30, 2008). The return would be due 3-15-09.
2) No 706 return needs to be filed. This is only necessary for estates over $2M in 2007.
3) There shouldn't be inheritance taxes to pay in Illinois due to the size of the Estate.
Good luck to you.
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