Do You Need A Tax / IRS Appraisal?
Appraisals, Taxes and the IRS
As an executor or administrator of an estate you have been entrusted to carry out the wishes of the deceased estate plan as swiftly and exactly as possible. Federal estate tax returns are required whenever the total value of the decedent’s assets exceed the applicable filing thresholds. Effective for 2009 if the total value of a decedent’s assets exceed $3,500,000, a Federal estate tax return will be required; for 2010 the estate tax has been repealed; for 2011 $5,000,000 exemption and a maximum top tax rate of 35%, and for 2012 it will go back to $1,000,000 exemption with a 55% tax rate unless congress acts again.
The IRS has issued a new Form 8939 Allocation of Increase in Basis for Property Acquired From a Decedent and is due November 15, 2011. The form provides guidance to an executor of an estate on the treatment of basis for certain types of estates who died in 2010 to opt out of the estate tax and have the carryover basis rules apply. The new form must be attached to the decedent’s final 2010 return if the decedent’s gross estate exceeds $1.3 million. The failure to do so could subject the taxpayer to a $10,000 penalty. It is probably good practice to attach the 8939 form even if not mandatory for several reasons: (1) beneficiary basis can be established (2) to initiate a 3-year period for valuation challenges by the IRS.
For gift tax when the valuation of the gift exceeds $13,000. Generally, for personal property Treasury Regulation Section 20.2031-6(b) generally requires that when any one article has a value exceeding $5,000, or if the total value of a collection of similar articles has a value exceeding $10,000, an appraisal must be filed with the return. As an executor of a decedent’s estate your attorney, accountant, CPA, or tax professional will most likely be filing tax forms 1041, 1040(e), new 8939, takes the place of 706, 706A to figure the estate tax imposed by Chapter 11 of the Internal Revenue Code or for gift tax form 709, 1099-R and 5498.
The appraisal process can be confusing. Nathan says his job is to connect with you, and simplify the process for you. Bernhardt Appraisal’s number one job as a real estate appraiser is to be credible.
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