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ESTATE AND GIFT TAX AUDITS First Run Broadcast: January 29, 2013 1:00 p.m. E.T./12:00 p.m. C.T./11:00 a.m. M.T./10:00 a.m. P.T. (60 minutes) Every estate and gift tax return is reviewed by hand by

How to fill out estate and gift tax

How to fill out estate and gift tax:

1. Gather all relevant financial information: To accurately fill out the estate and gift tax forms, you will need to collect detailed information about the assets and gifts involved. This includes documentation of any property transfers, bank accounts, investments, business interests, and other valuable assets.
2. Determine the applicable tax forms: Depending on the value of the estate and gifts, as well as other specific circumstances, different tax forms may be required. Commonly used forms for estate and gift taxes include Form 706 for estates, Form 709 for the gift tax return, and various schedules and supporting documents.
3. Consult with a tax professional or attorney: Estate and gift tax laws can be complex, and it is highly recommended to seek professional advice when filling out these forms. A tax professional or attorney with expertise in estate planning and taxation can guide you through the process and ensure that you comply with all legal requirements.
4. Calculate the taxable estate: If you are filling out an estate tax return, you will need to determine the value of the estate. This involves assessing the fair market value of all assets and subtracting any allowable deductions or exemptions. The resulting amount will be the taxable estate, which will determine if estate taxes are owed.
5. Determine gift tax liability: For gift tax returns, you will need to determine the value of gifts made during the tax year. This includes both cash and non-cash gifts. The annual exclusion amount allows for tax-free gifts up to a certain value, but any gifts that exceed this amount may be subject to gift taxes.
6. Complete the tax forms accurately: Carefully fill out the applicable tax forms, ensuring that all required information is provided, calculations are accurate, and appropriate schedules are attached. Mistakes or omissions can lead to delays, penalties, or even audits.
7. File the tax returns: Once you have completed the tax forms, file them with the appropriate tax authorities. The filing deadlines may vary depending on the specific type of tax return and your individual circumstances. It is important to submit the returns on time to avoid any penalties or interest charges.

Who needs estate and gift tax:

1. Individuals with significant assets: Estate tax applies to the transfer of property after an individual's death if their estate's total value exceeds a certain threshold (which is subject to change). Therefore, individuals with significant assets need to consider estate tax planning and filing requirements.
2. Executors of estates: The executor of an estate, the person responsible for overseeing the distribution of assets after someone's death, is typically responsible for filing the estate tax return. They need to ensure the accurate reporting of the estate's value and any taxes owed.
3. Individuals making substantial gifts: Gift tax applies to the transfer of property during a person's lifetime if the gifts exceed the annual exclusion amount (which is also subject to change). Therefore, individuals who plan to make substantial gifts that exceed this threshold should be aware of the gift tax rules and reporting requirements.

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What is estate and gift tax?

Estate and gift tax is a tax on the transfer of property from one person to another, either during life or at death.

Who is required to file estate and gift tax?

Individuals who transfer property by gift during their lifetime or individuals whose estate transfers property upon their death are required to file estate and gift tax.

How to fill out estate and gift tax?

To fill out estate and gift tax, individuals must gather information on all gifts made during their lifetime and report it on Form 709, and for estate tax, the executor of the estate must file Form 706.

What is the purpose of estate and gift tax?

The purpose of estate and gift tax is to tax the transfer of property to prevent large accumulations of wealth from being concentrated in the hands of a small number of individuals.

What information must be reported on estate and gift tax?

Information such as the value of the gifts or estate, the relationship between the donor and recipient, and any deductions or exemptions claimed must be reported on estate and gift tax forms.