Small estates -- any need to file 706?

[samingeorgia]

I was discussing this with a colleague today. Assume that Zelda Gotrocks dies with the following: CD's $ 500,000; Residence $ 195,000; land $ 425,000. No spouse, no debts, minimal final expenses. Zelda's niece, her executor, get appraisals on the land.

Assuming that the exclusion amount is $ 2,000,000, is there any point or requirement to file a 706 to establish basis?

Note: All figures are hypothetical.

[OldJack]

I see no need to file an estate tax return as basis for everything appears to have documentation for later tax purposes. I assume there have been no life time gifts in excess of annual exclusions, beneficiary of life insurance, retirement plan accounts, or other items that must be included in the estate assets.

[Linda Mathey]

I was discussing this with a colleague today. Assume that Zelda Gotrocks dies with the following: CD's $ 500,000; Residence $ 195,000; land $ 425,000. No spouse, no debts, minimal final expenses. Zelda's niece, her executor, get appraisals on the land.

Assuming that the exclusion amount is $ 2,000,000, is there any point or requirement to file a 706 to establish basis?

Note: All figures are hypothetical.

I agree no need to file 706 but if you live in a state like I do, the threshold for filing the state inheritance return is much lower and that would document the basis.

[joelgilb]

besides the Unified Credit for a person dying in 2009 is $1,455,800 which exempts $3.5 million not $2 mil

[LindaB]

besides the Unified Credit for a person dying in 2009 is $1,455,800 which exempts $3.5 million not $2 mil

And for someone dying in 2010 the estate tax, but not gift tax, is repealed. And also for 2010 the stepped-up basis for inherited property is repealed! They are scheduled to be reinstated after 2010 unless Congress acts.

[Kea]

I thought the step-up stayed repealed (unless they change it). I would hope that's only repealed for one year. It's hard enough to get the basis from the owner. It will be next to impossible to get the basis from the heirs. They will have no idea what the decedent paid!

[joelgilb]

I thought the step-up stayed repealed (unless they change it). I would hope that's only repealed for one year. It's hard enough to get the basis from the owner. It will be next to impossible to get the basis from the heirs. They will have no idea what the decedent paid!

Well it's our government at work trying to keep us employed!

Got to love them for that...

[joelgilb]

In fact this kind of reminds me of a kids song. Goes something like this...

Sung to the tune of Knees up Mother Brown:

Fees up Mother Brown

Fees up Mother Brown

To your Accountant, you must go

Ee-aye, Ee-aye, Ee-aye-oh

If I catch you not paying

I'll levy what you have left

Fees up, Fees up

Got to keep the fees up

Fees up Mother Brown!