The estate of a New York decedent may be subject to filing both a federal estate tax return Form 706 with the IRS and a Form ET-706 New York Estate Tax Return with the New York State Taxation and Finance based upon the gross estate value after deductions and exemptions. A New York estate tax return must be filed for a New York resident and/or U.S. citizen when the value of the estate is in excess of $1,000,000, together with a copy of the federal Form 706, whether or not the estate owes any federal estate taxes. If the decedent owned real or tangible property in the State of New York but was not a New York resident or U.S. citizen, a New York Estate Tax return must be filed when the decedent’s gross estate exceeds $60,000.
For 2014, federal estate taxes are calculated on the value of the estate in excess of $5,340,000. New York estate tax is calculated on the value of the estate in excess of $1,000,000 based upon a graduated tax rate. The estate may also be subject to a federal Form 1041 to report any income earned by the estate in excess of $600.00 and filing a Form 1041, which is similar to a Form 1040, and Schedule K-1 with the IRS. Generally, the estate does not pay the taxes on the income because it is passed on to the beneficiaries, who are responsible for paying the tax according to their share of distributions received. The estate may deduct legal fees, administrative expenses, executor fees, distributions to beneficiaries and charitable donations.
The federal Form 706 and ET-706 returns must be filed within 9 months after the decedent’s death unless an extension is obtained by the executor/personal representative of the estate or the New York estate attorney representing the estate. It may be possible to get a longer extension if it can be established that there is a financial hardship. The New York Department of Taxation and Finance will issue a closing letter within approximately 4-6 months after the return has been filed and the taxes have been paid stating that no taxes are due.
New York Estate Attorney
New York Estate tax matters and estate administration are complex and require the assistance of a New York estate attorney to make sure that all filing deadlines and requirements are complied with in accordance with the law.
If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at (212) 233-1233.