Decedant's Income Taxes

Estate Income Taxes

Estate Taxes

Depending on the size of a decedent's estate, a personal representative may be required to file an Estate Tax Return.

The estate tax is not based on income, but is based on the amount of the gross estate. Over the next few years, the estate tax filing requirement for an estate will depend on the year of death of the decedent. Refer to the chart below:

For example, if the gross estate of a decedent who dies in 2003 is $1,000,000 or more, the personal representative will be required to file an estate tax return. In calculating the filing requirement, adjusted taxable gifts made during the decedent's lifetime must be added to the gross estate figure.

Generally, the estate tax return, if required, is due 9 months after the decedent's death. A 6 month extension is available if requested before the due date of the return and the estimated tax is paid.

Simply stated, the taxable estate is the gross estate less allowable deductions.

A decedent's gross estate includes the value of all property in which the decedent had an interest at the time of his or her death. It also includes assets such as life insurance proceeds payable to the decedent's estate or, if the decedent owned the policy, to the decedent's heirs, the value of certain annuities payable to the decedent's estate or his or her heirs, and the value of certain property transferred by the decedent within 3 years before his or her death.

Deductions include funeral expenses paid out of the estate, debts owed by the decedent at the time of death, and the marital deduction, if applicable.

If a Federal Estate Tax return is required to be filed, a Virginia Estate Tax Return (Form EST-80) must also be filed. Virginia imposes an estate tax in an amount equal to the maximum amount of the credit for state death taxes allowable under Section 2011 the Internal Revenue Code as it existed on January 1, 1978.

Forms >>>