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What should executors know about filing estate taxes?

If you are the executor of an estate that exceeds the Massachusetts exclusion amount of $1 million, you may have some questions about paying the estate taxes.

Here are some answers to commonly asked questions about filing estate taxes, according to Mass.gov:

Due dates

You must file the tax return along with the payment due within nine months after the testator dies. You may be able to file for an extension, but only if you have already paid 80 percent or more of the estimated tax due. Even when an extension is granted, there will be interest charged on the remainder from the original due date until the rest is paid. 

Penalties on late returns

If you do not file the return or apply for an extension within nine months, there will be penalties both for filing late and for late payments, in addition to interest charges on all amounts not paid. 

Valuation of estate property

All property that the testator had an interest in will have to be assessed for fair market value, either based on the date of the testator's death or on an alternate date six months after that. The testator's own property is not all you must value.

Before you can file the tax return, you must also know the value of the testator's life insurance proceeds; interests in community property; estates held jointly with right of survivorship; property owned by the spouse due to tenancy by the entirety; any statutory estate, curtesy or dower of a surviving spouse; and transfers or gifts the testator made without consideration of their monetary value.

This general information is provided for educational purposes; it is not intended to provide legal advice.

 

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