1. Tax Considerations in the Administration of Estates
Chapter 11

2. Tax Concerns Income Tax Death Tax Gift Tax Levy of tax on income
Levy of tax on property transferred at death
Gift Tax
Levy of tax on property transferred during life

3. Applicable Credit Amount
A credit against the federal unified transfer tax on gifts and estates
The credit is subtracted from the tentative tax due

4. Marital Deduction
A testator’s estate is entitled to the marital deduction for transfer of property between spouses if there is a surviving spouse and if the decedent leaves all or a portion of his/her estate to the surviving spouse

5. Uniform Transfers to Minors Act
Allows any kind of real or personal property to be transferred to a custodianship as a gift to a minor
Any gift transferred under this act is irrevocable

6. Generation-Skipping Transfer
A transfer of assets to a person two or more generations below the transferor, e.g., from grandparent to grandchild
Is subject to federal tax when its value exceeds a person’s lifetime exemption

7. Generation-Skipping Transfer Trust
A trust that partially avoids the federal gift and estate tax on large sums of money or other valuable assets transferred to a beneficiary two or more generations below the transferor
Is subject to federal tax when its value exceeds a person’s lifetime exemption

8. Tax Returns The Personal Representative’s Responsibilities
Federal Income
State Income
Federal Fiduciary Income
State Fiduciary Income
Federal Gift (and Generation-Skipping Transfer)

9. Tax Returns The Personal Representative’s Responsibilities State Gift
Federal Estate (and Generation-Skipping Transfer)
State Estate
State Inheritance

10. Gross Estate
All assets owned by the decedent at the time of death and the value of any interest held in property

11. Gross Estate For tax purposes, valuation of assets can be made
on the basis of their fair market value on the date of the decedent's death
on the basis of an alternate valuation date for determining the fair market value, if this date decreases both the value of the gross estate and the federal estate tax liability

12. Taxable Estate
After a determination of the gross estate, deductions and exemptions are applied to determine the taxable estate

13. Taxable Estate Deductions, claims, and credits allowed by statute
Expenses, liens, debts, taxes
Losses during administration of the estate
Marital deduction
Charitable deductions
State death tax deduction
Applicable credit amount and other allowable credits