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Estate and Gift Taxation

For the estates of persons who died during 2015, a Federal Estate Tax Return (Form 706) has to be filed if the gross estate amounts to or exceeds $5,430,000.00.  (See What Are the 2015 Federal Estate and Gift Tax Filing Figures?)  For Massachusetts, the filing of a Massachusetts Estate Tax Return (Form M-706) is required beginning at a gross estate of $1,000,000.00, and the Massachusetts estate tax strangely requires the preparation of a 1999 Federal Estate Tax Return.

The federal figures will be changing slightly in 2016.  What Are the 2016 Federal and Massachusetts Estate and Gift Tax Filing Figures?

Any type of transmittal of value from the deceased person to other persons or entities is subject to estate taxation. Life insurance proceeds, business interests and lifetime gifts can be factored into the estate tax calculations.

These estate tax returns are due 9 months after the person’s death. Although the filing of the returns can be extended by 6 months, the tax is still due 9 months after death, and interest and penalties can run on any underpayments.

To force estates to file the required Massachusetts Estate Tax Return, a Massachusetts estate tax lien arises by operation of Massachusetts law on any Massachusetts real estate interest of the decedent, including a life estate. This Massachusetts estate tax lien has to be dealt with before the decedent’s real estate interests can be sold.  Therefore, any person who dies owning any interest in Massachusetts real estate has to deal with the Massachusetts estate tax, even if the decedent’s estate is worth less than $1,000,000.00.