706/709 Preparation and Planning Guide (2007-2008)Today there is an air of uncertainty about federal estate and gift taxes. Changes set into motion by the Economic Growth and Tax Relief Reconciliation Act of 2001 continue to be phased in. At the same time, there have been repeated efforts to win complete repeal of the federal estate tax. There is a continued need to understand the rules for the federal estate and gift tax returns, as many individuals continue to be obligated to file them. While increasing exemption amounts are designed to allow individuals to pass on more of their wealth tax free when they die, many are still subject to estate tax, because they own more property than ever due to a strong housing market, increased participation by workers in qualified retirement plans, and other factors. Additionally, lifetime transfers may be subject to gift tax. Consequently, it remains essential to understand the current rules for when and how to complete returns for estates (Form 706) and for gifts (Form 709). |
