Probate And Estate Tax Return Preparation For Paralegals

The Paralegal Resource
October 30, 2012 — 1,776 views  
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Probate And Estate Tax Return Preparation For Paralegals

In preparing tax returns for trust or estate settlements, the Internal Revenue Service Form 706 is used. As with any IRS form, necessary information must be gathered beforehand, in order to be thorough. There are 20 schedules to be addressed with this form so good organizational skills and attention to detail are essential. It may seem like a daunting task but there's a bright side. Usually, nine months are given, after the decedent's death, to file Form 706. Also, depending on applicable circumstances, deadline extensions may be possible.

The specific schedule titles of Form 706 help to determine the steps the executor of the estate must take in listing and procuring the supporting documentation.

SCHEDULE A--Real Estate
SCHEDULE A-1--Section 2032A Valuation
SCHEDULE B--Stocks and Bonds
SCHEDULE C--Mortgages, Notes, and Cash
SCHEDULE D--Insurance on the Decedent's Life
SCHEDULE E--Jointly Owned Property
SCHEDULE F--Other Miscellaneous Property Not Reportable Under Any Other Schedule
SCHEDULE G--Transfers during Decedent's Life
SCHEDULE H--Powers of Appointment
SCHEDULE I--Annuities
SCHEDULE J--Funeral Expenses and Expenses Incurred in Administering Property Subject to Claims
SCHEDULE K--Debts of the Decedent, and Mortgages and Liens
SCHEDULE L--Net Losses during Administration and Expenses Incurred in Administering Property Not Subject to Claims
SCHEDULE M--Bequests, etc., to Surviving Spouse
SCHEDULE O--Charitable, Public, and Similar Gifts and Bequests
SCHEDULE P--Credit for Foreign Death Taxes
SCHEDULE Q--Credit for Tax on Prior Transfers
SCHEDULE R and R1--Generation-Skipping Transfer Tax
SCHEDULE U--Qualified Conservation Easement Exclusion
SCHEDULE PC--Protective Claim for Refund

Included under several of the broad sections are defined parts that also need to be taken into consideration. For instance, in Schedule A-1, there are three subordinate parts to address. They expand on the valuation of property by delving into its use by the decedent or the decedent's heirs.

The two parts of Schedule E include qualified joint interests held by the decedent and spouse, as well as all other joint interests. Schedule Q -- also comprised of two parts -- requires detailed information on the transferor, and the computation of credit involving the tax for the transferee as well as the transferor.

Schedules R and R-1, with four parts total, are concerned with trusts. They require all pertinent information on the trustee and the cited generational people.

Someone once quipped that living is easy; it's the red tape of dying that's much harder. For those whose work it is to gather the life's paperwork of strangers, those words may ring true.

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