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6. Does the Estate have to Pay Estate Tax in Every Estate? The answer is no. Under current Federal Law enacted for 2002, no Estate Tax is payable in 2010. However, unless the law is changed before the end of the year, only estates of $1,000,000 gross value, and under, will pay no Federal Estate Tax unless the law is changed. Unless the law is changed, in estates that are over $1,000,000 in gross value, the representative of the estate must file a tax return and pay the estate tax within nine months of the date of death of the decedent. A Federal Estate Tax Form 706 is usually prepared by the probate attorney or probate accountant. On the state level, California has an estate "pick up" tax that is based upon the federal estate tax and is a dollar for dollar credit against the federal tax paid. The estate does, however, have to continue to pay income tax on monies that it earns after the date of death of the decedent, regardless of its size.

Copyright © 2002
by Nancy Pack-Rayman and Michael Norman Saleman
All rights reserved.