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Intermediate1 hour9 terms

Form 706 & Real Estate Estate Tax Terms

This curated collection offers key terms that might be helpful when exploring Form 706 and its implications for real estate investors. It's designed as a quick reference to commonly encountered concepts, supporting your learning without providing exhaustive coverage.

Term Collection

1

Taxable Estate

The portion of a deceased person's estate that is subject to federal and/or state estate taxes after all allowable deductions and exemptions have been applied. It represents the net value of assets upon which estate tax is levied.

Intermediate5 min
2

Estate Tax

A federal and/or state levy on the transfer of a deceased person's net assets to their heirs, calculated on the fair market value of the estate at the time of death or an alternate valuation date, after specific deductions and exemptions. It is a tax on the right to transfer property, not on the right to receive it.

Advanced8-9 min
3

Estate Planning

Estate planning is the process of arranging for the management and disposal of a person's assets, including real estate, during their life and after death, to minimize taxes and ensure wishes are met.

Intermediate15-18 min
4

Gross Estate

The total fair market value of all assets an individual owns or has certain interests in at the time of their death, before any deductions or liabilities are considered. It's crucial for estate planning and determining potential estate tax liabilities.

Intermediate5 min
5

Unified Credit

The Unified Credit is a federal tax credit that offsets gift and estate taxes, allowing individuals to transfer a certain amount of wealth tax-free during their lifetime or at death.

Intermediate5 min
6

Real Estate Trust

A real estate trust is a legal arrangement where a property owner transfers title to a trustee, who holds and manages the property for the benefit of designated beneficiaries, offering advantages like privacy, asset protection, and streamlined estate planning.

Intermediate15-18 min
7

United States Estate (and Generation-Skipping Transfer) Tax Return

Form 706 is the official IRS document used to calculate and report federal estate tax and generation-skipping transfer (GST) tax liabilities for the estates of deceased U.S. citizens or residents, requiring detailed asset valuation and deduction claims.

Advanced13-15 min
8

Step-Up in Basis

A critical tax provision that adjusts the cost basis of an inherited asset to its fair market value on the date of the decedent's death, effectively eliminating capital gains tax on appreciation that occurred during the decedent's lifetime.

Advanced5 min
9

Family Limited Partnership

A Family Limited Partnership (FLP) is a legal entity used by high-net-worth individuals to transfer assets to younger generations while retaining control, reducing estate taxes through valuation discounts, and providing robust asset protection.

Advanced8 min

Common Questions