The executor or administrator of a New York estate is required to consider many factors when administering an estate. One of the items that the fiduciary needs to review is whether estate taxes need to be paid.
In the year 2017 the Federal Estate tax exemption is $5,490,000. New York State also imposes an estate tax and the 2017 exemption after April 1, 2017 is $5,250,000. While many estates appear not to be subject to the tax, it is necessary that all of the decedent’s assets be properly valued in order to avoid a possible claim by the taxing authorities that a tax or additional tax must be paid. The estate tax must be paid and a return filed within 9 months after the death of the decedent. While an extension to file the return can be obtained for 6 months, any non-payment or underpayment of the tax can result in the imposition of substantial interest and penalty charges. It is not unusual for the Internal Revenue Service or local tax authority to require an audit and to claim that estate assets have been undervalued. This is especially true with business interests and other hard to value assets such as artwork. Continue reading