How to Calculate Estate Tax Deduction

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In order to calculate estate tax deduction, it's necessary to get the IRS form 706, as this return is used for executors of decedents estates. Find out about possible deductions, such as expenses of the estate, mortgages and debt, with information from an independent CPA in this free video on estate tax deductions.

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Video Transcript

My name is Miranda Chook and I'm a CPA and right now we're going to talk about estate tax deductions. You need IRS form 706, the estate tax return. Now this return is for executors of a decedents estate to calculate the taxes due to the IRS on the entire estate. And this is not what is used by beneficiaries who've received a share of the estate. Now you can find this at the IRS' own website at IRS.gov, or if your computer is crashed you can also call the IRS' toll free number, 800 number, and they'll mail a copy to you. Now examples of deductions include expenses of the estate, mortgages, debts of the decedent, things like that. Also things that can be deducted are expenses or losses that were suffered during the administration of the estate such as theft or a fire that wasn't covered by insurance. You also will deduct bequeaths from the value of the estate. Now all these deductions go to, of course, reduce the value of the estate so you're applying taxes to the net amount of the estate. So again these are just general guidelines, so please check with an experienced financial adviser to see how this may affect your specific circumstances.

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