Unified Credit Increases
The unified credit for gift and estate taxes increases to $202,050
for gifts made in 1998 and for the estates of decedents dying in 1998.
Previously, this amount was $192,800.
The following table lists the unified credit for years after 1998.
| Year |
Unified Credit |
| 1999...................................... |
$211,300 |
| 2000 and 2001...................... |
220,550 |
| 2002 and 2003...................... |
229,800 |
| 2004...................................... |
287,300 |
| 2005...................................... |
326,300 |
| After 2005............................ |
345,800 |
Estate Tax Return Filing Requirement Increases
Generally, an estate tax return must be filed for the estate of a
U.S. citizen or resident dying in 1998 if the gross estate is more than
$625,000. Previously, this amount was $600,000.
The following table lists the filing requirement for estates of decedents
dying after 1998.
| Year of Death |
Filing Requirement |
| 1999................................................. |
$650,000 |
| 2000 and 2001................................. |
675,000 |
| 2002 and 2003................................. |
700,000 |
| 2004................................................. |
850,000 |
| 2005................................................. |
950,000 |
| After 2005....................................... |
1,000,000 |
New Deduction From Gross Estate
For estates of decedents dying after 1997, the executor can elect
to deduct the adjusted value of a qualified family-owned business interest,
up to a limited amount, from the gross estate. For more information, see
section 2057 of the Internal Revenue Code and the Instructions
for Schedule T, Form 706, United States Estate (and Generation-Skipping
Transfer) Tax Return.
Suit for Refund
Effective July 23, 1998, an executor no longer needs to wait until
all the installment payments have been made before filing a suit for refund
with a federal district court or the U.S. Court of Federal Claims if the
following conditions are met.
- The estate consists largely of an interest in a closely-held business.
- The estate elected to make tax payments through the installment
method.
However, all of the following must be true before a suit can be filed.
- All installment payments due on or before the date the suit is filed
have been made.
- No accelerated installment payments have been made.
- No Tax Court case is pending with respect to any estate tax liability.
- The time for petitioning the Tax Court has passed if a notice of
deficiency was issued to the estate regarding its liability for estate
tax.
- No proceeding is pending for a declaratory judgment by the Tax Court
on whether the estate is eligible to pay tax in installments.
In addition, the executor must not:
- Include any previously litigated issues in the current suit for
refund, and
- Discontinue making timely installment payments while the court considers
the suit for refund.
The
IRS is not permitted to collect any amount disallowed by the Court. Any
amounts paid in excess of the amount determined by the Court will be refunded.
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