What are the Tax Rules for Deaths in 2022?

For deaths occurring in 2022, add together the fair market value of all assets included in the estate, before deductions.  If the total is less than $12.06 million, then no Federal Estate Tax Return is required, and no tax will be due.  All heirs will receive their property free of tax, and will receive a basis equal to the fair market value on the date of death.  As a result of the 1/2/2013 taxpayer relief act, the exclusion and rates are now permanent and the exclusion amount is inflation adjusted.

If the total value of all taxable assets exceeds the dollar limit, then an estate tax return may be due.  A Federal Estate tax return must be filed to determine if the tax is due.  Federal Form 706 is used to file an estate tax return, and the form is due nine months after the date of death.  A final Form 1040 should also be filed for the year of death.