Top Mistakes

							TOP 10 MISTAKES


 Federal Estate & Gift Tax
# 10
Schedule K - Real Estate Taxes
 Real Estate Taxes are only deductible if they
  are a lien at date of death.
 In Nebraska, real estate taxes become a lien
  on December 31. See Neb. Rev. Stat. § 77-
  203.
 Real Estate Taxes are deducted on
  Schedule K, not Schedule J.
#9
Schedule J – Expenses of Administration
 Expenses of the Heirs to attend the
  Decedent’s funeral are not deductible
        Travel Expenses
        Hotel Expenses
        Meals
 Duplication of Expenses on 1041 and 706
 Estimates
 Necessary for Administration of Estate
#8
Real Estate Valuation
 Do not include at assessed value
 Real Estate must be included at its Fair Market Value
 Liens against the real estate should be included on
  Schedule K
 Personal Property should be separated from Real
  Property
 Use an Independent Appraiser
 Sale of Property may be relevant
 Sales Expenses not deductible unless necessary to
  pay debts and expenses of estate or to effectuate
  distribution
#7
Prior Gifts
 Determine if there were any prior gift tax
  returns filed by the Decedent
 Obtain the prior gift tax returns
 Review the prior gift tax returns
 Determine if there were gifts made by the
  Decedent that were not reported on a gift tax
  return
 Penalties for Line 4 omitted gifts
#6
Review the Decedent’s Will and Testamentary
  Documents
 Trace any property included in the will that is
  omitted from inventory
 Determine the proper disposition of the
  property
#5
Review the Decedent’s Form 1040
 Interest
 Dividends
 Real Estate
 Business Interests
 Refunds
#4
Overfunding the Marital Share
 Reduce Marital Share by the Transmission
  Expenses
 Reduce Marital Share by Federal and State
  Estate Taxes paid from the Marital Share
 Reduce Marital Share by Debts and
  Expenses Paid from Marital Share
#3
Charitable Deductions
 Bequests to Cemeteries are generally not
  deductible
 Bequests to Masonic Groups are generally
  not deductible
 Transfers of Personal Property to Charity are
  only deductible if the Will or Trust Document
  provide for such disposition
#2
Tangible Personal Property
 Provide a list of the Personal Property
 Include at Fair Market Value
 Review Insurance Policies and Addendums
#1
Valuation of Closely-Held Entities
 Independent Appraisal
 Business Purpose
 Agreement
 Sales
 Formalities of Entity
 Interpretation of Facts
 Interpretation of Law
 Discounts
Miscellaneous Items
 Amended Returns
 Reporting Assets Located After Return Filed
 Transactions Between Family Members
 Interrelated Computation
 Section 6166 Changes
 Sections 2032A and 2057 Projects
 Nonfilers
Michele L. Moser
Attorney, Estate Tax
 1313 Farnam St., STOP 4431-OMA
  Omaha, NE 68102-1881
 Phone: 402-221-3779
 Fax: 402-221-3616
 Estate and Gift Tax, Cincinnati Service
  Center 1-866-699-4083