Federal Estate Tax Basics and When Form 706 Is Required
Published November 5, 2026
The federal estate tax applies to a person's estate when that person dies. The personal representative, who handles the estate, may have to file Form 706, the United States Estate (and Generation-Skipping Transfer) Tax Return. Most estates are below the federal threshold and do not file it. This post covers the rules for people who died in 2025. Publication 559 uses the term personal representative for the person who handles the estate, such as an executor or administrator. IRS: Publication 559 (2025)
The 2025 filing threshold
For a person who died in 2025, Form 706 must be filed if the gross estate, plus any adjusted taxable gifts and the specific gift tax exemption, is more than $13,990,000. That amount is the basic exclusion amount for 2025 deaths. IRS: Publication 559 (2025)
For a person who dies in 2026, the Form 706 instructions give a basic exclusion amount of $15,000,000. IRS: Instructions for Form 706 (Rev. July 2026)
Gifts made during life count
The filing test includes adjusted taxable gifts. Taxable gifts made during life are added to the test. This means a return can be required even when the property held at death is below the threshold. IRS: Instructions for Form 706
Portability can require a return anyway
Form 706 must also be filed on time if the estate elects to transfer any unused exclusion, called DSUE, to a surviving spouse. This is the portability election. It applies even when the estate is below the threshold. IRS: Publication 559 (2025)
Due date and extension
If Form 706 is required, the return and any tax are due 9 months after the date of death. To request an automatic 6-month extension of time to file, use Form 4768. The IRS says the extension covers the filing deadline, and separate rules apply to payment. IRS: Publication 559 (2025)
The return itself is Form 706. The instructions list the schedules that must be attached when they apply. IRS: Instructions for Form 706
What this post does not cover
Publication 559 says it does not contain all the rules for federal estate, gift, or generation-skipping transfer taxes. It also does not cover all rules for nonresident noncitizens. Use the publication and the Form 706 instructions for those details. IRS: Publication 559 (2025)
State inheritance taxes are separate
Some states tax inheritances. The federal estate tax and a state inheritance tax are different taxes. A state inheritance tax is set by state law, and the rules vary. Publication 551 notes that property may be appraised for state inheritance or transmission tax purposes. Check your state's rules for these taxes. IRS: Publication 551 (12-2025)
How this relates to income tax basis
A return filed for the federal estate tax does not change how heirs figure basis for income tax. Property received at death generally takes a basis equal to its fair market value on the date of death. See inherited property basis. IRS: Frequently asked questions on estate taxes
Steps for the personal representative
- Record the date of death and the gross value of the estate.
- Add the adjusted taxable gifts and specific gift tax exemption, as the rule requires.
- Compare the total with the threshold for the year of death.
- Decide whether a portability election matters for a surviving spouse.
- If Form 706 is due, calendar the 9-month date. Consider Form 4768 if more time is needed.
Estate rules are technical. The IRS publications above are the source for the amounts in this post. The instructions say the dollar amounts are indexed for inflation, so check the current IRS pages before you rely on a figure from an earlier year. IRS: Instructions for Form 706
General information, not advice for your situation.
Sources: Sources: IRS, Publication 559, Survivors, Executors, and Administrators (2025) (https://www.irs.gov/pub/irs-pdf/p559.pdf); IRS, Instructions for Form 706 (Rev. July 2026) (https://www.irs.gov/pub/irs-pdf/i706.pdf); IRS, Form 706 (https://www.irs.gov/pub/irs-pdf/f706.pdf); IRS, FAQ on estate taxes (https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-estate-taxes) This is general information, not advice about your specific return.
