The IA 706 Iowa Inheritance Tax Return form is a document used in the state of Iowa to report and pay the inheritance tax due on an estate after someone has passed away. This includes details about the decedent, such as their name, address, social security number, the value of their real estate and other property, and the computation of shares and tax on the net estate. Click the button below to fill out the form and ensure the proper handling of the inheritance tax obligations.
Navigating the intricacies of inheritance tax can be a daunting task, particularly when dealing with the aftermath of a loved one's passing. The IA 706 Iowa Inheritance Tax Return plays a crucial role in this process for residents of Iowa or for estates administered within the state. This comprehensive form, provided by the Iowa Department of Revenue, captures vital information regarding the deceased, including their full name, last address, Social Security Number, and the details surrounding their passing such as age and date of death. It also requires details about the executor, including their Social Security Number and address, as well as the Iowa county where the will was probated or the estate administered. Beyond these basics, the form delves into the financial aspects of the estate, requiring detailed computations of shares, taxable estate valuations, and deductions. The responsibility of accurately reporting the estate's total gross value, including real estate, stocks, bonds, and other properties, lies with the executor, who must also navigate allowances for funeral and administrative expenses amongst other deductions. Electing for special valuations, addressing federally filed returns, and determining marital status and potential heirs are additional facets covered. The form even extends to permissions for a representative to act before the Iowa Department of Revenue, highlighting its all-encompassing nature in facilitating the inheritance tax reporting and payment process.
IA 706 Iowa Inheritance Tax Return
tax.iowa.gov
Decedent’s first name and middle initial: ___________________________ Decedent’s last name: ____________________________
Decedent’s last address (domicile at time of death): __________________________________________________________________
City:____________________ State:______ ZIP: ____________ Decedent’s Social Security Number (SSN): ___________________
Estate Federal Employer Identification Number: _______________ Age at Death:______ Date of Death (MM/DD/YYYY): __________
Name of Executor: ____________________________________________ Executor’s SSN: _________________________________
Executor’s mailing address: _____________________________________ City:_____________ State: ________ ZIP: __________
Iowa county where will was probated or estate administered: _______________________ Probate number: _____________________
Taxpayer information is confidential. Ordinarily, the Iowa Department of Revenue will only discuss confidential tax information with the taxpayer, or the taxpayer’s power of attorney. However, the Department can discuss confidential state tax information with an individual authorized under a tax information disclosure designation, but only to the extent permitted by such designation. This form may be used to authorize one individual to act as power of attorney, or to designate an individual to receive tax information about this estate. Complete the appropriate section(s) below.
To authorize multiple individuals to act as POAs or disclosure designees, you must utilize forms IA2848, IA2848A, IA8821, and IA8821A.
POWER OF ATTORNEY AUTHORIZATION (POA)
Authorization is granted to the person listed below act as the estate’s representative before the Iowa Department of Revenue, to make written or oral presentation on behalf of the estate, and to receive confidential state tax information under Iowa Code section 450.68, including an inheritance tax clearance. This authorization is limited to those acts and information relevant to this return, and does not authorize the representative to receive federal tax information.
Name: ______________________________________________________
Phone:_________________________________________
SSN ☐/ ITIN ☐/ PTIN ☐/ IAN ☐: ________________________________
Email: _________________________________________
Mailing address: ______________________________________________
City:__________________ State: _______ ZIP:________
DESIGNATION FOR TAX DISCLOSURE (for individuals not authorized to act on behalf of the taxpayer)
This designation allows for the designee to receive the estate’s confidential state tax information in regard to this return. This designation does not authorize a designee to represent the estate or receive federal tax information.
COMPUTATION OF SHARES AND TAX ON NET ESTATE
1.
Total Value of Real Estate from Schedules A, E, and G
1.___________________
2.
Total Value of All Other Property reported on Schedules B, C, D, E, F, G, H, and I
2.___________________
3.
Total Gross Estate. Add lines 1 and 2. Must equal line 35, page 2
3.___________________
4.
Total Allowable Deductions from line 39, page 2
4.___________________
5.
Net Estate. Subtract line 4 from line 3
5.___________________
6.Computation of Shares and Tax (if there is more than one beneficiary, please fill out a Continuation schedule)
Name and Address of Beneficiary
Age
SSN
Relationship
Share
Inheritance Tax
7.
Total shares must equal net estate. Include any additional computation sheets
___________________
8.
Total Inheritance Tax
9.
Tax Previously Paid
10.
Tax due. If line 8 is greater than line 9, enter the difference
11.
Penalty. See instructions
12.
Interest
13.
Refund. If line 9 is greater than line 8, enter the difference
14.
Total due. Add lines 10, 11, and 12
60-008a (06/03/2022)
IA 706, page 2
15.
Marital status of decedent at death: Married ☐
Widow(er) ☐
Single ☐
Divorced ☐
The relationship of decedent’s children to surviving spouse must be included if decedent died intestate.
16.
Were any children born to or adopted by the decedent after execution of the last will?
Yes ☐
No ☐
In all cases of adoption, include a copy of the decree.
17.
Decedent’s occupation before death: __________________________________________________________________________
18.
Decedent died: Intestate (include heirship chart)
☐
Estate has trust (include trust agreement)
Testate (include copy of will)
19.
Election of spouse. Submit copy of election: Under will ☐
Distributive share ☐
20.
Was a disclaimer filed? If yes, submit copy of disclaimer
21.
Do you elect the special use valuation?
22.
Was a federal estate tax return filed? If yes, submit copy
23.
Do you elect to claim qualified terminal interest property (QTIP) under Iowa Code 450.3(7) and Internal Revenue
Code (IRC) section 2056(b)(7)(B)? If yes, include copy of Schedule M of federal estate tax return
.......................
24.
Do you elect to pay the federal estate tax in installments as described in IRC section 6166?
25.
Do you elect the alternate valuations under Iowa Code section 450.37 (IRC section 2032)?
Summary of Gross Estate
Alternate
Value at Date
Include applicable schedules only. Federal schedules may be used in place of Iowa schedules.
Value
of Death
26.
Real Estate, from Schedule A
27.
Stocks and Bonds, from Schedule B
28.
Mortgages, Notes, and Cash, from Schedule C
29.
....................Insurance on Decedent’s Life, from Schedule D. Include federal form(s) 712
30.
Jointly Owned Property, from Schedule E
31.
Other Miscellaneous Property, from Schedule F
32.
.........................................................Transfers During Decedent’s Life, from Schedule G.
33.
Powers of Appointment, from Schedule H
34.
.........................................Annuities, Section 529 plans, and ABLE plans from Schedule I
35.
. ................Total Gross Estate. Add lines 26 through 34. Enter here and on page 1, line 3
Summary of Deductions – Include Schedules J and K.
36.
Funeral and Administrative expenses, from Schedule J
36.___________________
37.
Debts of Decedent, from Schedule K, part I
37.___________________
38.
Iowa Mortgages and Liens, from Schedule K, part II
38.___________________
39.
Total Deductions. Add lines 36 through 38. Enter here and on page 1, line 4
39.___________________
For the Summary of Real and Personal Property Located Outside of Iowa not included in Lines 26-34, please complete the
Summary of Real and Personal Property Located Outside of Iowa Schedule 60-011.
40. Add all real and personal property items located outside of Iowa as listed on the Summary Statement
$___________________
I, the undersigned, declare under penalties of perjury or false certificate, that I have examined this return, and, to the best of my knowledge and belief, it is true, correct, and complete.
Signature: _________________________________ Capacity or Title: ____________________________________ Date:__________
Preparer’s signature: ________________________ PTIN: ______________________ Phone: ________________ Date:__________
Make checks payable to Iowa Department of Revenue. When you pay by check, you authorize the Department of Revenue to convert your check to a one-time electronic banking transaction.
Mail to: Fiduciary/Inheritance Section
Iowa Department of Revenue
PO Box 10467
Des Moines IA 50306-0467
60-008b (08/04/2021)
Filling out the IA 706 Iowa Inheritance Tax Return requires careful attention to detail and accuracy. This form is necessary for reporting the inheritance tax due on an estate, and ensuring that all the relevant information is correctly documented is crucial for compliance with Iowa tax laws. Follow these steps to accurately complete the form.
After submitting the IA 706 Iowa Inheritance Tax Return, it's vital to keep a copy for your records. This documentation serves as proof of compliance with the state’s inheritance tax reporting requirements. Detailed records ensure that the estate’s executor can adequately address any questions or concerns that may arise from the Iowa Department of Revenue regarding the submitted form.
What is the IA 706 Iowa Inheritance Tax Return form?
The IA 706 Iowa Inheritance Tax Return form is a document used by the executor of an estate to report inheritance tax to the Iowa Department of Revenue. It includes information about the decedent, their estate, and the beneficiaries. This form helps calculate the inheritance tax due based on the net estate value and the shares payable to each beneficiary.
Who needs to file the IA 706 form?
This form must be filed by the executor or administrator of an estate of a person who was a resident of Iowa at the time of death or owned real estate or tangible personal property located in Iowa.
When is the IA 706 form due?
The IA 706 form is typically due within nine months of the decedent's death. However, if an extension is needed, it's possible to request one by submitting a written request to the Iowa Department of Revenue before the due date.
What information do I need to complete the IA 706 form?
You will need detailed information about the decedent, including their name, Social Security Number, last address, and date of death. Information about the estate's executor, the value of real and personal property, allowable deductions, and beneficiary details are also required. Additionally, the form calls for specifics on whether the decedent died testate (with a will) or intestate (without a will), and any elections or claims made by the estate related to inheritance tax allowances under Iowa Code.
How do I calculate the shares and tax on the net estate?
The calculation involves subtracting allowable deductions from the total gross estate to determine the net estate. Then, you distribute this net estate among the beneficiaries according to their shares and calculate the inheritance tax due for each based on their relationship to the decedent and the value of their inheritance.
What if the decedent owned property outside of Iowa?
If the decedent owned real or personal property located outside of Iowa, you must list such property in the summary section of the IA 706 form designated for out-of-state property. This information is necessary for accurately determining the estate's total gross estate value.
What are the penalties for not filing or late filing of the IA 706 form?
Failing to file the IA 706 form timely or not paying the due tax can result in penalties and interest. The specific amount of the penalty is based on how late the form is filed and the amount of tax unpaid.
Can I submit the IA 706 form electronically?
Currently, the IA 706 form must be mailed to the Fiduciary/Inheritance Section of the Iowa Department of Revenue. Electronic filing is not available for this specific form.
Where do I mail the completed IA 706 form and payment?
The completed form and any payment due should be mailed to: Fiduciary/Inheritance Section Iowa Department of Revenue PO Box 10467 Des Moines, IA 50306-0467 Make sure to include a check payable to the Iowa Department of Revenue and consider using a method that provides tracking or delivery confirmation.
Filing the IA 706 Iowa Inheritance Tax Return requires attention to detail and precision. Common mistakes can lead to delays, inaccuracies, or even audits, complicating a process that is essential during a time of loss. Here are some key missteps people often make:
To mitigate these errors, it’s essential to review the form thoroughly before submission, double-checking all provided information and attached documents. Additionally, consulting with a professional who specializes in estate planning or tax law can provide invaluable guidance through this process.
When managing an estate in Iowa, particularly in the context of preparing and filing the IA 706 Iowa Inheritance Tax Return, it's vital to understand that this form doesn't stand alone. Instead, it's a part of a cluster of documents required for a thorough and compliant estate administration process. Each document plays a unique role in ensuring that the estate is managed and taxed correctly according to both state and federal laws. Understanding these ancillary documents can significantly streamline the process, making it less daunting for executors and beneficiaries alike.
Navigating through the preparation and submission of these documents can be complex. Yet, with a proper understanding and organization, executors can fulfill their duties with confidence, ensuring that the decedent's estate is settled in accordance with their wishes and in compliance with Iowa and federal regulations. Executors are encouraged to seek professional guidance when necessary to avoid potential pitfalls in estate administration and tax reporting.
The Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is quite similar to the IA 706 Iowa Inheritance Tax Return because both are used after someone's death to report the value of the estate and calculate the tax owed. The Form 706 is for federal estate taxes, while the IA 706 specifically addresses the state of Iowa's inheritance taxes. Both require detailed information about the decedent's assets, deductions, and beneficiaries, and they both determine the tax implications for the estate based on the values provided.
Form 1041, U.S. Income Tax Return for Estates and Trust, shares similarities with IA 706 in that it deals with the financial obligations of an estate or trust after someone has passed away. While IA 706 calculates inheritance taxes based on the value of the estate, Form 1041 focuses on the income that the estate generates after the decedent's death and before the estate is closed. This form accounts for deductions, income distributions to beneficiaries, and the estate's or trust's income tax liability.
Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, is used for reporting taxable gifts and is somewhat similar to the IA 706 form where it involves calculating transfer taxes. Just as IA 706 addresses the tax implications of transferring a deceased person's estate to heirs, Form 709 deals with the taxes on gifts that exceed the annual exclusion amount during the donor's lifetime. Both forms ensure proper reporting and taxation of wealth transfers, either at death or via gifts during life.
The State Inheritance Tax Waiver Form, found in some states, bears resemblance to IA 706 in its focus on inheritance and the legal processes post-death. These waiver forms are often required to release assets held by financial institutions to the heirs or beneficiaries. Although not every state requires such a waiver, in jurisdictions where it is necessary, it serves a role similar to IA 706 by involving the transfer of assets due to someone's death, but it specifically concerns the release of those assets rather than taxing them.
Form IT-Executor’s Commission, specific to some jurisdictions, is comparable to the IA 206 as it pertains to the expenses incurred by executors or administrators of an estate. While IA 706 encompasses the entire inheritance taxation process, the IT-Executor’s Commission form specifically calculates the compensation to which the estate's executor is entitled for their services. Both forms are integral to settling an estate, with one focusing on taxation and the other on compensating the management of the estate.
Schedule A, Real Property, which is often used as part of the probate process and can also be attached to tax returns, resonates with the real estate valuation aspect of IA 706. Both the schedule and IA 706 require detailed documentation of real property within the estate. Their purpose is to value the estate's assets accurately for different reasons—Schedule A for probate and potential tax calculations and IA 706 for inheritance tax calculations specific to Iowa.
Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer, parallels IA 706 in its connection to post-death financial affairs. Form 1310 is used to claim a refund on behalf of a deceased taxpayer, similar to how IA 706 accounts for taxes related to inheritance. Although the Form 1310 is more narrowly focused, both forms require information about the deceased and deal with financial considerations following someone's passing.
Schedule I, Gifts, Legacies, and Inheritances from the Form 1041 package, is closely related to IA 706 in its concern with inheritances. While IA 706 assesses the inheritance tax due to the state of Iowa, Schedule I gathers information on the distributions made to beneficiaries from an estate or trust, which can affect the income taxation of the entity. Both pieces of documentation are crucial for accurately reporting and managing the fiscal responsibilities that follow a person's death.
When navigating the process of filing the IA 706 Iowa Inheritance Tax Return, there are important steps to follow. To ensure accuracy and compliance, here are several key practices to adopt, as well as pitfalls to avoid:
By following these guidelines, the process of completing the IA 706 form can be seamless, providing peace ofimuth and compliance with the Iowa Department of Revenue’s requirements.
Understanding the Iowa Inheritance Tax Return (IA 706) can be challenging. There are several misconceptions regarding its preparation and submission. Here is a list of common misunderstandings, alongside explanations to clarify each point.
Only Iowa residents need to file IA 706: This is incorrect. If the decedent owned real estate or tangible personal property located in Iowa, the estate might need to file IA 706, regardless of the decedent's state of residence at the time of death.
All estates are subject to Iowa inheritance tax: Not all estates are liable for inheritance tax. The relationship of the beneficiary to the decedent can affect tax liability, with certain close relatives being exempt under Iowa law.
Executor’s personal details have no bearing on the form: The executor's Social Security Number and address are necessary for the Iowa Department of Revenue for identification and communication purposes.
Filing is the same as immediate payment: Filing IA 706 doesn’t mean the tax is paid immediately. The form allows for the computation of tax, after which payment arrangements can be made.
There’s no need to report out-of-state property: The estate must include a summary of real and personal property located outside of Iowa if such possessions contribute to the estate's gross value.
Inheritance tax and estate tax are the same: They are distinct taxes. The Iowa inheritance tax applies to the recipients of the estate, whereas the federal estate tax is levied on the estate's overall value before distribution.
Marital status of the decedent is irrelevant: The decedent's marital status can impact the inheritance tax, particularly regarding exemptions and rates available to surviving spouses.
Every inheritance is taxed: Certain inheritances, such as those received by the surviving spouse, may be exempt from Iowa inheritance tax depending on the decedent's relationship to the beneficiary.
Electing special valuations is always beneficial: Opting for special use valuations (like farm property assessed for agricultural value rather than market value) or alternate valuations can impact tax liability. However, it's necessary to evaluate if such elections are beneficial to the estate’s specific situation.
Correctly understanding and addressing these misconceptions is crucial for accurately completing and filing the IA 706 form. Misinterpretations can lead to errors that may result in unnecessary tax liabilities or penalties for the estate.
Filing the IA 706 Iowa Inheritance Tax Return is a critical process for executors and representatives of estates in Iowa. Here are key takeaways to consider when completing and submitting this form:
Understanding these points and diligently completing the IA 706 form will streamline the inheritance tax filing process in Iowa, ensuring compliance with state requirements while efficiently managing the decedent's estate.
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