For 2026, the federal estate tax filing threshold is $15 million for a U.S. citizen or resident who dies in 2026, calculated using the gross estate plus adjusted taxable gifts and any applicable specific exemption. A Form 706 may also be filed to elect portability, allowing a surviving spouse to potentially use a deceased spouse’s unused exclusion.

From AIM Financial — Serving Grand Rapids, Kentwood, Wyoming, and West Michigan

When a loved one passes away, managing their financial affairs can be challenging. Along with distributing assets, paying outstanding bills, and handling final income tax returns, an executor may need to determine whether a federal estate tax return is required.

IRS Form 706, officially titled United States Estate (and Generation-Skipping Transfer) Tax Return, is used to calculate federal estate tax and report certain transfers after death. Understanding the form can help executors and families identify filing requirements, organize financial records, and avoid missing important deadlines.

AIM Financial helps taxpayers understand tax preparation requirements and organize information for accurate filings. This guide explains IRS Form 706 in plain English, including who may need to file, what assets are considered, how portability works, and when the return is due.

What Is IRS Form 706?

Form 706 is a federal tax return used by an estate’s executor to calculate estate tax and report certain generation-skipping transfers.

An estate generally includes the assets and property interests considered part of a deceased person’s estate under federal tax law. Depending on the circumstances, these may include:

• Bank accounts and cash.
• Stocks, bonds, and investment accounts.
• Real estate and other property.
• Ownership interests in businesses.
• Certain life insurance proceeds.
• Certain jointly owned property and other includible assets.

The value of an estate for federal estate tax purposes is not necessarily the same as the amount eventually inherited by beneficiaries. Certain property may be included in the gross estate even if it passes outside a will, while allowable deductions may reduce the taxable estate.

Form 706 is different from the deceased person’s final individual income tax return, Form 1040. The final income tax return reports the individual’s income for the applicable tax period. Form 706 addresses estate tax and certain related transfer tax matters.

Official information is available on the IRS Form 706 page.

Who Must File Form 706?

For a U.S. citizen or resident who dies in 2026, an executor generally must file Form 706 if the gross estate, increased by adjusted taxable gifts and the applicable specific exemption, exceeds $15 million.

The threshold depends on the year of death. It should not be assumed that the limit for one year applies to someone who died in another year.

For example, if a person dies in 2026 with substantial real estate, investments, business interests, and prior taxable gifts, the executor must calculate the relevant amounts to determine whether the filing threshold is exceeded.

Even when an estate falls below the filing threshold, an executor may choose to file Form 706 for another important reason: portability.

Different rules apply to nonresident individuals who were not U.S. citizens, certain trusts, and specialized estate situations. These cases may require different forms or additional professional guidance.

What Is Portability, and Why Does It Matter?

Portability allows a surviving spouse to potentially use the deceased spouse’s unused federal estate tax exclusion. The unused amount is commonly called the deceased spousal unused exclusion (DSUE).

For example, a married couple may have substantial combined assets but still have an estate that does not exceed the applicable federal filing threshold when the first spouse dies. The surviving spouse may nevertheless benefit from preserving the deceased spouse’s unused exclusion for future transfers.

To elect portability, the executor generally must file a complete and timely Form 706, even if the estate otherwise would not be required to file based on its size.

The IRS provides a simplified procedure under which certain eligible estates may obtain additional time to make a portability election. Eligibility and filing conditions apply, so executors should not assume that a late return will automatically qualify.

Portability is an important reason to review estate tax filing requirements with a qualified professional rather than focusing only on whether estate tax is currently owed.

What Information Is Reported on Form 706?

Preparing Form 706 requires detailed information about the deceased person’s assets, debts, prior gifts, and potential deductions.

1. Estate assets and valuations

The executor identifies relevant property and determines its value under the applicable tax rules. Valuation may involve bank statements, brokerage statements, real estate appraisals, business valuations, and other documentation.

2. Prior taxable gifts

Certain gifts made during the person’s lifetime must be considered when determining whether a return is required and calculating the estate tax.

3. Allowable deductions

Depending on the circumstances, deductions may be available for qualifying debts, administrative expenses, charitable transfers, and transfers to a surviving spouse.

4. Tax calculations

The return calculates the taxable estate and applicable tax, taking into account available credits and other relevant rules.

5. Supporting schedules and documentation

Additional schedules may be required for real estate, stocks and bonds, business interests, jointly owned property, life insurance, deductions, and other assets or transactions.

Accurate records are essential. Incorrect asset valuations or incomplete information about ownership can affect the estate tax calculation.

When Is Form 706 Due?

Form 706 is generally due nine months after the date of death.

For example, if someone dies on January 10, 2026, the estate tax return is generally due October 10, 2026, subject to applicable deadline rules.

An executor who needs more time to prepare the return can generally request an automatic six-month extension to file by submitting Form 4768. However, an extension to file does not automatically extend the time to pay estate tax. Tax generally must be paid within nine months of death unless an extension of time to pay or another applicable payment arrangement is granted.

Because a portability election generally depends on timely filing, executors should not delay reviewing Form 706 requirements while waiting to determine whether estate tax will be owed.

Always verify the filing and payment requirements in the current IRS instructions.

Common Form 706 Mistakes to Avoid

Executors should take care to avoid these common problems:

• Assuming that an estate below the filing threshold never needs Form 706.
• Overlooking prior taxable gifts when calculating the filing threshold.
• Failing to identify property that must be included in the gross estate.
• Using unsupported or inaccurate asset valuations.
• Missing the nine-month filing deadline.
• Assuming an extension to file also extends the payment deadline.
• Overlooking a possible portability election for a surviving spouse.
• Confusing estate tax reporting with the deceased person’s final income tax return.

Complex estates involving businesses, trusts, real estate, international assets, or substantial lifetime gifts may require specialized tax and legal assistance.

Michigan Families and Estate Tax Preparation

Families in Grand Rapids, Kentwood, Wyoming, and throughout West Michigan should understand that federal estate tax requirements are separate from other estate administration responsibilities.

Even if federal estate tax is not owed, an executor may still need to file the deceased person’s final Form 1040, report income earned by the estate on Form 1041, address Michigan tax obligations, and coordinate the distribution of assets.

Michigan does not impose a separate state estate tax for deaths occurring in 2026, but other state and federal tax filing obligations may still apply.

Good recordkeeping can help the executor manage these responsibilities and provide beneficiaries with the documentation they need.

Get Tax Preparation Help From AIM Financial

Handling an estate’s tax responsibilities can be stressful, particularly when there are multiple beneficiaries, investments, business interests, or real estate holdings.

AIM Financial helps taxpayers organize financial records and prepare for tax filing. If you are an executor, personal representative, or family member in Grand Rapids, Kentwood, Wyoming, or elsewhere in West Michigan, contact AIM Financial to discuss your tax preparation needs.

Early planning can help identify missing documents, clarify filing obligations, and reduce last-minute pressure. For complicated estate tax calculations, portability elections, or estate administration questions, a qualified CPA, tax attorney, or enrolled agent with relevant experience may also be appropriate.

Contact AIM Financial for help organizing estate tax information and understanding the tax returns that may be required after a loved one’s passing.