How to File Estate Taxes: Form 706, Deadlines, and Extensions

To file estate taxes on Form 706, the executor values everything the decedent owned at death, completes the schedules that apply to those assets and any deductions, and mails the return with payment to the IRS in Kansas City within nine months of the date of death. For 2026 deaths, a return is required when the gross estate plus lifetime taxable gifts exceeds $15 million.¹ Smaller estates sometimes file anyway to lock in the portability election for a surviving spouse.

When Form 706 Is Required

The executor must file when the gross estate exceeds the basic exclusion amount for the year of death. The 2026 exclusion is $15 million per individual, indexed for inflation going forward, after the One, Big, Beautiful Bill amended the amount effective January 1, 2026.¹ The gross estate is the fair market value of everything the decedent owned or had an interest in: bank accounts, real estate, investments, retirement accounts, and life insurance proceeds.

The threshold is not measured against assets alone. It is reduced by any adjusted taxable gifts made after 1976 and by any gift tax specific exemption claimed before that provision was repealed.² A person who gave away $3 million during life and died with a $13 million estate has a combined $16 million, which crosses the line.

Filing to Preserve Portability

Portability lets a surviving spouse claim the deceased spouse’s unused exclusion, potentially shielding up to $30 million from estate tax for a married couple. The benefit is not automatic. The executor has to file Form 706 and make the portability election on the return, even when the estate owes no tax.³ Once made, the election is irrevocable, and it cannot be made if the return is filed after the deadline including extensions. Families with moderate estates most often go wrong here: skipping the filing because no tax is due and losing millions in future exclusion.

Non-Resident Non-Citizens

Different rules apply if the decedent was not a U.S. citizen or resident. A filing is required when U.S.-situated assets exceed just $60,000, a threshold that is not adjusted for inflation, and the return is Form 706-NA rather than the standard Form 706.⁴

Gathering Documents and Appraisals

Before opening the form, assemble a paper trail. Start with a certified copy of the death certificate. Then pull brokerage statements, bank records, deeds, mortgage documents, business ownership agreements, and life insurance policies. Records of every taxable gift the decedent made during life are also needed to calculate how much of the unified credit has already been used.

Valuations generally use the date of death. An executor may elect an alternate valuation date exactly six months after death, but only if doing so decreases both the gross estate value and the total estate and generation-skipping transfer tax.⁵ Assets sold or distributed within those six months are valued as of the date of sale or distribution.

Formal Appraisals

Real estate and closely held business interests require professional appraisals reflecting market conditions at the date of death. For personal property such as jewelry, artwork, antiques, and collectibles, the IRS mandates a sworn expert appraisal whenever items with artistic or intrinsic value total more than $3,000.⁶ The appraisal must be accompanied by a written statement from the executor, made under penalty of perjury, confirming the completeness of the inventory and the qualifications of the appraiser. Paintings need to be described by size, subject, and artist name; silverware must be weighed in troy ounces. Anyone who has been barred from practicing before the IRS in the prior three years is disqualified as an appraiser.⁷

Working Through the Form

Form 706 is the United States Estate (and Generation-Skipping Transfer) Tax Return.⁸ The form and its 40-plus pages of instructions are on the IRS website. The opening sections collect identifying information about the decedent and beneficiaries. Asset reporting is then organized into lettered schedules, each covering a category of property.

Schedule A: real estate the decedent owned or had contracted to purchase.
Schedule B: stocks and bonds in the gross estate.
Schedule C: mortgages, notes, and cash holdings.
Schedule D: life insurance on the decedent’s life, whether or not included in the gross estate.
Schedule E: jointly owned property, including joint tenancies and tenancies by the entirety.
Schedule F: everything else not reportable on another schedule, including business interests, debts owed to the decedent, and tangible personal property.

Each schedule needs its supporting documentation attached: account statements, appraisal reports, insurance policy details.⁹ Schedule F is mandatory for every filer and must be completed even if nothing is reported on it.

Deduction Schedules

Deductions can drastically reduce the taxable estate, and two of them carry no dollar cap. Property passing to a surviving spouse qualifies for the marital deduction on Schedule M, and transfers to qualifying charities go on Schedule O.⁸ A decedent who leaves everything to a spouse or charity can eliminate the estate tax entirely.

Practical costs of death and administration are also deductible. Schedule J covers funeral expenses and expenses incurred in administering property subject to claims, including executor fees, attorney fees, and accounting costs.⁹ Schedule K captures debts the decedent owed at death, along with mortgages and liens against estate property. These deductions are easy to overlook when the focus is on the asset schedules, but they can shave hundreds of thousands off the taxable amount.

Generation-Skipping Transfers

Form 706 also handles the generation-skipping transfer (GST) tax, which applies when assets pass to someone two or more generations below the decedent, such as grandchildren. It is calculated at a flat 40% on transfers exceeding the GST exemption, which for 2026 is $15 million per individual.¹ Direct skips, where the estate passes directly to a grandchild, are reported on Schedule R.

Deadline, Where to File, and Payment

Form 706 must be filed, and any tax owed must be paid, within nine months of the decedent’s date of death.⁹ A March 15 death means a December 15 deadline. There is no connection to the April income tax calendar.

Mail the completed return to:

Department of the Treasury
Internal Revenue Service
Kansas City, MO 64999

Private delivery services such as FedEx or UPS should send to the Internal Revenue Submission Processing Center, 333 W. Pershing Road, Kansas City, MO 64108. Payment can be made electronically through the Electronic Federal Tax Payment System (EFTPS) or by check payable to “United States Treasury” with the decedent’s Social Security number written on it.

Six-Month Filing Extension

When the estate is too complex to close in nine months, the executor can request an automatic six-month extension by filing Form 4768 before the original deadline, pushing the filing date to 15 months after death.¹⁰ The extension to file does not extend the time to pay. The tax is still due at nine months, so submit an estimated payment with Form 4768 to head off penalties and interest.

Hardship and Installment Payment Options

If the estate has assets but not enough liquid cash, the IRS can grant an extension of time to pay for reasonable cause. The Secretary may extend payment of the original tax by up to 10 years, and payment of a deficiency by up to four years. These extensions are unavailable if a deficiency results from negligence, intentional disregard of the rules, or fraud.¹¹

Estates where a closely held business makes up more than 35% of the adjusted gross estate can elect to pay the attributable estate tax in installments. The executor can defer the first installment up to five years after the normal due date, then spread the remaining balance over up to 10 annual payments.¹² Only the portion of the tax attributable to the business interest qualifies; the rest is due on the normal schedule. The election has to be made on a timely filed Form 706, so missing the filing deadline (even with an extension) forfeits it.

Penalties and Interest for Missing the Deadline

Missing the deadline triggers two separate penalties that stack. The failure-to-file penalty is 5% of the unpaid tax for each month or partial month the return is late, capping at 25%.¹³ The failure-to-pay penalty is a separate 0.5% per month on the unpaid balance, also capped at 25%. That 0.5% rate rises to 1% if tax remains unpaid 10 days after the IRS issues a notice of intent to levy.

On top of both penalties, the IRS charges interest on the unpaid amount. The underpayment rate for individuals is 7% per year in early 2026, compounded daily.¹⁴ Executors who need more time should always send an estimated payment with Form 4768 to keep these charges from compounding.

After Filing: Basis Reporting and the Closing Letter

After Form 706 goes in, the executor has a separate obligation to report the estate tax values of inherited property to both the IRS and the beneficiaries on Form 8971. A Schedule A is prepared for each beneficiary listing the property they received and its final estate tax value.¹⁵ Beneficiaries then use those values as their cost basis when they eventually sell.

The deadline is tight. Form 8971 must be filed no later than 30 days after Form 706 is due (including extensions) or 30 days after the return is actually filed, whichever comes first.¹⁶ Those reported values lock in, so accurate appraisals at the Form 706 stage carry through to what beneficiaries pay in capital gains later.

Estate Tax Closing Letter

An estate tax closing letter confirms that the IRS has accepted the return and that federal estate tax obligations are satisfied. Many probate courts and financial institutions require it before releasing assets. Since October 2021, executors must request the letter through Pay.gov by searching for “Estate Tax Closing Letter User Fee” and paying a $56 fee.¹⁷

Wait to submit the request until the IRS has had time to process the return. If the letter has not arrived after nine months from filing plus another 120 days from the request, the estate tax helpline is 866-699-4083. Authorized practitioners can also pull an account transcript through the IRS Transcript Delivery Service, and executors can request a hardcopy transcript using Form 4506-T. Many practitioners rely on the transcript to keep the estate moving while the formal closing letter is still in process.¹⁷

State Estate Taxes

Federal filing is only part of the picture. Roughly a dozen states and the District of Columbia impose their own estate taxes with exemption thresholds far below $15 million, some as low as $1 million. An estate that owes nothing federally can still face a sizable state bill. Rates, exemptions, and portability rules vary, so check requirements in the state where the decedent was domiciled and in any state where the estate holds real property.

1
Internal Revenue Service. What’s New – Estate and Gift Tax
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Office of the Law Revision Counsel. 26 U.S. Code 6018 – Estate Tax Returns
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Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax
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Internal Revenue Service. Estate Tax for Nonresidents Not Citizens of the United States
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Office of the Law Revision Counsel. 26 USC 2032 – Alternate Valuation
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eCFR. 26 CFR 20.2031-6 – Valuation of Household and Personal Effects
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eCFR. 26 CFR 1.170A-17 – Qualified Appraisal and Qualified Appraiser
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Internal Revenue Service. About Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return
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Internal Revenue Service. Instructions for Form 706 (09/2025) – United States Estate (and Generation-Skipping Transfer) Tax Return
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Internal Revenue Service. Instructions for Form 4768 (Rev. February 2020)
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Office of the Law Revision Counsel. 26 USC 6161 – Extension of Time for Paying Tax
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Office of the Law Revision Counsel. 26 U.S. Code 6166 – Extension of Time for Payment of Estate Tax Where Estate Consists Largely of Interest in Closely Held Business
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Internal Revenue Service. Topic No. 653, IRS Notices and Bills, Penalties and Interest Charges
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Internal Revenue Service. Interest Rates Remain the Same for the First Quarter of 2026
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Internal Revenue Service. About Form 8971, Information Regarding Beneficiaries Acquiring Property from a Decedent
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Internal Revenue Service. Instructions for Form 8971 and Schedule A
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Internal Revenue Service. Frequently Asked Questions on the Estate Tax Closing Letter