This post was written by LeRoy Metz.
In a recent case, the U. S. District Court in South Dakota confirmed that tax is as certain as death. In this case, the heirs neglected to file a timely federal estate tax return. When the return was eventually filed, seven years after its due date, it showed that federal estate tax was owed. The heirs offered various defenses, but the short version is that when a beneficiary inherits or otherwise receives property that was included in a federal taxable estate, that beneficiary is responsible to pay the federal estate tax to the extent of the value of the property received.
Interestingly, the great delay in filing the estate tax return caused interest and penalties to exceed the original amount of the estate tax. Those additions to tax also had to be paid by the heirs.
Death AND TAXES are certain after all.