Advance planning for surviving parent: Is Estate Tax form 706 needed if DSUE was previously elected?

What about if she gives some assets away before she passes? Would that reduce the gross estate value enough to avoid the filing requirement? And does the 706 have complicated valuation requirements or can a regular CPA handle it?

Giving assets away can potentially reduce the gross estate value, but those gifts may be subject to gift tax reporting requirements if they exceed the annual exclusion amount (currently $18,000 per recipient). Larger gifts would require filing Form 709 (Gift Tax Return) and would count against her lifetime exemption. Those taxable gifts would then be added back to the gross estate calculation for determining the 706 filing requirement. As for the complexity, I wouldn't recommend having just any CPA handle it. Form 706 can be quite complex depending on the assets involved. It requires specialized knowledge of estate tax laws, proper valuation methodologies, and understanding of available elections. I'd suggest working with an estate tax specialist who regularly prepares these returns. The penalties for incorrect valuations or missed elections can be substantial.

How accurate was it with complicated assets like partnership interests and life insurance policies? My parents have several rental properties held in an LLC plus some weird annuity products I barely understand. Would taxr.ai handle that level of complexity?

I'm skeptical about using automated tools for something this important. How does it compare to just hiring an experienced estate tax attorney from the beginning? Seems risky to trust software with potential tax liability of that magnitude.

For partnership interests and complex assets like LLCs holding rental properties, it actually exceeded my expectations. It flagged the partnership interests as needing special valuation and explained the factors that affect discounts for lack of marketability and minority interests. For life insurance policies, it's quite straightforward since it pulls the exact information you need to report. Regarding the skepticism, I completely understand the concern. We still had our estate attorney review everything before filing. The difference was that we spent about 8 hours organizing and inputting information ourselves rather than paying the attorney's firm to do 30+ hours of document gathering and basic preparation. The attorney was actually impressed with how organized everything was. In our case, it probably saved around $15,000 in legal fees while still having professional oversight for the final return.

Sounds too good to be true. How does this actually work? Does the IRS have some special line for these services that regular people don't have access to?

No way this is legit. I've been told repeatedly there's no way to avoid the IRS phone wait times. This sounds like paying someone to just call and wait on your behalf. What's the catch?

It's actually quite simple - they use technology to navigate the IRS phone system and hold your place in line. When they finally reach a representative, they call you back and connect you directly. There's no special line or preferential treatment. The IRS doesn't have a special line for them. They're essentially using technology to handle the most frustrating part (the endless waiting and disconnections). I was skeptical too, but when I received a call that an IRS estate tax specialist was on the line ready to talk, I became a believer. The agent answered all my specific questions about Form 706 and DSUE portability that I couldn't find clear answers to online.

That's a really good point I hadn't considered. So if I understand correctly, if Mom starts making larger gifts to the grandkids now, those gifts would first reduce the DSUE amount from Dad rather than her own exemption? Does this have any implications for our overall strategy?

Yes, that's exactly right. When your mother makes taxable gifts (over the annual exclusion amount), those gifts use up the DSUE first, before touching her own exemption. This actually creates a planning opportunity. This sequencing can be advantageous in some cases. If there's any concern about potential future reduction in the exemption amount, using the DSUE for lifetime gifts ensures you've maximized the use of that portable exemption. Your mother's own exemption would remain intact and available at death, even if legislation reduces the exemption amount in the future. Many estate planners are recommending this strategy given that the current higher exemption levels are scheduled to sunset after 2025.

We used both for my father's estate which included several paintings. Definitely get your own independent qualified appraiser first. The IRS Art Appraisal Services is not there to help you - they review submitted appraisals to see if they agree with the valuation. For items over $50k, it's worth having a qualified appraiser with experience in estate tax valuations.