NJ Inheritance tax deductions for Expenses

 NJ Inheritance tax deductions for Expenses

 

INSTRUCTIONS FOR SCHEDULE “D”

FUNERAL EXPENSES:

Cemetery Plot (immediate family)

Funeral Luncheon

Flowers

Minister/Rabbi/Priest/Imam

Monument/Lettering

Funeral Costs

Acknowledgments

ADMINISTRATION EXPENSES:

Appraisal of real estate

Appraisal of personal effects

Surrogate’s fees

Probate expenses

Fee to notify creditors

Death certificates

Telephone tolls

Cost of Executor’s or Administrator’s Bond

Collection costs

Court costs

Cost on recovery and/or discovery of assets

Realty commissions in accordance with

N.J.A.C. 18:26-7.12

Storage of property if delivery

DEBTS OF DECEDENT OWING and

UNPAID AT TIME OF DEATH:

Personal accounts

Judgments

Federal income and gift taxes generally

Unpaid mortgage principal and interest on the decedent’s

date of death:

Charitable pledges

State, county and local taxes accrued before death

Unpaid Inheritance Tax on interrelated estate

 

INSTRUCTIONS FOR SCHEDULE “D”

If any notes, brokerage accounts or other claims are secured by collateral, describe the collateral pledged, with

its value as of the date of death of the decedent and state whether or not said collateral is included among the assets

disclosed in Schedule B or B(1). If collateral is not pledged, state after each loan “No collateral pledged”.

NOTE: No debt or claim is to be listed in this schedule unless still owing and unpaid at the time of death and unless

such debt or claim is to be paid out of the assets of the estate.

(EXAMPLE: That portion of medical bills paid or reimbursed by Medicare or other medical insurance

should not be claimed on this schedule).

Contested claims must be explained in detail. Do not list any taxes, either real, personal or income, chargeable

for any period subsequent to date of death; nor any claim against property located outside of New Jersey, unless such

property is subject to tax in this state.

The estate agrees to advise the Division if the amount actually paid in settlement of any fee, commission or debt

is greater or less than the estimated amount allowed and further agrees to the correction of the assessment, if

necessary.

For mortgages list the balance on the decedent's date of death and the property in Schedule A on which the

mortgage is an encumbrance. Each mortgage must be listed separately. State whether there was any mortgage

insurance and, if so, submit verification as to the amount of same. Note: In the case of realty held by a decedent

and a surviving spouse/civil union partner as tenants by the entirety, the amount of any mortgage owing on such

realty at the decedent’s death is not allowable as a deduction since such property is exempt from the Inheritance Tax.

 

Examples of Non-Allowable Deductions

 

Contingent liabilities

Debts paid by insurance

Medical expenses paid prior to death

Liabilities of corporation of which decedent was a

shareholder

Real estate and property maintenance costs

Storage expense

 

State, county and local taxes accruing after date of death

Transfer Inheritance Tax

Real estate brokers commissions, except if real property sold

during administration of estate

Debts on property located outside of New Jersey

Federal Estate Tax

 

Interest accrues at the rate of 10% per annum on any direct

tax or portion thereof not paid within eight months of the

decedent’s death.

Inheritance Tax is due & must be paid within 8 months of death

 Inheritance Tax is due & must be paid within 8 months of death

When to File

The executor, administrator, or heir-at-law of the estate must file an Inheritance Tax return (if required) within eight (8) months of the date of the decedent’s death. If tax is due, the tax also must be paid on the transfer of taxable real or personal property within eight (8) months of the date of the decedent’s death.

We recommend paying slightly more than tax due. Trenton will send you a refund. You don’t want to get hit with a penalty if additional tax is owed.

 

Interest after 8 months
        Interest is calculated at the annual rate of 10% on any direct tax or portion not paid within eight (8) months of the date of the decedent’s death. To make a payment and avoid potential interest, please see How To Pay.

 

Extension to File
         There is no extension of time to pay tax due. Interest charges still apply to any unpaid tax. An extension of time is given only to file the return. If you cannot file the return on time, you may complete Form IT-EXT,  Inheritance and Estate Tax Application for Extension of Time to File a Return. 

 

Resident Decedents - What to File


You must file a paper return or form(s) to determine whether any tax is due or when a waiver is needed.

Note: Electronic filing is not available for Inheritance and Estate Tax returns.

Online:

 

If you pay by electronic check (e-check) or credit card (Visa, American Express, MasterCard, or Discover), do not send in the payment voucher. A usage fee will be added to the total tax payment when paying by credit card. 

By Phone:

Call the NJ Inheritance and Estate Tax office at 609-292-5033.

By Check or Money Order:

How to Make a Payment When Filing a Return(s)

Payment vouchers are included with the Inheritance and Estate Tax returns (see charts below). Mail the voucher with your check or money order in the same envelope as the return.

To avoid processing delays, use separate checks and vouchers when filing returns for both taxes.