When is an estate tax return Form 706 required

Quick answer: Most estates don't need to file a federal estate tax return (Form 706). It's only required if the total value of your dad's gross estate — plus certain lifetime gifts — exceeds a very high dollar threshold, or if his estate wants to elect "portability" for a surviving spouse.

When a return is actually required

For deaths in 2025, IRS Publication 559 explains: for estate tax purposes, the personal representative may be required to file Form 706. If death occurred in 2025, Form 706 must be filed if the gross estate of the decedent, plus any adjusted taxable gifts and specific gift tax exemption, is valued at more than $13,990,000.¹

That threshold is called the basic exclusion amount, and an estate tax return must be filed if the gross estate, plus any adjusted taxable gifts and specific gift tax exemption, is more than the basic exclusion amount. The basic exclusion amount is generally equal to the filing requirement. For 2025, the basic exclusion amount is $13,990,000.²

Given that number, the vast majority of estates fall well under it and owe no estate tax and have no filing requirement at all.

What counts toward the "gross estate"

If you're trying to figure out whether your dad's estate is anywhere near that threshold, the gross estate is broader than just probate assets: the gross estate includes the value of all property the decedent owns partially or in full at the time of death. Your gross estate also includes life insurance proceeds payable to the estate or, if the decedent owned the policy, to the decedent's heirs; the value of certain annuities payable to the estate or the decedent's heirs; and the value of certain property the decedent transferred within 3 years before death.³

One important exception: portability

Even if the estate is well under the threshold, a return might still be worthwhile (though not strictly "required" by size) if your mom survives and the family wants to preserve his unused exclusion for her later use: the federal estate tax return doesn't generally need to be filed unless the total value of lifetime transfers and the estate is worth more than the basic exclusion amount for the year of death. However, a complete and timely filed return is required if a deceased spouse's estate elects portability of any unused exclusion amount for use by the surviving spouse.⁴ This election, called DSUE (deceased spousal unused exclusion), lets a surviving spouse add the unused portion of your dad's exclusion to her own in the future — but the DSUE amount is the remaining applicable exclusion amount from the estate of a predeceased spouse who died after December 31, 2010, and it is only available where an election was made on the Form 706 filed by the deceased spouse's estate.⁵

What it depends on:

• The total fair market value of everything he owned (real estate, accounts, business interests, life insurance he owned, etc.)
• Whether he made large lifetime gifts that used up part of his exclusion
• Whether there's a surviving spouse who might want the portability election
• The filing deadline, if required, is within 9 months after the date of the decedent's death, with an extension available via Form 4768⁶

Given the size of most estates and the complexity of portability elections, it's worth having a CPA review the actual numbers and family situation before concluding whether a Form 706 is required or advisable.