Does the estate need to file an estate tax return in 2026?

The 2026 number is $15 million

The IRS says the basic exclusion amount is $15,000,000 for people who die in calendar year 2026. For 2025 deaths, it was $13,990,000.

The IRS describes the 2026 increase as coming from the law it calls the Working Families Tax Cuts, signed on July 4, 2025 as Public Law 119-21.

The Form 706 instructions say the executor of every U.S. citizen or resident must file when the gross estate, plus adjusted taxable gifts and any specific exemption, is more than the filing threshold for the year of death. For 2026, that threshold is $15,000,000.

For most families, that is a very big number. A typical home, a retirement account and a car that smells like the dog do not get close. But "no tax due" and "no return needed" are not always the same thing, and the house is still the asset everyone argues about.

This is general information. Tax treatment depends on the facts, so confirm with a CPA or tax attorney.

Why some estates file even when they owe nothing

The big reason is portability. When a married person dies, the surviving spouse can keep the deceased spouse's unused exclusion amount, called DSUE. That can matter a lot later, when the second spouse dies.

The catch is in the instructions: the executor can elect to transfer the DSUE amount to the surviving spouse only if Form 706 is filed timely. An executor who elects portability must file, regardless of the size of the estate.

There is some relief. Under Rev. Proc. 2022-32, the Form 706 instructions say an executor who was not otherwise required to file can file to elect portability as late as the fifth anniversary of the death. The instructions also require specific wording at the top of that return, so this is a job for your CPA, not a weekend project.

Skipping the portability return to save a few dollars now is a little like throwing away a gift card because you are not hungry today.

The deadlines

• Form 706 due date: within 9 months after the date of death.
• Extension: Form 4768 requests an automatic 6-month extension of time to file.
• Portability relief: under Rev. Proc. 2022-32, an estate that was not otherwise required to file can file to elect portability on or before the fifth anniversary of the death.
• Form 8971: certain estates that file Form 706 must report each asset's estate tax value to the IRS and to the people receiving it within 30 days of the 706 due date, including extensions.

Nine months sounds like plenty of time. It is not. Somewhere between finding the will, closing accounts and deciding who gets the china, the calendar has a way of eating itself.

Where the appraisal comes in

Whether you file or not, the value of the house as of the date of death matters.

If you file Form 706, the instructions call for the date-of-death value of each asset, and the alternate value if the executor elects alternate valuation. A supported appraisal is how you get a real estate number you can defend.

If you do not file, the value still matters for income tax. Under Internal Revenue Code section 1014, inherited property generally takes a basis equal to its fair market value at the date of death. When the heirs sell, that basis is what their gain is measured from.

And if a return is filed and the house increased the estate tax, section 1014(f) says the heirs' basis cannot be more than the value finally set for estate tax purposes. The appraisal on day one becomes the ceiling for years.

That is why I value estate property as of the date of death, in its condition that day, using sales from that market. Not a Zestimate, not the listing price the family hopes for, and not the sale price a year later after a new kitchen went in.

What to do as an executor

1. Add up the gross estate early. List the house, the accounts and everything else, plus adjusted taxable gifts. Your CPA will know what counts toward the gross estate.
2. Compare it to the year-of-death threshold. $15,000,000 for 2026 deaths, $13,990,000 for 2025 deaths.
3. If there is a surviving spouse, ask about portability even when no tax is due.
4. Order a date-of-death appraisal for real estate. Ask whether your CPA also wants a value as of six months after death for the alternate valuation date.
5. Calendar the 9-month due date and decide early whether you need the Form 4768 extension.
6. Do not renovate before the appraiser documents the house. Or at least take thorough photos first.

What I see in the field

Estate work is a big part of my practice, and the most common mistake I see is treating the house as an afterthought because no estate tax is due. Then the house sells, the CPA needs a basis, and the family is trying to remember what the place looked like before the remodel.

A good date-of-death report does more than state a number. It shows the sales from that time, explains the condition, and lays out why the value is what it is. If anyone questions the basis later, that paper trail is the thing that holds up. Facts over feelings, and facts on the right date.

If the estate may owe tax, I also ask early whether the CPA wants a value six months after death. Getting both dates in one assignment is far easier than coming back for the second one later.