That could be the reason the item was gifted in the first place. Sometimes it is prudent to file a gift-tax return if the item is not readily determinable such as an interest in a partnership. Tax Return, must be filed by the executor for the estate of every citizen or resident of the United States whose gross estate, including taxable gifts and specific exemption, exceeds the exemption amount. The unified tax rate schedule that applies to gifts also applies to a decedent's estate. With the enactment of the Taxpayer Relief Act, the estate and gift tax credit increased in phases.
Many states impose no death or estate tax.
Some states have an individual inheritance tax. Others may take only the amount of the credit that is computed on the federal estate tax return, Form 706. While still others may have some state tax due even if there is no federal tax liability. With proper tax guidance, maybe you won't either or, at least, the estate will pay a lower tax amount because of advance planning. Every day personal and family changes can make yesterday's well-devised estate plan wholly inadequate.