Federal Estate Tax

Federal Estate Tax

A tax in the United States applied to the value of the estate of a deceased person after all debts of the deceased are paid. The federal estate tax has a large exemption; the amount varies, but is always more than $1 million. The federal estate tax derives fairly little income for the federal government, but it is used to prevent (or at least reduce) the proliferation of dynastic wealth. See also: Death Tax.
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They look at the federal estate tax from perspectives of the gross estate, deductions, computing tax liability, carryover basis rules applicable to some decedents dying in 2010, and limitation on stepped-up basis.
When Congress enacted the modern federal estate tax in 1916, (2) all but five states and the District of Columbia already had some sort of death transfer tax.
Estate tax In addition to increasing personal exemptions, Democrats will also push for a bill that some estimate will save the state $60 million in lost revenue from an increase in the assets exempt from the federal estate tax. Maryland has its own estate tax.
Under the new Tax Cuts and Jobs Act most taxpayers "will never pay a federal estate tax," however with the expanded exemption many reasons exist to engage in estate planning, according to a just-released analysis by Nixon Peabody.
Tom Hartshorne valued the real property for federal estate tax purposes at the appraised amount of $3 million instead of the written offer amount of $6.5 million.
The current federal estate tax exemption amount is $5,490,000 per person, or almost $11 million for a married couple.
If this election is made, the unused federal estate tax exclusion of the deceased spouse (called the deceased spouse unused exclusion, or DSUE) can be carried over to and used by the surviving spouse.
Marital deduction: The federal estate tax marital deduction is one of the most important estate planning tools available to a married couple.
Bob Latta, R-Ohio, has started the official fight in the 115th Congress to stamp out the federal estate tax by introducing H.R.
The key unknown is federal estate tax developments.
* WHAT CONGRESS DID: Fixed the federal estate tax exclusion at $5 million, indexed annually to inflation, putting the individual exclusion at $5.12 million for 2012 and $5.25 million for 2013 (double for married couples).
At this level it is estimated that only about 0.2% of all estates will owe federal estate tax (Harris, 2013).

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