This amount is $5 million in 2011 and in 2012 will be $5 million, indexed for inflation from 2010 based on the TRA relief. The exclusion had previously been called the “applicable exclusion amount.” In 2009, this amount was $3.5 million. In 2013, absent yet another change in the law, this amount will be $1…
In 2010 if the executor of an estate elects not to have the estate tax rules apply then carryover basis rules apply. Conceptually these rules require heirs, as a condition of avoiding any estate tax, to receive property with the same tax basis that their decedent had (e.g., what the decedent paid for a particular…
TRA created a new concept commonly referred to as portability that endeavors to simplify the estate tax system by avoiding the need for families to undertake complex planning to maximize the use of both spouses’ exclusions. Under prior law the couple might have divided assets 50/50 and had each will include a bypass trust to…
: Approximately 14 states have disconnected, or “decoupled” their state estate tax systems from the federal estate tax system. It is too early at this juncture to determine how states will react to the TRA and whether more states will decouple or whether states that have decoupled will abandon their estate tax systems. Decoupled states…
In 2010 and for many prior years the gift tax exclusion, the amount which could be gifted without triggering any gift tax (over and above the annual exclusion amount which is $13,000 in 2010, plus direct qualifying tuition and medical payments) was $1 million. It is $5 million in 2011 and $5 million, indexed for…
“Allocation of Increase in Basis for Property Acquired From a Decedent.” When finalized, Form 8939 will be required for the estates of those dying in 2010 who have opted to apply the carryover basis rules instead of the estate tax for 2010, and which have more than $1.3 million of non-cash assets at the date…
The estate tax “Basis Exclusion Amount” is to be indexed for inflation (from 2010) beginning in 2012. If the estate tax relief provisions are not extended, that will be the only year of increase since the law reverts to pre-2001 law after that point (i.e., in 2013). Be careful in that the unused exemption from…
On your death, if your previously deceased spouse had not used his or her estate tax exclusion you may, under the new portability concept, be permitted to take advantage of that unused exclusion. To assure that your estate will only benefit from one such prior unused exclusion, and to provide clarity as to which exclusion,…
A deduction is permitted in 2010 in the amount of state death taxes if the estate is subjected to estate tax (instead of the carryover basis rules) and in later years. This deduction had previously been available in 2005-2009, and is restored as part of the TRA.