FEDERAL ESTATE TAX RATES – OVERVIEW
The Economic Growth and Tax
Relief Act of 2001 was signed into law on
ESTATE TAX RATES – Table 1
|
FOR A TAXABLE ESTATE |
THE FEDERAL ESTATE TAX |
||
|
From |
To |
Is |
of Amount Over |
|
$0 |
$10,000 |
18% |
$0 |
|
10,001 |
20,000 |
1,800 + 20% |
10,000 |
|
20,001 |
40,000 |
3,800 + 22% |
20,000 |
|
40,001 |
60,000 |
8,200 + 24% |
40,000 |
|
60,001 |
80,000 |
13,000 + 26% |
60,000 |
|
80,001 |
100,000 |
18,200 + 28% |
80,000 |
|
100,001 |
150,000 |
23,800 + 30% |
100,000 |
|
150,001 |
250,000 |
38,800 + 32% |
150,000 |
|
250,001 |
500,000 |
70,800 + 34% |
250,000 |
|
500,001 |
750,000 |
155,800 + 37% |
500,000 |
|
750,001 |
1,000,000 |
248,300 + 39% |
750,000 |
|
1,000,001 |
1,250,000 |
345,800 + 41% |
1,000,000 |
|
1,250,001 |
1,500,000 |
448,300 + 43% |
1,250,000 |
|
1,500,001 |
2,000,000 |
555,800 + 45% |
1,500,000 |
|
2,000,001 |
& Up |
780,800 + 48% |
2,000,000 |
UNIFIED CREDIT – Table 2
|
If You Die During |
Top Estate Tax Rate |
Applicable Unified Credit |
Equivalent Exemption |
|
2003 |
49% |
345,800 |
1,000,000 |
|
2004 |
48% |
555,800 |
1,500,000 |
|
2005 |
47% |
555,800 |
1,500,000 |
|
2006 |
46% |
780,800 |
2,000,000 |
|
2007 |
45% |
780,800 |
2,000,000 |
|
2008 |
45% |
780,800 |
2,000,000 |
|
2009 |
45% |
1,455,800 |
3,500,000 |
|
2010 |
Repealed for 1 year |
Unlimited |
Unlimited |
|
2011 |
55% |
345,800 |
1,000,000 |
Federal estate taxes are
paid on assets that do not go to a surviving spouse or a trust
for a spouse’s benefit. To calculate,
ascertain total estate value and add lifetime taxable gifts (if any). This figure will be your total taxable
estate. Determine the federal estate tax
due from Table 1 and subtract the appropriate Unified Credit for the year of
death from the Table 2. This figure will
be your federal estate tax due.
EXAMPLES
For example, Wife dies in
2003 and has assets valued at $1,750,000.
Husband pre-deceased wife. The
federal estate tax calculation would be:
|
$1,750,000 |
Value of Estate Assets |
|
$668,300 |
Federal Estate Tax Due on
$1,750,000 ($555,800 + 45% of $250,000) |
|
- $345,800 |
Less Unified Credit |
|
$322,500 |
Federal Estate Tax Due |
If Wife died in 2004, the calculation
would look like this:
|
$1,750,000 |
Value of Estate Assets |
|
$668,300 |
Federal Estate Tax Due on
$1,750,000 ($555,800 + 45% of $250,000) |
|
- $555,800 |
Less Unified Credit |
|
$112,500 |
Federal Estate Tax Due |
Disclaimer: These examples are for illustrative purposes
only. Please contact a qualified tax
advisor for specifics on your individual circumstances.
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