Estate tax Flashcards
Definition: Gross Estate
The value of the gross estate of the decedent is the value at the time of death of all property, real or personal, tangible or intangible, wherever situated
Definition: Adjusted Gross Estate
Total Gross Estate-Administration and funeral expenses-Claims against the estate(debts)= Adjusted Gross Estate
Definition: Taxable Estate
Total Gross Estate-Administration and Funeral Expenses-Claims Against the Estate=Adjusted Gross Estate-Unlimited Marital Deduction-Unlimited Charitable Deduction=Tentative Taxable Estate-State death tax deduction=Taxable Estate
Definition: Tentative Tax
Total Gross Estate-Administration and Funeral Expenses-Claims Against the Estate=Adjusted Gross Estate-Unlimited Marital Deduction-Unlimited Charitable Deduction=Tentative Taxable Estate
Definition: Unified Credit
?
Definition: Applicable Credit Amount
?
Definition: Basic Exclusion Amount(BEA)*pig
$12,920,000.00. This is what an individual can pass gift/estate tax free.
Definition: Applicable Exclusion Amount
(BEA+DSUE=AEA). Applicable Exclusion Amount is the BEA plus any Deceased Spousal Unused Exclusion(DSUE), often referred to as “portability.”
Definition: Deceased Spousal Unused Exclusion
“Portability.” DSUE applies for GIFT and ESTATE, but not GSTT. Portability is elected by filing timely the estate tax return.
Basic Exclusion Amount for 2023
$12,920,000.00
Items Included in the Estate under the 3-year rule
-Transfers of retained life estate
-Transfers of revisionary interests
-Transfers of life insurance policies
-Gift taxes paid
Calculate Gross Estate
Real Estate+Stocks and Bonds+Mortgages, Notes, and Cash+Insurance on Decedent’s Life+Jointly Owner Property+Other Misc Property+Transfers During Decedent’s Life+Powers of Appointment+Annuities=TOTAL GROSS ESTATE
Calculate Tentative Taxable Estate
Total Gross Estate-Administration and Funeral Expenses-Claims Against the Estate (debts)=Adjusted Gross Estate-Marital Deduction-Charitable Deduction=TENTATIVE TAXABLE ESTATE
Issues for Transfers to a Non-Citizen Spouse
-Residency does not matter; only citizenship
-Marital deduction:
*Transfers to a non-citizen spouse do not qualify
*Transfers from a non-citizen spouse to a US citizen spouse qualify
-Annual exclusion is $175,000 for gifts made to a non-citizen spouse
-Applicable Exclusion Amount does apply at death
-Qualified Domestic Trust can delay tax
706 Estate Tax Return Filing Requirements
Must be filed:
-within 9 months of date of death
-if the value of the gross estate at the date of death, plus taxable gifts made after 1976, is more than the basic exclusion amount
