State Death Tax Deduction  

The Internal Revenue Service (IRS) estimates that less than 2 percent of estates are subjected to an estate tax every year. This is because a Unified Credit allows a threshold below which the estate is not liable for payment of tax.

In 2008, the amount was $2 million which increased to $3.5 million in 2009. In fact, death tax is not applicable if the entire estate is willed to a surviving spouse. Such a transfer is acceptable and the taxable value of the estate then becomes nil.

It is important to determine the value of the estate, which must include all assets of the deceased like bank accounts, life insurance annuities, real property, deferred pensions, stock holding or annuities. This will give the gross estate amount from which deductions can be taken. Deduct the Unified Credit from the gross estate amount which will give you the initial net estate value.

Determine the amounts spent on other deductible items like funeral costs paid from the estate (some people hold life insurance to accommodate this and this insurance is added to the estate value). Also any outstanding debts owed by the deceased which include mortgages, loans or car payments; fees paid to probate a will, any amount gifted to an authorized charity, any portion of the estate bequeathed to a surviving spouse and any death or estate tax paid to a state, territory or foreign nation.

The total of the above deductions are determined and deducted from the net value of the estate and that portion of the estate value is taxed for the year.

More Articles :




State Death Tax Deduction

Death-Benefit-Annuity-And-Taxes      Annuities are long term saving vehicles used for retirement. They are complex financial instruments often difficult to understand. There are 4 common types of annuity -- immediate, deferred, fixed and variable. All have relative advantages and disadvantages. More..




Home  • Bankruptcy Law   • Business Law  • Constitution Law • CopyRight Law   • Criminal LawEmployment Law   • Family Law   • Immigration Law   • Legal Dispute      • Malpractice   • Personal Injury   • Real Estate Law   • Tax Law   • Traffic Law   • Trust Law Legal News

State Death Tax Deduction )
Copyright © 2012, All Rights Reserved.