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Federal Estate Tax
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Definition
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Tax imposed on the transfer of property at death. This tax is computed on the
value of each property in the estate at date of death, or an alternate date six
months after death.
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When Does It Apply?
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Estate tax applies when the taxable estate's value exceeds dollar limits, in
excess of the applicable credit available in the year of death.
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How Does It Operate?
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Assets in which the deceased had an interest are included in the gross estate.
Certain deductions are applied, and the tax computed on the balance.
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Advantages/Disadvantages
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Advantages - none.
Disadvantages - to extent this tax cannot be avoided, assets left to the
heirs will be reduced.
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Estate/Gift Tax Implications
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Not apply.
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Income Tax Implications
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Not apply.
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Other Considerations
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This tax can be substantially reduced using appropriate estate planning
techniques. Assistance of an attorney and other tax advisors is required.
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