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| We pride ourselves in great results for our clients. Because we are aggressive, experienced tax attorney, the IRS will work with us to settle your tax dispute. |
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| Year of Death |
Exempt Amount |
| 2001 |
$675,000 |
| 2002-03 |
$1 million |
| 2004-05 |
$1.5 million |
| 2006-08 |
$2 million |
| 2009 |
$3.5 million |
| 2010 |
No estate tax |
| 2011 |
$1 million unless Congress extends repeal |
Special rules apply to certain estates that contain family-owned businesses and farms, which may receive a special $1.3 million exclusion from estate tax. The rules for qualifying are complex; consult an estate planning specialist if you're interested. (This special exemption will become superfluous in 2004, when the individual exemption rises to $1.5 million.)
What are the rates for federal estate taxes?
The rates are steep, starting at 37%. The maximum is 55% for property worth over $3 million. The maximum rate is scheduled to decline gradually to 45% in 2009. There will be no estate tax in 2010, if the current tax law (passed in 2001) is not amended.
Are there ways to avoid federal estate taxes?
Yes, although there are fewer ways than many people think, or hope, there are. Here are some of the most popular:
- Tax-free gifts.You can give up to $10,000 per calendar year per recipient without paying gift tax. You can also pay someone's tuition or medical bills, or give to a charity, without paying gift tax on the amount. This reduces the size of your estate and the eventual estate tax bill.
- An AB trust. Spouses leave their property in trust for their children, but give the surviving spouse the right to use it for life. This keeps the second spouse's taxable estate half the size it would be if the property were left entirely to the spouse.
- A "QTIP" trust, which enables couples to postpone estate taxes until the second spouse dies.
Charitable trusts, which involve making a sizable gift to a tax-exempt charity.
- Life insurance trusts, which let you take the value of life insurance proceeds out of your estate.
Copyright © 2002 Nolo
DISCLAIMER: This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.
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The Tax Settlement Center is headquartered in Irvine, California. A majority of our clients reside in the Southern California areas of Irvine, Los Angeles, Riverside, San Bernardino, Long Beach, Torrance, Norwalk, San Diego, Oceanside, North San Diego County, Newport Beach, Laguna Beach, San Clemente, Santa Ana, Anaheim, Orange, Huntington Beach, Mission Viejo, Rancho Santa Margarita, Lake Forest, Foothill Ranch, Dana Point, San Juan Capistrano, Laguna Hills, Laguna Niguel, and all of Orange County. |
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Tax Settlement Center
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Call Us Today at 866.6NO.TAXES or 866.666.8293
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8001 Irvine Center Drive, Suite 1550, Irvine, CA 92618
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866.666.8293 |
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