Adjusted Gross Estate
The adjusted gross estate is computed by taking the gross estate less all expenses (deductions) associated with the estate. Only the marital, state death tax and charitable deductions are not taken as expense deductions against the gross estate.
Deductions from the Adjusted Gross Estate
The marital, state death tax and charitable deductions are subtracted from the adjusted gross estate to determine the taxable estate.
"Unlimited Marital Deduction" if two conditions are met:
- Property passes directly to the surviving spouse
- Property was included in the decedent's gross estate
- Direct transfers to charities are 100% deductible from the adjusted gross estate for both estate and gift tax purposes.
As of 2014, there are 21 states (and Washington, D.C.) that impose either an estate or inheritance tax at the state level, and with several states hurting for revenue to meet their budgets, it's expected that more states could very well institute an estate or inheritance tax in the near future. Hawaii was the most recent state to adopt its own state estate tax in May 2010.
Adjusted Gross Estate
less Marital deduction
less Charitable deductions
less State death taxes
= Taxable Estate
Adjusted Taxable Gifts and Tax Calculations
TaxesInheritance taxes can be tricky. Most people have to deal with them at a very inconvenient time. It's better to learn the laws now so you're ready later.
Financial AdvisorInheritance is a double-edged sword, as leaving money can create estate tax burdens. Opting for a life insurance plan can help mitigate those burdens.
TaxesUnderstand the difference between the federal estate tax and state-specific estate taxes. Learn about some of the worst states with estate taxes.
TaxesEstate planning can be unpleasant, but in order to get the full benefit of what you've inherited, it’s important to be prepared for the related taxes.
TaxesReal estate industry executives are expressing fears over Trump carrying out radical tax reform.
RetirementWhen organizing your affairs, you'll need to be aware of tax rates and other regulations.
Financial AdvisorState and federal estate taxes may be levied upon death, but there's a difference between inheritance taxes and estate taxes. Here's what you need to know.
TaxesThe 2010 estate tax lapse could be costly to your family if it keeps you from planning.
RetirementEstate planning is an important and often neglected part of financial planning, which can be costly when avoided or done improperly.