Tax Liability
The American Taxpayer Relief Act of 2013 solidified the federal estate tax for the foreseeable future and adopted tax rates that are higher than those that were previously in effect. The maximum rate is now 40% and $5,340,000 of transfers are exempt from tax. In addition, any portion of the $5,340,000 exemption unused by the estate of a first-to-die spouse may be used as an additional exempt amount by the surviving spouse for both gift and estate tax purposes if a proper election is made.

The donor is responsible for paying the gift tax. If a trust or estate makes the gift, the individual beneficiaries are considered the donors. If the donor does not pay, the recipient has to pay the tax.

Taxable Gift or Estate Tax Tentative Tax
From To Tax Rate on Excess
$0 $10,000 $0 18%
10,000 20,000 1,800 20%
20,000 40,000 3,800 22%
40,000 60,000 8,200 24%
60,000 80,000 13,000 26%
80,000 100,000 18,200 28%
100,000 150,000 23,800 30%
150,000 250,000 38,800 32%
250,000 500,000 70,800 34%
500,000 ….. 155,800 35%

 



Sample Questions 1 - 5

Related Articles
  1. Retirement

    Estate Planning Law Changes You Need To Know

    When organizing your affairs, you'll need to be aware of tax rates and other regulations.
  2. Taxes

    8 States With Estate Taxes

    Understand the difference between the federal estate tax and state-specific estate taxes. Learn about some of the worst states with estate taxes.
  3. Financial Advisor

    5 Top Tax Concerns Clients Face

    Clients of advisors may have more tax issues as their financial plans become more complicated.
  4. Taxes

    Planning For The Estate Tax's Return

    The 2010 estate tax lapse could be costly to your family if it keeps you from planning.
  5. Taxes

    Estate Taxes: Who's on the Hook?

    Inheritance 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.
  6. Taxes

    Get Ready For The Estate Tax Phase-Out

    Changes to federal legislation will affect how your assets are treated once you're gone - be prepared.
  7. Taxes

    10 Sources of Nontaxable Income

    Taxes are often a deterrent from investing and saving. These financial practices will bring you no tax grief.
  8. Financial Advisor

    Why It's So Important to Update Your Estate Plan

    As rules and exemptions tied to the estate tax change, so should your estate plan. Here's why updating it is so important.
  9. Financial Advisor

    States With the Highest Inheritance/Estate Taxes

    State 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.
Frequently Asked Questions
  1. What is the difference between Communism and Socialism?

    Learn how some countries are incorporating socialist methods into capitalism.
  2. What's the difference between a stop and a limit order?

    A limit order is an order that sets the maximum or minimum at which you are willing to buy or sell a particular stock. With ...
  3. What is the formula for calculating earnings per share (EPS)?

    Learn why earnings per share (EPS) is often considered to be one of the most important variables in determining a stock’s ...
  4. What is the formula for calculating internal rate of return (IRR) in Excel?

    Understand how to calculate the internal rate of return (IRR) using Excel and how this metric is used to determine anticipated ...
Trading Center