Estate tax
Articles » Estate tax
The tax that is levied on your right to transfer property in the case of your death is known as Estate Tax. It covers everything you own and what you have interest in at the time of death. Irrespective of the price you bought those objects at, when they are evaluated, they are done so at the market price of the time.
The complete list of the estate is known as the ‘Gross Estate’. Once the Gross Estate is valued and the deductions and reductions like mortgages, charity amounts etc, are made, the figures arrived at are the ‘Taxable Estate’. Once the net amount is computed, the value of the taxable gifts is added and them the tax is computed. At present, only those amounts that exceed $1,000,000 have a tax levied upon them.
Estates like securities that have been publicly traded, cash, etc, are not required to be filed in the Estate Tax Return. A filing is required only if the taxable gifts exceed the amount of $1,500,000 in 2004 to $5,000,000 in 2010.
One of the most frequent questions asked when it comes to Estate Tax is regarding the consequences of not having everything ready before the due date. In such a case, an extension can be obtained from the date of the return.
Estate taxes are rather complicated business. But careful examination of the law and someone to guide you through the process is recommended so that it becomes easier for the parties involved.