The estate tax on
estates of decedents is imposed on the decedent's taxable estate
(gross estate less deductions). A credit (based on the
Applicable Exclusion Amount) against estate tax is allowed, as well
as other credits.
The gift tax is imposed on transfers of property by gift. The gift
tax is based on the cumulative value of current and prior taxable
gifts. A credit
(based on the
Applicable Exclusion Amount)
against gift tax is allowed.
After the Applicable
Exclusion Amount is applied to estates in 2025, the
marginal tax rate is 40% as shown in the tables below. The
Applicable Exclusion Amount is the sum of the Basic Exclusion Amount
plus the deceased spousal unused exclusion amount (DSUE). The Basic
Exclusion Amount for 2025 is $13,990,000
Beginning in 2011, a
deceased spouse's unused exclusion amount (known as the DSUE) may be transferred to a surviving
spouse by filing an estate tax return and making an election.
|
Year |
Estate Tax Exemption
Equivalent (now known as Basic Exclusion Amount) |
Estate Tax
Credit (applicable credit amount) |
Gift Tax
Baisc Exclusion Amount |
Maximum Gift
and Estate Tax Rate |
Top Marginal Rate Begins
at (in millions) |
|
1977 |
$120,667 |
$30,000 |
$120,667 |
70% |
5.0 |
|
1978 |
134,000 |
34,000 |
134,000 |
70% |
5.0 |
|
1979 |
147,333 |
38,000 |
147,333 |
70% |
5.0 |
|
1980 |
161,563 |
42,500 |
161,563 |
70% |
5.0 |
|
1981 |
175,625 |
47,000 |
175,625 |
70% |
5.0 |
|
1982 |
225,000 |
62,800 |
225,000 |
65% |
4.0 |
|
1983 |
275,000 |
79,300 |
275,000 |
60% |
3.5 |
|
1984 |
325,000 |
96,300 |
325,000 |
55% |
3.0 |
|
1985 |
400,000 |
121,800 |
400,000 |
55% |
3.0 |
|
1986 |
500,000 |
155,800 |
500,000 |
55% |
3.0 |
|
1987-1997 |
600,000 |
192,800 |
600,000 |
55%* |
3.0 |
|
1998 |
625,000 |
202,050 |
625,000 |
55% |
3.0 |
|
1999 |
650,000 |
211,300 |
650,000 |
55% |
3.0 |
|
2000 |
675,000 |
220,550 |
675,000 |
55% |
3.0 |
|
2001 |
675,000 |
229,550 |
675,000 |
55% |
3.0 |
|
2002 |
1,000,000 |
345,800 |
1,000,000 |
50% |
2.5 |
|
2003 |
1,000,000 |
345,800 |
1,000,000 |
49% |
2.0 |
|
2004 |
1,500,000 |
555,800 |
1,000,000 |
48% |
2.0 |
|
2005 |
1,500,000 |
555,800 |
1,000,000 |
47% |
2.0 |
|
2006 |
2,000,000 |
780,800 |
1,000,000 |
46% |
2.0 |
|
2007 |
2,000,000 |
780,800 |
1,000,000 |
45% |
1.5 |
|
2008 |
2,000,000 |
780,800 |
1,000,000 |
45% |
1.5 |
|
2009 |
3,500,000 |
1,455,800 |
1,000,000 |
45% |
1.5 |
|
2010
(opt out of
2010 act - apply 2001 act) |
N/A/(Taxes Repealed) |
N/A/(Taxes Repealed)
|
1,000,000 |
Top
individual income tax rate (Gift tax only) |
N/A |
|
2010
(apply 2010
Act) |
5,000,000 |
1,730,800 |
1,000,000 |
35% |
0.5 |
|
2011 |
5,000,000 |
1,730,800 |
5,000,000 |
35% |
0.5 |
|
2012 |
5,120,000 |
1,772,800 |
5,120,000 |
35% |
0.5 |
|
2013 |
5,250,000 |
2,045,800 |
5,250,000 |
40% |
1.0 |
|
2014 |
5,340,000 |
2,081,800 |
5,340,000 |
40% |
1.0 |
|
2015 |
5,430,000 |
2,117,800 |
5,430,000 |
40% |
1.0 |
|
2016 |
5,450,000 |
2,125,800 |
5,450,000 |
40% |
1.0 |
|
2017 |
5,490,000 |
2,141,800 |
5,490,000 |
40% |
1.0 |
|
2018 |
11,180,000 |
4,417,800 |
11,180,000 |
40% |
1.0 |
|
2019 |
11,400,000 |
4,505,800 |
11,400,000 |
40% |
1.0 |
|
2020 |
11,580,000 |
4,577,800 |
11,580,000 |
40% |
1.0 |
|
2021 |
11,700,000 |
4,625,800 |
11,700,000 |
40% |
1.0 |
|
2022 |
12,060,000 |
4,769,800 |
12,060,000 |
40% |
1.0 |
|
2023 |
12,920,000 |
5,113,800 |
12,920,000 |
40% |
1.0 |
|
2024 |
13,610,000 |
5,389,000 |
13,610,000 |
40% |
1.0 |
|
2025 |
13,990,000 |
5,541,000 |
13,990,000 |
40% |
1.0 |
* Between 1987 and
1997 there was a 5% surtax (in addition to the 55% marginal rate)
between $10,000,000 and $21,040,000. This phased out the
graduated rates to make the tax a flat 55% for estates above
$21,040,000.
Beginning in 2012 the Estate
and Gift Applicable Exclusion Amounts are adjusted for inflation
to the nearest $10,000 increment using 2010 as the base year. Click
on the years above for a copy of the Revenue Procedure or other
reference setting forth
annual inflation adjustments.
|
(A) |
(B) |
(C) |
(D) |
|
Amount
subject to tentative tax... |
Tax on
amount in column A***
|
Tax rate on
excess over amounts in Column A***
|
|
exceeding |
but not
exceeding
|
|
|
|
$--- |
$10,000 |
$--- |
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 |
750,000 |
155,800 |
37% |
|
750,000 |
1,000,000 |
248,300 |
39% |
|
1,000,000 |
--- |
345,800 |
40% |
IRS Circular 230
Disclosure: To ensure compliance with Treasury Department
Regulations, we are required to inform you that this communication
is not intended or written to be used, and cannot be used, for the
purpose of 1) avoiding penalties under the Internal Revenue Code or
2) promoting, marketing, or recommending to another party any
transaction or matter addressed herein. |
|
