What Is the Estate Tax?The estate tax is a tax on property that transfers to others upon your death. Estate taxes are due on the total value of your estate — your home, stocks, bonds, life insurance, and other assets of value. Everything you own, whatever the form of ownership, regardless of whether the assets have been through probate, is subject to estate taxes. Also referred to as the “death tax,” the estate tax was first enacted in this country with the Stamp Act of 1797 to help pay for naval rearmament. After several repeals and reinstatements, the Revenue Act of 1916 put the current estate tax into place. Despite its long history, this tax remains controversial. The IRS calculates the estate tax due on your gross taxable estate by adding the value of your assets and then subtracting any applicable exemptions. The most common exception to the federal estate tax is the unlimited marital deduction. The government exempts all transfers of wealth between a husband and wife from federal estate and gift taxes, regardless of the size of the estate. Of course, the surviving spouse must be a U.S. citizen to qualify for this exemption. When the surviving spouse dies, the estate will be subject to estate taxes and, unless the appropriate preparations have been made, only the surviving spouse’s applicable credit can be used. Other exemptions include mortgage and other debt, administration expenses of the estate, and losses during estate administration. The Economic Growth and Tax Relief Reconiciliation Act of 2001 gradually increased the federal estate tax exemption, until finally repealing the federal estate tax altogether for the 2010 tax year only. The 2010 Tax Relief Act reinstated the federal estate tax with a $5 million exemption (indexed for inflation after 2011) through December 31, 2012; the exemption amount is $5.12 million in 2012. Unless Congress acts to amend or extend this latest tax law, the estate tax will revert to pre-2001 tax law rates, with a $1 million exemption and a top tax rate of 55%. (See the table for the exemption amounts and top estate tax rates.)
Check with your tax advisor to be sure that your estate is protected as much as possible from estate taxes upon your death. * Executors for estates of decedents who died in 2010 had the option of electing to use the 35 percent rate, $5 million exemption, and "stepped up" basis of inherited assets for income tax purposes or zero estate tax liability with "carry over" basis of inherited assets for income tax purposes. The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2012 Emerald Connect, Inc. |
| Hammortree Financial Services |
print this page| 145 S. Virginia Street | • | Crystal Lake, IL | • | 60014 |
| Phone: 815-788-7420 | • | Fax: 815-788-7430 |
| • | ahammortree@hammortreefinancial.com |
Links to other sites are for your convenience in locating related information and services. This Agency, The Guardian Life Insurance Company of America (Guardian) and Park Avenue Securities, LLC (PAS) do not maintain these other sites and have no control over the organizations that maintain the sites or the information, products or services these organizations provide. Although this Agency, Guardian and PAS believe that the information from these organizations is reliable, we cannot guarantee its completeness or suitability for any purpose. Accordingly, this Agency, Guardian and PAS expressly disclaim any responsibility for the content the accuracy of the information or the quality of products or services provided by the organizations that maintain these sites. This Agency, Guardian and PAS do not recommend or endorse these organizations or their products or services in any way.
The information or opinions contained in this Internet site should not be constructed by any consumer and/or prospective client as an offer to sell or solicitation of an offer to buy any particular investment product. The information contained herein is directed solely to those individuals who reside in jurisdictions in which the representative is registered in the state where the consumer and/or prospective client reside. Any subsequent direct communication with a consumer and/or prospective client shall only be conducted by a representative that is registered in the state where the consumer and/or prospective client reside.
Annette Hammortree is insurance licensed and registered to offer products and services in: Alabama, Arkansas, Arizona, Florida, Georgia, Illinois, Kentucky, Michigan, Minnesota, Missouri, New jersey, New York, Ohio, Oregon, Pennsylvania, Texas, Wisconsin, Wyoming.
Annette Hammortree is securities licensed in: Arkansas, Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Washington, Wisconsin, and Wyoming and is strictly intended for individuals residing in those states. No offers may be made or accepted from any resident outside these specified states
Annette Hammortree is an IAR (Investment Advisor Representative) licensed in: Florida, Illinois,Massachusetts, Minnesota, New Jersey, New York, and Wisconsin and is strictly intended for individuals residing in those states. No offers may be made or accepted from any resident outside these specified states.
Annette Hammortree, Registered Representative & Financial Advisor of Park Avenue Securities LLC (PAS), 8010 Excelsior Dr, Suite 200, Madison, WI 53717 (608)828-9800. Securities products/services and advisory services offered through PAS a Registered Broker-Dealer and Investment Advisor. Annette Hammortree, Financial Representative of The Guardian Life Insurance Company of
PAS a member of FINRA,SIPC