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The Economic Growth and Tax Relief Act of 2001, signed into law on June 7, 2001 increased the Unified Credit and decreased top federal estate tax rates from 2002 through 2010 when the federal estate tax is to be repealed. However this repeal will only last for the one year unless renewed by Congress. Otherwise, in the 2011, the federal estate tax will be re-imposed, the Unified Credit will return to $1,000,000 and the top tax rate will return to 55%.
ESTATE TAX RATES – Table 1
|
FOR A TAXABLE ESTATE |
THE FEDERAL ESTATE TAX |
|
From |
To |
Is |
of Amount Over |
|
$0 |
$10,000 |
18% |
$0 |
|
10,001 |
20,000 |
1,800 + 20% |
10,000 |
|
20,001 |
40,000 |
3,800 + 22% |
20,000 |
|
40,001 |
60,000 |
8,200 + 24% |
40,000 |
|
60,001 |
80,000 |
13,000 + 26% |
60,000 |
|
80,001 |
100,000 |
18,200 + 28% |
80,000 |
|
100,001 |
150,000 |
23,800 + 30% |
100,000 |
|
150,001 |
250,000 |
38,800 + 32% |
150,000 |
|
250,001 |
500,000 |
70,800 + 34% |
250,000 |
|
500,001 |
750,000 |
155,800 + 37% |
500,000 |
|
750,001 |
1,000,000 |
248,300 + 39% |
750,000 |
|
1,000,001 |
1,250,000 |
345,800 + 41% |
1,000,000 |
|
1,250,001 |
1,500,000 |
448,300 + 43% |
1,250,000 |
|
1,500,001 |
2,000,000 |
555,800 + 45% |
1,500,000 |
|
2,000,001 |
& Up |
780,800 + 48% |
2,000,000 |
UNIFIED CREDIT – Table 2
|
If You Die During |
Top
Estate Tax Rate |
Applicable
Unified Credit |
Equivalent
Exemption |
|
2003 |
49% |
345,800 |
1,000,000 |
|
2004 |
48% |
555,800 |
1,500,000 |
|
2005 |
47% |
555,800 |
1,500,000 |
|
2006 |
46% |
780,800 |
2,000,000 |
|
2007 |
45% |
780,800 |
2,000,000 |
|
2008 |
45% |
780,800 |
2,000,000 |
|
2009 |
45% |
1,455,800 |
3,500,000 |
|
2010 |
Repealed for 1 year |
Unlimited |
Unlimited |
|
2011 |
55% |
345,800 |
1,000,000 |
Federal estate taxes are paid on assets that do not go to a surviving spouse or a trust for a spouse’s benefit. To calculate, ascertain total estate value and add lifetime taxable gifts (if any). This figure will be your total taxable estate. Determine the federal estate tax due from Table 1 and subtract the appropriate Unified Credit for the year of death from the Table 2. This figure will be your federal estate tax due.
Source: www.irs.gov
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