Estate Tax & U.S. Citizen & Foreign National Tax Free Planning

Estate Tax for U.S. Citizens 

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death . The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.

After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit.

Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; $3,500,000 for decedents dying in 2009; and $5,000,000 or more for decedent's dying in 2010 and 2011 (note: there are special rules for decedents dying in 2010); $5,120,000 in 2012, $5,250,000 in 2013, $5,340,000 in 2014, $5,430,000 in 2015, $5,450,000 in 2016, $5,490,000 in 2017, $11,180,000 in 2018, $11,400,000 in 2019, and $11,580,000 in 2020.

Beginning January 1, 2011, estates of decedents survived by a spouse may elect to pass any of the decedent’s unused exemption to the surviving spouse. This election is made on a timely filed estate tax return for the decedent with a surviving spouse. Note that simplified valuation provisions apply for those estates without a filing requirement absent the portability election. 

 Under the current tax law, the higher estate and gift tax exemption will sunset on December 31, 2025. Starting January 1, 2026, the exemption will return to $5 million adjusted for inflation. With inflation, this may land somewhere between $6 million and $7 million. 

Talk to TUSK today and plan a tax efficient transfer of assets for your estate and legacy.

Life Insurance is only one approach of mitigation of taxes for your legacy. Find out today how TUSK manages financial and investments for your tax free legacy.

Double your estate tax free with Guaranteed assets.

*TUSK and their representatives do not offer tax or legal advice.  We encourage you to seek tax  & legal advice from appropriately credentialed professionals including CPA for tax advise and Attorney for legal advice.

What you need to Know Regarding Taxes Transfers from a U.S. Citizen or Resident Alien Estate Tax To a U.S. Citizen

Spouse: • Unlimited Marital Deduction

Non-Spouse: • Lifetime Exemption = $5,450,000*

To a Resident Alien or Non Resident Alien

Spouse: • Lifetime Exemption = $5,450,000* • Unlimited Marital Deduction if in a QDOT

Non-Spouse: • Lifetime Exemption = $5,450,000*

Transfers from a Non Resident Alien: Federal Gift Tax/U.S. Situs Property To a U.S. Citizen

Spouse: • Unlimited Marital Deduction

Non-Spouse: • Annual Exclusion = $14,000* • Lifetime Exemption = N/A

To a RA or NRA

Spouse: • Annual Exclusion = $148,000* • Lifetime Exemption = N/A

Non-Spouse: • Annual Exclusion = $14,000* • Lifetime Exemption = N/A

Transfers from a Non Resident Alien: Federal Estate Tax/U.S. Situs Property To a U.S. Citizen

Spouse: • Unlimited Marital Deduction

Non-Spouse: • Applicable exclusion = $60,000*

To a RA or NRA

Spouse: • Applicable exclusion = $60,000* • Unlimited MD if in QDOT

Non-Spouse: • Applicable exclusion = $60,000*

*As of 2016

What you need to Know Regarding Taxes Estate Tax Bilateral Treaties Increased Unified Credit • Finland • France • Germany • Greece • Italy • Japan • Norway • Switzerland • Canada and Australia do not have an estate tax, but Form 706-NA in its current form permits pro-rata unified credit amounts to residents of those jurisdictions

• Belgium-U .S . bilateral estate tax treaty is in a proposed form

What Property is U.S. Situs for Estate Tax purposes • Real property in U .S . – houses, condos • Personal property in U .S . • U .S . based stocks, business interests – including co-ops • Cash deposits with U .S . Brokers, U .S . Mutual Funds • Cash Value of life insurance owned by NRA on the life of another if issued by a U .S . insurer (Treaties may impact the treatment)

Life insurance on the NRA is not included in the estate.

Non-resident Alien – Gift Tax • Unlimited Marital Deduction as long as transfer is to a U .S . Citizen

• Gifts on U .S . Situs assets such as real property and tangible personal property

• Gift Tax annual exclusion = $14,000 (as of 2016)

• Cannot use Life Time Exemption

*TUSK and their representatives do not offer tax or legal advice.  We encourage you to seek tax  & legal advice from appropriately credentialed professionals including CPA for tax advise and Attorney for legal advice.

*As of 2016