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Inheritance tax, also known in some countries outside the United States as a death duty and referred to as an estate tax within the U.S, is a form of tax levied upon the bequest that a person may make in their will to a living person or
organization. If a bequest is made to a charitable
organization, most countries do not apply the tax. The tax is also imposed on other transfers of property made as an incident of the death of the owner, such as a transfer of property from an intestate estate, or the payment of certain life insurance benefits.
(see
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The U.S. federal government
imposes an estate tax, calculated as a percentage of
the part of the estate that exceeds the current
exempted value. For 2005, an estate with a value
less than $1,500,000 would not pay an estate tax and
most likely would not have to file an estate tax
return. Many U.S. states also impose their own
estate or inheritance taxes (See state estate tax).
For estates larger than the current exempted amount,
any estate tax due is paid by the executor or other
person responsible for administering the estate.
That person is also responsible for filing a return
with the Internal Revenue Service. The return must
contain detailed information as to the valuations of
the estate assets and the exemptions claimed, to
ensure that the correct amount of tax is paid.
Life insurance benefits generally form part of the
gross estate for tax purposes, if the benefits are
payable to the estate, or if the decedent was the
owner of the life insurance policy or had any
"incidents of ownership" over the life insurance
policy. Similarly, bank accounts or other financial
instruments which are "payable on death" or
"transfer on death" are usually included in the
taxable estate, even though such assets are not
subject to the probate process.
The taxable portion of an estate can be reduced
through charitable contributions or provisions that
allow executors of some qualifying family-owned
farms to reduce the taxable value of an estate's
real property by some percentage of market value (up
to certain limits) if certain eligible heirs
continue to actively farm the property for over a
decade.
Many of its opponents refer to the estate tax as the
"death tax" and have called for its
abolition. Since 2002, the top rate has dropped from
50% by one percent per year; it is scheduled to drop
to 45% in 2009, thence to 0% in 2010, but as of
2005, if no further changes in the law are enacted,
the tax will be re-imposed at a top rate of 50% in
2011. It is, however, expected that Congress will
enact legislation to change this in the intervening
period.
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Estate Tax News
• Stayin Alive: How To Cheat The Estate Tax WallStreet Journal Via Yahoo Finance
Congress and the next president are expected to reach a compromise on future estate tax rules. Heres a look at what tax plans could lie ahead and how families would be affected by them.
• Shirley FY2009 Preliminary Tax Bills Mailed Shirley Oracle
SHIRLEY The Fiscal Year 2009 first and second quarter real estate and/or personal property preliminary tax bills were mailed on July 1.
• County Tax Bills Being Sent The Oxford Press
HAMILTON Roughly 78,000 real estate tax bills are en route to mailboxes across Butler County, according to county Treasurer Nancy Nix. The due date for payment of the second half 2007 real estate taxes is Aug. 4.
• US Congress Likely To Make EstateTax Changes In 2009 Nasdaq
WASHINGTON Dow Jones Congress is likely to act in 2009 to head off a scheduled repeal of the estate tax, according to policymakers and lobbyists on all sides of the issue.
• County Tax Bills Being Sent Middletown Journal
HAMILTON Roughly 78,000 real estate tax bills are en route to mailboxes across Butler County, according to county Treasurer Nancy Nix.
IMPORTANT NOTICE:
The information provided by FactsOfLaw.com does not
constitute legal advice or any other type of advice and is
provided for educational purposes only without
warranty of any kind. FactsOfLaw.com has not
reviewed the information on this page for accuracy
and is not responsible for any errors, omissions or
inaccuracies. For legal advice you should
consult a licensed attorney. Source: wikipedia.org
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