FINC 321 Disc ***Professor Anthony ONLY***

Sydnee:

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, and $5,450,000 in 2016.

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. 

Jeff:

The most recent legislation on estate tax says, in summary, that a person may leave another person up to $5.45 million without owing any taxes.  There is also a clause that now allows a married couple to each give this amount individually to allow a family to leave nearly $11 million without owing nay taxes on it.  This is referred to as the portability clause.  On estates that exceed the $5.45 million mark, the tax rate is 40%, which is the lowest it has been since the 1930s.