Applicable Exclusion Amounts
The estate tax on
estates of decedents is imposed on the decedent's taxable estate
(gross estate less deductions). A credit (based on the
Applicable Exclusion Amount) against
estate tax is allowed, as well as other credits.
The
gift tax is imposed on transfers of property by gift. The gift tax
is based on the cumulative value of current and prior taxable gifts.
A credit
(based on the
Applicable Exclusion Amount)
against gift tax is allowed.
After the Applicable Exclusion Amount of $1,500,000 is applied to estates
in 2005, marginal tax rate is 45% up to $2 million in value and and 47% over
$2 million as shown in the tables below.
(A) |
(B) |
(C) |
(D) |
Amount
subject to tentative tax... |
Tax on
amount in column A*
|
Tax rate on
excess over amounts in Column A*
|
exceeding |
but not
exceeding
|
|
|
$--- |
$10,000 |
$--- |
18% |
10,000 |
20,000 |
1,800 |
20% |
20,000 |
40,000 |
3,800 |
22% |
40,000 |
60,000 |
8,200 |
24% |
60,000 |
80,000 |
13,000 |
26% |
80,000 |
100,000 |
18,200 |
28% |
100,000 |
150,000 |
23,800 |
30% |
150,000 |
250,000 |
38,800 |
32% |
250,000 |
500,000 |
70,800 |
34% |
500,000 |
750,000 |
155,800 |
37% |
750,000 |
1,000,000 |
248,300 |
39% |
1,000,000 |
1,250,000 |
345,800 |
41% |
1,250,000 |
1,500,000 |
448,300 |
43% |
1,500,000 |
2,000,000 |
555,800 |
45% |
2,000,000 |
--- |
780,800 |
47%** |
**The
Economic Growth
and Tax Relief Reconciliation Act of 2001 phases down the maximum
estate and gift tax rate in steps for calendar years after 2002 and
before the repeal of the estate tax in 2010 and reduces the maximum
gift tax rate in effect after the repeal of the estate tax. See
table below.
Year |
Estate Tax
Applicable Exclusion Amount |
Estate Tax
Credit (applicable credit amount) |
Gift Tax
Applicable Exclusion Amount |
Maximum Gift
and Estate Tax Rate |
2005 |
$1,500,000 |
555,800 |
$1,000,000 |
47% |
2006 |
$2,000,000 |
780,800 |
$1,000,000 |
46% |
2007 |
$2,000,000 |
780,800 |
$1,000,000 |
45% |
2008 |
$2,000,000 |
780,800 |
$1,000,000 |
45% |
2009 |
$3,500,000 |
1,455,800 |
$1,000,000 |
45% |
2010 |
N/A (taxes
repealed) |
N/A (taxes
repealed) |
$1,000,000 |
Top
individual income tax rate (Gift tax only) |
2011- |
$1,000,000 |
345,800 |
$1,000,000 |
55% |
Year |
Estate Tax Exemption
Equivalent (now known as Applicable Exclusion Amount) |
Estate Tax
Credit (applicable credit amount) |
Maximum Gift
and Estate Tax Rate |
Top Marginal Rate Begins
at (in millions) |
1977 |
120,667 |
$30,000 |
70% |
5.0 |
1978 |
134,000 |
34,000 |
70% |
5.0 |
1979 |
147,333 |
38,000 |
70% |
5.0 |
1980 |
161,563 |
42,500 |
70% |
5.0 |
1981 |
115,625 |
47,000 |
70% |
5.0 |
1982 |
225,000 |
62,800 |
65% |
4.0 |
1983 |
275,000 |
79,300 |
60% |
3.5 |
1984 |
325,000 |
96,300 |
55% |
3.0 |
1985 |
400,000 |
121,800 |
55% |
3.0 |
1986 |
500,000 |
155,800 |
55% |
3.0 |
1987-1997 |
600,000 |
192,800 |
55%*** |
3.0 |
1998 |
625,000 |
202,050 |
55% |
3.0 |
1999 |
650,000 |
211,300 |
55% |
3.0 |
2000 |
675,000 |
220,550 |
55% |
3.0 |
2001 |
675,000 |
229,550 |
55% |
3.0 |
2002 |
1,000,000 |
345,800 |
50% |
2.0 |
2003 |
1,000,000 |
345,800 |
49% |
2.0 |
2004 |
1,500,000 |
555,800 |
48% |
2.0 |
*** Between 1987 and
1997 there was a 5% surtax (in addition to the 55% marginal rate)
between $10,000,000 and $21,040,000. This phased out the
graduated rates to make the tax a flat 55% for estates above
$21,040,000. |
|