What changes were made to estate tax laws in 2011?


Quick Answer

The unused portion of an individual's exemption from estate taxes became portable from one spouse to another as of Jan. 1, 2011, according to the Internal Revenue Service. The 2010 Tax Relief Act also allowed heirs to use a later basis price when calculating capital gains on inherited property, states Nolo.

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Full Answer

Estate taxes are levied after death on the value of the deceased's property, or estate, before it transfers to heirs, states the IRS. A portion of the estate is exempted from estate taxes. The exemption for 2015 is $5.43 million.

In 2011, the portion of an estate exempted from the estate tax was $5 million, effectively making the maximum exempted estate for a married couple $10 million because asset transfers between spouses were already estate-tax-exempt, according to Forbes. The amount exempted from estate taxes is indexed to inflation, states About.com.

Estate law changes effective in 2011 altered the way that inherited property is valued for capital gains purposes, according to Nolo. While the basis, or original, value of inherited property had previously been its original purchase price for the purpose of calculating capital gains when sold, the 2010 law allows heirs to use the value at the date of the decedent's death as the basis price instead.

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