The federal government levies no inheritance tax, reports Bankrate. Federal estate tax is levied on gross estates worth more than $5.43 million as of 2015, and the complex returns should be handled by both attorneys and Certified Public Accountants or Enrolled Agents, according to the IRS.Continue Reading
The gross estate includes assets such as cash, securities, real estate, trusts, business interests, annuities and insurance, states the IRS. The federal government uses fair market value to determine an estate's worth, not the original amount paid for assets. Deductions taken from the gross estate to arrive at the amount of taxable estate include mortgages, estate administration costs, other debt, and assets that pass to spouses and qualifying charities.
Married couples with taxable estates have a deduction that postpones collection of estate taxes until after the death of the second spouse, as reported by Forbes. Couples also have the right to portability, which means the first spouse can pass unused exclusions on to the other spouse. This enables the surviving spouse to transfer estate assets of up to $10.86 million tax-free as of 2015, according to the IRS. The portability exclusion only takes effect if a timely estate tax return is filed for the first spouse even if no tax is due. Lawfully married same-sex couples qualify for portability, but couples in civil unions or registered domestic partnerships do not qualify.Learn more about Taxes