Ways to avoid federal estate tax include gifting property up to the allowed annual amount or establishing certain trusts, Nolo advises. People can also pay for someone's school tuition or gift property to charity to avoid federal estate tax.
Estate tax is a federal or state tax on property that a person owns at death and is transferred to another person or entity through a will or through the state laws that govern the assets of people who die without a will, called intestacy laws. Everything a person owns at death, including cash, stoc
California, Arizona, Nevada, Utah and Idaho are among the many states that do not have an inheritance tax, as of 2014, according to the Tax Foundation. Montana, Wyoming, North Dakota, South Dakota and Colorado are others. In fact, most states do not assess inheritance tax.
As of 2015, the federal estate tax exemption amount is $5,430,000. This means if the decedent's estate was valued at $5,430,000 or less at the time of his death, his beneficiary does not have to pay federal tax on the inheritance, according to About.com.
Representatives of a deceased person pay estate taxes before the money is distributed to beneficiaries, and taxpayers pay income taxes on their earnings, according to TurboTax. Individuals who receive money from an estate aren't required to pay federal taxes on their inheritance, although individual
As of 2015, only 15 states and the District of Columbia collect estate tax from their residents, according to About.com. The maximum estate tax rate varies from 9.5 percent in Tennessee to 20 percent in Washington for the 2015 tax year.
The 2015 estate tax limit is $5.43 million per person, according to Forbes. This limit represents a $90,000 increase in the allowable estate value from the 2014 limit of $5.34 million. Estates over the $5.43 million limit are liable for the top federal estate tax rate of 40 percent.
States, counties and other municipalities impose real estate transfer tax on the transfer of real estate titles within their jurisdictions, according to the National Conference of State Legislatures. As of 2015, 37 states and the District of Columbia impose real estate transfer taxes on transfers of
The maximum estate tax in 2014 was 40 percent, according to the Tax Foundation. The estates of individuals who died during that year were exempt from taxation if they were valued at or below $5.34 million, explains the IRS.
The estate tax rates in Maine range between 8 percent and 12 percent of all estates valued over $2 million. Estates valued under $2 million are not required to pay estate tax, according to Executor's Corner.