The New York Times had a piece on the tax code changes that will take effect next year unless Congress acts to extend current provisions. One of the items on this list is an increase in the amount of wealth exempted from the estate tax.
The piece lists the amount currently exempted as $13.6 million, with the possibility it will revert back to its pre-Trump level of $5 million (adjusted somewhat higher for inflation) if the Trump provision is not extended. It is important to point out that this is the exemption for a single individual. A couple would be able to pass on $27.2 million to their heirs without paying any tax whatsoever.
This tax applies to less than 2,000 estates a year, less than 0.1 percent of all estates. Even with the $5 million cutoff only around 5,000 estates paid the tax.
It is also important to recognize that the tax is marginal — it only applies to wealth above the cutoff. This means for example, that a couple with an estate of $27.5 million would only pay the 40 percent tax on the $300,000 above the cutoff. In this case, the heirs would face a tax liability of $120,000, less than 0.5 percent of the estate.
This first appeared on Dean Baker’s Beat the Press blog.
The post The Estate Tax Exemption is $27.2 Million for a Couple appeared first on CounterPunch.org.
This post was originally published on CounterPunch.org.
