Federal Estate Tax Rates

The Economic Growth and Tax Relief Act of 2001 was signed into law on June 7, 2001.  Under this law, the federal estate tax continues but with increasing Unified Credit and decreasing top federal estate tax rates until 2010.  The federal estate tax is repealed in the year 2010 only.  In the year 2011, the federal estate tax will be re-imposed, the Unified Credit will return to $1,000,000 and the top tax rate will again be 55%.

ESTATE TAX RATES – Table 1

FOR A TAXABLE ESTATE

THE FEDERAL ESTATE TAX

From

To

Is

of Amount Over

$0

$10,000

18%

$0

10,001

20,000

1,800 + 20%

10,000

20,001

40,000

3,800 + 22%

20,000

40,001

60,000

8,200 + 24%

40,000

60,001

80,000

13,000 + 26%

60,000

80,001

100,000

18,200 + 28%

80,000

100,001

150,000

23,800 + 30%

100,000

150,001

250,000

38,800 + 32%

150,000

250,001

500,000

70,800 + 34%

250,000

500,001

750,000

155,800 + 37%

500,000

750,001

1,000,000

248,300 + 39%

750,000

1,000,001

1,250,000

345,800 + 41%

1,000,000

1,250,001

1,500,000

448,300 + 43%

1,250,000

1,500,001

2,000,000

555,800 + 45%

1,500,000

2,000,001

& Up

780,800 + 48%

2,000,000

 

UNIFIED CREDIT – Table 2

 

If You Die During

Top

Estate Tax Rate

Applicable

Unified Credit

Equivalent

Exemption

2003

49%

          345,800

1,000,000

2004

48%

          555,800

1,500,000

2005

47%

          555,800

1,500,000

2006

46%

          780,800

2,000,000

2007

45%

          780,800

2,000,000

2008

45%

          780,800

2,000,000

2009

45%

       1,455,800

3,500,000

2010

Repealed for 1 year

        Unlimited

 Unlimited

2011

55%

          345,800

1,000,000

 

Federal estate taxes are paid on assets that do not go to a surviving spouse or a trust for a spouse’s benefit.  To calculate, ascertain total estate value and add lifetime taxable gifts (if any).  This figure will be your total taxable estate.  Determine the federal estate tax due from Table 1 and subtract the appropriate Unified Credit for the year of death from the Table 2.  This figure will be your federal estate tax due.

Disclaimer:  Please contact a qualified tax advisor for specifics on your individual circumstances.