Good morning and welcome to U.S. Estate and Gift Tax 101. I'm being joined by Steve Flynn. Unfortunately, Christa Rabado, who was scheduled to join us, can't be here today. So Steve, one of my partners, will be joining us and working with me on U.S. Estate and Gift Tax 101. The focus of this session is primarily on U.S. estate and gift tax issues for Canadians. We'll talk more about what this means for Canadians later. It is often a source of confusion for Canadians to understand the difference between estate and gift tax. Unlike Canada, the U.S. does have estate and gift tax. Sometimes in Canada, people refer to this as a death tax. While there are taxes associated with death in Canada, it is important to understand the difference. Canada taxes the unrealized appreciation of assets held by the deceased, whereas the U.S. taxes the net value of the assets minus any debts. To put it simply, if a Canadian dies with a hundred million dollars of cash in the bank, they have zero tax on their death because there is no unrealized appreciation associated with that asset. However, if an American citizen or U.S. domicile dies with a hundred million dollars in the bank, they could potentially face a forty million dollar tax, as the tax is based on the net value of the assets. It's worth mentioning that not many Americans actually pay U.S. estate and gift tax due to effective tax planning. While you can't take your money with you on your death, you have the option to leave substantial amounts to non-governmental organizations or charitable organizations in order to manage estate taxes. There are various alternatives available, not limited to charitable giving. Warren, I wanted to interject here to mention that I recently read an article in the...
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Practical Issues Regarding Estate And Gift Tax: What You Should Know
Estate and Gift Taxes | Internal Revenue Service April 5, 2024 — How will estate taxes impact the lives of my children? The 2024 estate tax return is due by March 31 and there are two issues to be addressed: the federal estate tax (the alternative minimum tax/AURA, the estate tax, or tax due) and the state estate tax. For the federal estate tax, the filing requirements, payment, reporting, and due dates in 2018. For an overview of the state estate tax, the filing requirements, payment, reporting, and due dates in 2018. For an update on the estate tax payments by January 2019. For a summary of other issues, see Estate Tax: Estate Tax Returns, Questions and Answers. Estate Tax Return Filing Requirements. There are two main forms: the Federal Estate Tax Return (form 7003 or 7005) and the Form 706 Estate & Gift (Form 706-EZ). The Federal Estate Tax Return is the first filing of a person's estate tax account, with the state estate tax (unless you had a state exemption from the state estate tax). When you file your federal return, you report your taxable estate in a manner similar to other returns, as explained in the 2024 Form 706 Estate and Gift. Estate and Gift Tax Rates | IRS.pdf Here is the 2024 range of federal estate and gift tax amounts: 2024 Estate and Gift Tax Rates Estate with assets. The federal estate tax rate on your estate is 40 percent. For married couples, the tax rate is 55 percent. If you have no spouse, and your spouse has no taxable estate, or if your spouse has a taxable estate of 30 million or more, the federal estate tax rate will be 55 percent on the amount in excess of 30 million. These amounts must be reported on the federal estate tax return. The amount is increased for estates under 50 million. The combined federal and state estate tax rates can be found in Pub. 535. The maximum combined federal and state estate tax rate is 55 percent on the amount in excess of 10.0 million, not including the first 2.5 million of a non-stepchild's estate. For estates under 10.0 million, the estate tax applies to the first 2,500,000 in net adjusted gross estate (AGI) (in 2024 dollars), after which the estate tax can be zero. The amount in excess of the 10.
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