New Inheritance Tax Laws for 2011, 2012
62New Inheritance Tax Laws
An inheritance tax is commonly referred to as an estate tax. This tax is assessed on the estate or total value of the money and property the individual owns when they die.
The estate tax is usually assessed to assets exceeding $1 million, however since the government has initiated stimulus packages and tax cuts there has been reductions put into place and the value of the assets has increased over the years. Previously estate tax was imposed a minimum 37% tax and had been as high as 55% tax.
President Bush began the estate tax reductions with the plan of phasing out the estate tax, which would be accomplished two ways. The first way to reduce the tax was by raising the amount exempt from the estate tax rate, secondly lowering the estate tax rate itself. There have been changes made for the new inheritance tax laws for in 2011.
According to the IRS you were not required to pay estate tax if your assets did not exceed the following amounts.
2005 - $1,500,000
2006 - $2,000,000
2007 - $2,000,000
2008 - $2,000,000
2009 - $3,500,000
Also the tax rate that was assessed to the excess amount was reduced to the following percents.
2005 – 47%
2006 - 46%
2007 – 45%
2008 – 45%
2009 – 45%
The new inheritance tax laws for 2011 is the estate tax rate drops to zero percent. So if you die in that year, your heirs would not pay taxes, regardless the amount of assets you owned.
For more information regarding the new inheritance tax I would suggest using an online tax software service such as TurboTax. They offer a variety of software editions that will meet your individual tax needs.
For answers to all of your tax related questions visit TurboTax Online today. Try TurboTax online tax caster to see your potential savings regarding an inheritance tax.
Federal Inheritance Tax Laws
Phyllis Shaw 6 months ago
My father-in-law died in March 2011. He left an estate in the amount of 462,647.00 to be divided between my husband and his sister evenly. She has control over the money since she was executor of the estate. The estate includes Insurance policies in the amount of 152,000. The policies consist of a 50,000. policy from the Sheriff's Dept. whereas we received $25,000. from the Ins. Co. A life Insurance policy in the amt. of $100,000. that was deposited into his sister's estate account, a VA Ins. policy in the amt. of 2,500. of which my husband received 1,250. Part of the estate was real estate in the amount of $120,000. (2 houses with a value of $60,000 each. We moved into my father-in-law's house and my sister-in-law has the other house on the market for $60.000. We have only gotten $13,000. as a gift from the estate. Next year we are scheduled to get another $13,000. Is this legal?