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Determining your taxable estate

Many people often come to us here at The Law Offices of Frye and Vazquez, P.L. concerned that much of what they have to leave to their spouses, children, and/or grandchildren will be taken through estate taxes. If you share this same concern, you should know one thing: most estates in the U.S. will not be subject to an estate tax. That is because their total values do not exceed the estate tax threshold set by the federal government. Whether or not yours will depends on the value of your taxable estate.

The Internal Revenue Service has listed the process through which your taxable estate is determined on its website. This allows you to know beforehand whether or not you need even concern yourself with having to learn more about the estate tax. It all starts by determining your Gross Estate. This includes all of the following property:

  •          Cash and securities
  •          Real estate holdings
  •          Insurance policies
  •          Business interests
  •          Trust and annuity income

After having obtained the full value of these assets, you then subtract the amounts of any deductions that you may qualify for. These include your current liabilities (including your mortgage), as well as the expenses associated with the administration of your estate. Assets passed to qualified charities may also qualify for a deduction, as does property passed to your spouse. The amount obtained after considering these deductions is your actual Taxable Estate.

Any taxable gifts (gifts given that exceed the annual federal gift tax exclusion) are added to the value of your Taxable Estate to determine if you owe any tax. The threshold for 2017 is $5.49 million.

More information on estate tax obligations can be found by continuing to explore our site. 

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