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Federal Estate tax
Federal Estate tax is imposed on the transfer of property of a person after his death. It is also imposed on the gifts which a person transfers during his present life. This is to make sure that a person is not able to avoid estate tax by transferring it just before his death.
Exemptions
It doesn’t apply if the property is left to spouse, any charitable or religious organization or to any government welfare agency. Funeral expenses and state inheritance tax are also not included.
Current proposals
The tax was repealed for people dying in 2010 and the limit was also raised for 2009. The table shows the details. The maximum tax rate was decreased from 55% to 45%. The Republican reform proposal is an Exemption of $5 million per individual and a tax rate of 15% while the Democratic reform proposal is an exemption of $3.5 million per individual and a tax rate of 35%.
Year
Exemptions up to the limit (in $) 2006 to 2008
2 million
2009
3.5 million
2010
repealed
2011
1 million
Published: February 06, 2008
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