The amount of the estate tax is directly related to the amount of taxable gifts.
The Federal transfer taxes are calculated using cumulative lifetime transfers.
An exemption equivalent is the amount of annual gifts that is automatically exempt from the gift tax.
The exemption equivalent was repealed in 1976.
The unified credit is designed to allow a minimum amount of lifetime transfers without triggering the
imposition of a transfer tax.
For 2011 the exemption equivalent for the estate tax is $5 million.
The marital and charitable deductions are common to both the estate tax and the gift tax formulas.
The estate tax is imposed on testamentary transfers.
The gift tax is imposed on intervivos (lifetime) transfers.
10. The tax rate schedule on taxable transfers has a maximum tax rate of 35% for 2011.
11. The probate estate consists of all property owned by the decedent that is excluded from the gross
12. No deductions are allowed when calculating the taxable estate.
13. Including adjusted taxable gifts in the taxable estate causes these gifts to be taxed twice, once under the
gift tax and again under the estate tax.
14. The gross estate may contain property transfers that are not included in the probate estate.
15. The gross estate will not include the value of clothes and other personal items owned by the decedent at
the time of death.
16. The gross estate will include the total value of all real property owned by the decedent at the time of
death regardless of whether the decedent co-owned the property as tenants in common or as joint tenants
with the right of survivorship.
17. Proceeds of life insurance paid due to the death of the decedent are included in the decedent's gross estate
if the decedent had the right to designate the beneficiary of the policy.
18. The gross estate includes the value of half of real property owned by a decedent and spouse in joint
tenancy with the right of survivorship.
19. The gross estate always includes the value of half of any real property owned by a decedent and another
person in joint tenancy with the right of survivorship.
20. Proceeds of life insurance paid to the decedent's estate due to the death of the decedent are included in the
decedent's gross estate even if the decedent had no ownership rights in the policy at the time of death.
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