Estate Tax Exemptions and Deductions

decatur Attorney Mary Conner PoolTax season is beginning, and with that comes tax questions about a variety of topics. Today, I am going to give a short overview on the estate tax.

Estate Tax Exemptions

The estate tax is imposed on the value of the deceased’s property before any of the property is distributed to beneficiaries.  When calculating the value of the estate, the fair market value of the property is used, not what was paid for the property or the value when the property was acquired.  The total value of all the property is called the “gross estate.”  The gross estate includes the value of real property, personal property, cash, stocks and bond, and any other assets.  The gross estate generally does not include property that the decedent no longer has control over, such as life estates or a gift given during life that has been completely transferred to someone else.

Estate Tax Deductions

There are certain deductions that will reduce the estate tax owed.  First, there is a marital deduction. The marital deduction applies to property that is included in the gross estate and passes to the surviving spouse.  The IRS includes same sex marriages in the definition of “spouse,” as long as the couple was lawfully married under the laws of a state that recognizes same sex marriage, even if the married couple resides in a state that does not recognize the validity of the marriage.   Another deduction to the estate tax owed is for charitable contributions left to a qualified charity.  Other deductions include a deduction for estate administration costs, and for mortgages and other debt.

Many estates do not require an estate tax return to be filed.  That is because the IRS sets a hefty estate tax exemption.  Every person can leave a certain amount of property to heirs without having to pay the estate tax.   In 2015, the estate tax exemption has increased to $5.43 million per individual, up from $5.34 million in 2014.  The exemption amount has risen sharply in the past ten years- it was $1.5 million per individual in 2005.  If a return is required, it must be filed within nine months of death unless an extension is granted.

If you need help with your tax debt or have other tax questions, please contact us and set up a consultation to speak with an attorney today.

Share This Page

Bond & Botes Law Offices

At Bond & Botes, we now offer full service bankruptcy consultation and filing over the phone or by video from the comfort and safety of your home or office. Please call 1-877-581-3396 or click here to setup your free phone or video consultation.

The lawyers at the Bond & Botes affiliated offices serve clients at offices in Anniston, Birmingham, Mobile, Montgomery, Opelika, Decatur, Huntsville, Florence, Haleyville and Gadsden, Alabama; Vicksburg, Hattiesburg and Jackson, Mississippi. Read our disclaimer here. You can view our Privacy Policy here.

Alabama Offices

Birmingham

2107 5th Avenue North
Age-Herald Building
Birmingham, Alabama 35203
Phone: (205) 802-2200


Shelby County Location
15 Southlake Lane, Ste 140
Birmingham, AL 35244
Phone: (205) 802-2200


Florence Location
121 S. Court Street
Florence, AL 35630
Phone: (256) 760-1010


Huntsville Location
225 Pratt Avenue NE
Huntsville, AL 35801
Phone: (256) 539-9899


Montgomery Location
311 Catoma Street
Montgomery, AL 36104
Phone: (334) 264-3363


Decatur Location
605 Bank Street
Decatur, AL 35601
Phone: (256) 355-2447


Haleyville Location
914 19th St.
Haleyville, AL 35565
Phone: (205) 486-3580


Gadsden Location
430-B Chestnut Street
Gadsden, AL 35901
Phone: (256) 485-0195


Opelika Location
216 South 8th Street
Opelika 36801
Phone: (334) 887-7666


Anniston Location
1302 Noble St #2C
Anniston, AL 36201
Phone: (256) 344-3559


Cullman Location
200 Second Avenue SW
Cullman, AL 35055
Phone: (256) 739-9866


Mississippi Offices

Jackson Location
5760 I-55 North, Ste 100
Jackson, MS 39211
Phone: (601) 353-5000


Hattiesburg Location
607 Corinne St, Ste B8
Hattiesburg, MS 39401
Phone: (601) 264-7200


Vicksburg Location
1212 Farmer Street
Vicksburg, MS 39180
Phone: (601) 353-5000

© 2024 by Bond & Botes Law Offices. All rights reserved. Disclaimer | Privacy Policy