Estate Tax Question.

Factual Questions
1

My father is worried that his estate will be taxed heavily upon his passing. He will be worth maybe $250,000.

From what I see, there is an ‘exlusion’ of $2,000,000 on estates. I take that to mean that the first 2m is not taxable.

From irs.gov

BUT

Further down the page we run into this –

No mention of the exclusion. Which is right?

2

Both are right. If his estate is worth, say, $3 million, then the first $2 million are non-taxable. Of the remaining $1 million, allowable deductions reduce it to find the remaining taxable amount.

With his estate being worth $250,000 he is well under the standard exemption and (even if the amount reverts in a few years as is currently planned) his estate will not be taxed.

3

[QUOTE=Otto]
Both are right. If his estate is worth, say, $3 million, then the first $2 million are non-taxable. Of the remaining $1 million, allowable deductions reduce it to find the remaining taxable amount.

With his estate being worth $250,000 he is well under the standard exemption and (even if the amount reverts in a few years as is currently planned) his estate will not be taxed.
[/QUOTE]
So I thought. Thanks Otto.

4

[QUOTE=Otto]
With his estate being worth $250,000 he is well under the standard exemption and (even if the amount reverts in a few years as is currently planned) his estate will not be taxed.
[/QUOTE]

Will not be federally taxed, that is. Who knows what the law is in his state.

5

[QUOTE=ENugent]
Will not be federally taxed, that is. Who knows what the law is in his state.
[/QUOTE]

Excellent point that should always be kept in mind. Some states tax estates that are too small to owe Federal tax.