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?
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.
So I thought. Thanks Otto.
Will not be federally taxed, that is. Who knows what the law is in his state.
Excellent point that should always be kept in mind. Some states tax estates that are too small to owe Federal tax.