# Estate Tax Question.

**URL:** <https://boards.straightdope.com/t/estate-tax-question/359626>\
**Category:** Factual Questions\
**Created:** [June 6, 2006, 4:07pm UTC](https://boards.straightdope.com/t/estate-tax-question/359626 "2006-06-06T16:07:44Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![enipla](https://avatars.discourse-cdn.com/v4/letter/e/54ee81/32.png) [@enipla](https://boards.straightdope.com/u/enipla)\
**Post date:** [June 6, 2006, 4:07pm UTC](https://boards.straightdope.com/t/estate-tax-question/359626/1 "2006-06-06T16:07:44Z")

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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](http://www.irs.gov/businesses/small/article/0,,id=98968,00.html#estate)

> [@](#):
>
> The applicable exclusion amount is increased to $2,000,000 for estates and remains at $1,000,000 for gifts

BUT

Further down the page we run into this –

> [@](#):
>
> Taxable Estate  
> The allowable deductions used in determining your taxable estate include:
> 
> 1. Funeral expenses paid out of your estate,2) Debts you owed at the time of death, and
> 2. The marital deduction (generally, the value of the property that passes from your estate to your surviving spouse).

No mention of the exclusion. Which is right?

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**Author:** ![Otto](https://avatars.discourse-cdn.com/v4/letter/o/bbe5ce/32.png) [@Otto](https://boards.straightdope.com/u/Otto)\
**Post date:** [June 6, 2006, 4:31pm UTC](https://boards.straightdope.com/t/estate-tax-question/359626/2 "2006-06-06T16:31:49Z")

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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.

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**Author:** ![enipla](https://avatars.discourse-cdn.com/v4/letter/e/54ee81/32.png) [@enipla](https://boards.straightdope.com/u/enipla)\
**Post date:** [June 6, 2006, 4:48pm UTC](https://boards.straightdope.com/t/estate-tax-question/359626/3 "2006-06-06T16:48:35Z")

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[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.

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**Author:** ![ENugent](https://avatars.discourse-cdn.com/v4/letter/e/4af34b/32.png) [@ENugent](https://boards.straightdope.com/u/ENugent)\
**Post date:** [June 6, 2006, 6:05pm UTC](https://boards.straightdope.com/t/estate-tax-question/359626/4 "2006-06-06T18:05:23Z")

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[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.

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**Author:** ![Random](https://avatars.discourse-cdn.com/v4/letter/r/57b2e6/32.png) [@Random](https://boards.straightdope.com/u/Random)\
**Post date:** [June 6, 2006, 9:34pm UTC](https://boards.straightdope.com/t/estate-tax-question/359626/5 "2006-06-06T21:34:47Z")

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[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.