What are the 2021 estate tax exemption amounts?
The estate tax exemption is the amount of money and other assets you can die owning and pay no estate tax. This number has been rising each year based upon a complicated inflationary formula. The bottom line is that we wait each year for the federal and state governments to provide us with these figures.
The federal estate tax exemption has gone up from $11,580,000 to $11,700,000. If you die in 2021 with more than this amount there is a 40% tax on the excess.
The New York estate tax exemption has gone up from $5,850,000 to $5,930,000. If you die in 2021 with more than this amount there is a tax. Furthermore, if you die this year with 5% more than this amount or $6,226,500, then you lose your entire exemption and will be taxed on the first dollar or close to 15%. OUCH! This is called the CLIFF TAX. If you die with more than this amount you fall over the cliff.
If you exceed either of these amounts, please talk to us about the various methods we suggest to lessen and/or eliminate your tax.
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