Calculating Federal Estate Tax

David Gomez and the Platinum Law Group provide bankruptcy counsel to clients. Besides bankruptcy, David Gomez and the Platinum Law Group also provide estate planning services to help clients reduce their estate tax burden. 

Estate tax is a form of tax paid by a decedent’s estate. It is often considered a tax on the right to transfer property to descendants or other heirs. It is imposed at the federal level, though some states also levy an estate tax. 

The estate tax due is calculated from the net value of a deceased person’s estate. First, the decedent’s gross estate is calculated by adding probate assets such as individual accounts and shares in property to non-probate assets such as IRAs and life insurance. Afterward, the gross estate figure is reduced by funeral expenses, estate administration expenses, and claims against the estate. Marital deductions and charitable deductions are also made. Afterward, taxable gifts are added and the result is the taxable estate value. It is to this figure that the estate tax rate is applied to calculate the estate tax liability.