The Alternate Valuation Date is a date six months after the date of a person's death. For estate tax purposes, the executor may choose to place a value on the estate either as of the date of death or on the alternate valuation date. To use the alternative valuation date, the estate value and tax must be less than on the date of death.
The term 'Death Tax' is commonly used to refer to state inheritance taxes, though it is frequently conflated with estate taxes. It represents the taxation imposed on the transfer of wealth upon an individual's death.
The estate tax is a levy on the total value of a decedent's estate, including all real, tangible, and intangible property, minus any liabilities. This tax is levied by the government based on the estate's fair market value at the time of death. The amount due may be reduced by applying available credits and exemptions. Comprehensive knowledge of federal and state tax laws is necessary for accurate calculation and assessment.
The gift tax is a graduated excise tax levied on the donor of a gift by the federal government and most state governments, which comes into play when assets are transferred from one person to another.
Incident of ownership refers to an element of ownership or degree of control over property, which can impact the tax treatment of transferred property, especially in the context of estate taxes.
Income redistribution refers to the manner in which personal income is spent across different classes in society. It involves programs and policies aimed at reducing income inequality by shifting wealth from the richer segments of society to the poorer segments.
Inheritance refers to real or personal property that is received by heirs. It generally includes property passed by will, and while the estate itself may be subject to federal estate tax, the recipient typically does not owe federal income tax on the inheritance.
The lifetime exemption pertains to the total amount of gifts and estate transfers one can make without incurring federal gift or estate taxes.
Net Estate is the portion of a decedent's estate that is subject to estate tax after all allowable deductions such as debts, funeral expenses, and administration costs have been subtracted from the gross estate.
A method of owning real estate, which affects income tax, estate tax, continuity, liability, survivorship, transferability, disposition at death and at bankruptcy. Ownership forms include various structures with different legal and financial implications.
A Qualified Terminable Interest Property (Q-TIP) Trust is an estate planning tool that ensures the surviving spouse receives income from the trust's assets while retaining control for the deceased spouse over the distribution of the assets upon the surviving spouse's death.
Revocable transfers are property transfers that can be rescinded or revoked by the transferor, resulting in the property being included in the transferor's gross estate upon death.
Taxable estate refers to the portion of a deceased person's estate that remains after deducting any allowable marital deductions, charitable contributions, and other adjustments from the adjusted gross estate. This amount is subject to estate taxes.
Transfer tax is a tax paid upon the passing of title to property or to a valuable interest. This tax can apply to real estate transactions and certain financial transactions.
