NY Estate Tax Return
The laws surrounding estate tax are constantly changing. For example, the federal estate tax exemption amount had been $3,500,000 in 2009. The federal estate tax was repealed on 1/1/10 until 12/31/10. Beginning 2011, the federal estate tax was reinstated. The exemption amount under the most current Federal law is in excess of $5,000,000 and slowly increasing due to inflation indexing.
The New York estate tax exemption of $1,000,000 was replaced in April 2014 with an exemption of over $2,000,000 which is scheduled to increase to approximately $6,000,000 by 2019.
It would not be surprising to New York estate attorneys if both the Federal and New York estate tax laws are the subject of additional changes in the coming years. Since these taxes do produce revenue for the taxing authorities it is unlikely that they will be repealed despite ongoing calls for their elimination.
In New York, an estate tax return needs to be filed if the value of the decedent's gross estate is in excess of the exemption amount that is in effect on the decedent's date of death. In order to determine whether an estate tax return needs to be filed or taxes paid, the value of the decedent's gross estate needs to be determined. Among the services that a Brooklyn estate lawyer or other New York estate professional provides is the collection and valuation of estate assets.
Typically, I work with executors and administrators to obtain date of death values from banks as well as values of stocks and bonds that a decedent may have owned at death. Very often it is necessary to hire appraisers to value certain items such as real estate or interests in businesses that do not have publicly traded stock. All of these values must be reported on an estate tax return. Moreover, it is important to obtain date of death values even if an estate tax return is not required to be filed. The income tax basis of assets owned by a decedent is generally equal to its value as of the time of death. Thus, if the asset is going to be sold by the estate fiduciary or a beneficiary, the income tax gain needs to be determined by using the stepped-up date of death tax basis.
The estate tax principals relating to valuation of assets in an estate can have an important role in preparing a person's estate planning and strategy. As can be seen estate and income taxes are closely related and effective planning and estate administration may have a financial benefit to the beneficiaries of a decedent's assets.
Regardless of the size of an estate, most adults — young and old — and their families benefit greatly from having a well-prepared estate plan consisting of documents such as a: Last Will, Health Care Proxy, Power of Attorney and Living Will. I have many years of experience working with and advising clients in the creation and implementation of plans that effectively express the clients’ personal desires regarding the disposition and protection of assets while providing potential tax advantages and security for family and beneficiaries.
If you're interested in learning how to minimize your estate tax, please come in to my office for a free consultation and meet with me to discuss your options. To contact my office located in Manhattan call (212) 355-2575.