The “Death Tax” or is it really a “Anti-Nobility Tax”?

“Under federal law, the tax, which is levied at a 40 percent rate, applies only to estates worth more than $5.45 million for individuals and $10.9 million for couples [i.e, the first 5.45 M are not taxed. Only the amount over 5.45M are taxed at 40%]. Estates worth less than that may be passed on to heirs tax-free.

“Last year, just 0.2 percent of estates of people who died were subject to the tax, according to estimates by the Tax Policy Center, a Washington-based research group that’s a joint venture of the Urban Institute and the Brookings Institution.

“In 2013, 120 of the 3,780 estates subject to the tax were farms and businesses, according to the Tax Policy Center. That’s a little more than 3 percent.

“The same year, estates valued above $20 million paid an average tax rate of 18.8 percent — many achieve a lower effective rate through tax-planning strategies, including giving some of their fortune away to charity.

Source: Bloomberg, Dec 9 2016