What is an Estate Tax? Estate Tax is a tax on your right to transfer property at your death. As per the IRS, Estate Tax consists of an accounting of everything you own or have certain interests in at the date of death. This is known as your “Gross Estate”. Certain expenses such as mortgages, estate administration, and qualified charities are deducted to determine your “Taxable Estate”. Not all estates are taxable. Some estates are tax exempt.
What is the Estate Tax Exemption? The Estate Tax Exemption will increase to $5,340,000 next year (2014) from $5,250,000 this year (2013). This means that if your buildings’ Fair Market Value is more than the $5,340,000 threshold in 2014, your building will be subject to an Estate Tax of 40%.
When is the Estate Tax Due? The Estate Tax return is due nine months after the date of death. A six month extension is granted if the extension is requested before the original Estate Tax return due date.
Who determines Fair Market Value? As per Regulation §20.2031-1, Fair Market Value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. There are very few companies that provide complimentary evaluations of buildings like Goldenwood Property Advisors.
Alex S. Isak
Director of Sales | Upper West Side
Goldenwood Property Advisors, Inc.