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Will your Estate be Subject to Estate Taxes?

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    “Nothing is certain,” it’s said, other than “death and taxes.” While that may be so, it’s less clear how the near future will treat the nature of the taxes upon one’s death. The so-called “death tax” is the tax that must be paid by a decedent’s estate for privilege of passing the property he held at death on to one’s heirs. More exactly, as 26 USC 2033 reads:

    “The value of the gross estate shall include the value of all property to the extent of the interest therein of the decedent at the time of his death.”

    In very general terms, if a decedent owned it at death, it’s part of his or her gross estate. Absent an exclusion amount, it will currently be taxed at 35%.

    Thankfully, most taxpayers have an estate that is smaller than the “exclusion amount” — the amount that is excluded from being taxed on death. Presently, that amount is 5.12 million, as adjusted for inflation. This means that one dying with assets valued at less than that are not required to pay estate tax.

    However, unless Congress agrees to change the existing law within the next year, the exclusion amount will drop from 5.12 million to 1 million. Consequently, many more Americans could be become subject to an estate tax liability. For those in southern California, where the fair market value of one’s home starts at around $400K and rapidly moves upwards, half or more of their exclusion amount will be used up just trying to pass the house to the kids.

    The current uncertainty in the estate tax arena surrounds Congress’ perceived unpredictability. It’s not known whether it will extend the 5 million exclusion amount, decrease it or, as some recent candidates have mentioned, repeal the entire estate tax. This is a class warfare issue and many republicans and democrats have polar opposite views in this area.

    There are a multitude of lawful strategies for avoiding or minimizing estate taxes, however, and that’s something our office may be able to help with.

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    Representing Clients from U.S. and International Locations Regarding Federal and California Tax Issues

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    Orange County
    2601 Main St. Penthouse Suite
    Irvine, CA 92614
    (949) 681-3502

    Our headquarters is located in Irvine, CA. Our beautiful 19,700 office space is staffed full-time and always available for our clients to meet with our highly qualified and experienced staff of Attorneys, Certified Public Accountants and Enrolled Agents. We also offer virtual consultations and can travel to meet with clients in one of our satellite offices.

    Outside of our 4 hour initial consultation option, we do not charge travel time or travel expenses when traveling to one of our Satellite offices, or surrounding business districts, where it is necessary to meet personally with taxing authority personnel, make court appearances, or any in person meeting deemed necessary for the effective representation of a client. To make this as flexible, efficient, and convenient as possible, David W. Klasing is an Instrument Rated Private Pilot and Utilizes the Firms Cirrus SR22 to service client’s in California and in the Southwest by air. Offices outside these areas are serviced via commercial jet airlines. None of these costs are charged to our clients.

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