Navigating the intricate world of estate taxes can be daunting. It’s essential to understand which assets count toward the estate tax and whether or not you owe anything. With the threshold for 2023 being $12.92 million ($25.84 million for married couples), it’s more important than ever to be informed. Let’s delve into this topic further.
Assets That Count Towards Estate Tax
As a Tampa estate lawyer, I often meet clients with misconceptions about what assets are included in the estate tax calculation. Here’s a concise breakdown:Â
- Real Estate Property: This includes primary residences, vacation homes, and investment properties.
- Financial Assets: Bank accounts, stocks, bonds, and other investments.
- Business Interests: Ownership in a business, whether it’s a sole proprietorship, partnership, or shares in a corporation.
- Life Insurance Proceeds: If you own a life insurance policy upon your death, the proceeds can be included.
- Retirement Accounts: This encompasses 401(k)s, IRAs, and other retirement savings.
- Tangible Personal Property: Artworks, jewelry, cars, and other valuable tangible assets.
Remember, it’s the gross value of these assets, minus allowable deductions like mortgages and other debts, that counts towards your estate tax.
Understanding the 2023 Threshold and Lifetime Gifts
For 2023, the gift and estate tax exemption stands at $12.92 million for individuals and doubles for married couples ($25.84 million). But there’s a catch. Lifetime gifts that do not fall under the annual exclusion will reduce the available gift and estate tax exemption at your time of death.
For instance, if you gave away $1 million during your lifetime that didn’t qualify for the annual exclusion, your exemption amount at death would be $11.92 million (or $24.92 million for a married couple).
Do I Owe Anything?
If your estate’s value surpasses the exemption limit after considering lifetime gifts, your estate may owe taxes. The specifics of tax rates and potential owed amounts can vary, so it’s critical to consult with an estate lawyer to get a clear picture.
Contact Us for Guidance
Estate tax laws are multifaceted, and the stakes are high. As experienced Tampa estate lawyers, our commitment is to provide personalized advice, ensuring that you have a clear understanding of your assets and potential tax obligations.
If you have any questions or require assistance in navigating estate tax intricacies, please don’t hesitate to reach out. Contact us today at (813) 438-8503 to schedule a consultation, and be sure to mention this article for a comprehensive overview.