Estate Tax Coalition

Key provisions of current law include:

  • A maximum estate tax rate is 40 percent, effective January 1, 2013. While this is an increase from 2012’s 35 percent, it is sharply lower than the 55 percent rate that could have taken effect absent the legislation. 
  • The law permanently maintains the $5 million exemption amount, indexed to inflation. As of 2016, the inflation adjust amount is $5.45 million.
  • Unification:  The estate and gift taxes are permanently unified. This establishes a single graduated rate schedule for both the estate and gift taxes, simplifying estate planning. 
  • Spousal portability:  The law permanently allows couples to transfer any unused exemption to the surviving spouse under simplified rules.   
  • No harmful offsets—preserves valuation discounts, grantor-retained annuity trusts (GRATs) and state estate tax deductibility.

 Congressional Action

What is the current legislative outlook for the estate tax?

The American Taxpayer Relief Act of 2012, was a bipartisan tax compromise package that was passed at the end of 2012 and included some estate tax relief provisions for our nation's family businesses.