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CCH can assist you with stories, including interviews with CCH subject experts. Also, the 2012
CCH Whole Ball of Tax
is available in print. Please contact:
 
Leslie Bonacum
(847) 267-7153
mediahelp@cch.com
 
Eric Scott
(847) 267-2179
eric.scott@wolterskluwer.com

Visit the CCH Whole Ball of Tax site often as new releases and other updates will be posted throughout the tax season.

CCH provides special CCH Tax Briefings on key topics at CCHGroup.com/Legislation.

 
2012 CCH Whole Ball of Tax
Release (32) | Back to WBOT

2012 CCH Whole Ball of Tax

Contact:
Leslie Bonacum
, 847-267-7153, mediahelp@cch.com
Eric Scott, 847-267-2179, eric.scott@wolterskluwer.com

Historical Look at Estate and Gift Tax Rates 

MAXIMUM ESTATE TAX RATES (1916 – 2013)  

In effect from September 9, 1916, to March 2, 1917

10% of net estate in excess of $5 million

In effect from March 3, 1917, to October 3, 1917

15% of net estate in excess of $5 million

In effect from October 4, 1917, to 6:55 p.m. EST, February 24, 1919

Basic estate tax of 15% of net estate in excess of $5 million plus war estate tax of 10% of net estate tax in excess of $10 million

In effect from 6:55 p.m. EST, February 24, 1919, to 10:25 a.m. EST, February 26, 1926

25% of net estate in excess of $10 million

In effect after 10:25 a.m. EST, February 26, 1926, to 5 p.m. EST, June 6, 1932

20% of net estate in excess of $50 million*

In effect from 5 p.m. EST, June 6, 1932, to May 10, 1934

45% of net estate in excess of $50 million*

In effect from May 11, 1934, to August 30, 1935

60% of net estate in excess of $50 million*

In effect from August 31, 1935, to June 25, 1940

70% of net estate in excess of $50 million*

Estates of decedents dying after June 25, 1940, but before September 21, 1941

70% of excess of net estate over $10 million* plus a defense tax of 10% of the total tax computed under the basic and additional estate taxes (in effect, maximum tax was 77%)

Estates of decedents dying after September 20, 1941, but before August 17, 1954

77% of excess of net estate over $10 million*

Estates of decedents dying after August 16, 1954, but before 1977

77% of excess over $10 million

Estates of decedents dying after 1976 but before 1982

70% of excess over $5 million

Estates of decedents dying in 1982

65% of excess over $4 million

Estates of decedents dying in 1983

60% of excess over $3.5 million

Estates of decedents dying after 1983 and before 1988

55% of excess over $3 million

Estates of decedents dying after 1987 and before 1998

55% of excess over $3 million (effectively 60% for estates in excess of $10 million but less than $21,040,000 because of a surtax to phase out benefits of the graduated rates and unified credit)

Estates of decedents dying in 1998 through 2001

55% of excess over $3 million (effectively 60% for estates in excess of $10 million but less than $17,184,000 because of surtax to phase out benefits of only the graduated rates)

Estates of decedents dying in 2002

50% of excess over $ 2.5 million**

Estates of decedents dying in 2003

49% of excess over $2 million

Estates of decedents dying in 2004

48% of excess over $2 million

Estates of decedents dying in 2005

47% of excess over $2 million

Estates of decedents dying in 2006

46% of excess over $2 million

Estates of decedents dying in 2007 and 2008

45% of excess over $2 million***

Estates of decedents dying in 2009

45% of excess over $3.5 million

Estates of decedents dying in 2010

35% of excess over $5 million and stepped-up basis for inherited assets, or election for no estate tax, but carryover basis for inherited assets****

Estates of decedents dying in 2011

35% of excess over $5 million*****

Estates of decedents dying in 2012

35% of excess over $ 5,120,000 (as adjusted for inflation) *****

Estates of decedents dying in 2013

55% of excess over $3 million (effectively 60% for estates in excess of $10 million but less than $17,184,000)******

For Estate Taxes:

* Estate tax was composed of a basic estate tax plus an additional estate tax; in effect, estates never paid more than the amount of the additional estate tax.

** Beginning in 2002, the surtax on estates in excess of $10 million is repealed. In addition, the maximum estate tax rate began to decrease, while the applicable exclusion amount for estate tax purposes (i.e., the lifetime amount shielded from estate tax) began to increase. During the years 2002 through 2009, the estate tax applicable exclusion amount was $1 million in 2002 and 2003, $1.5 million in 2004 and 2005, $2 million in 2006 through 2008, and $3.5 million in 2009.

*** Although the estate tax rate schedule for 2007 through 2009 (Code Sec. 2001) shows the 45% rate being imposed on estates in excess of $1.5 million, the estate tax applicable exclusion amount effectively precludes taxation of any transfers in an amount below $2 million in 2006 through 2008 and $3.5 million in 2009.

**** The Tax Relief, Unemployment Reauthorization and Job Creation Act of 2010, reinstates the estate tax effective for decedents dying after December 31, 2009. However, the Tax Relief Act of 2010 also provides an election for the estates of decedents dying in 2010 to use the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) rules of no estate tax, but a carryover basis for inherited assets. Accordingly, few estates of decedents dying in 2010 will actually be subject to the estate tax . In addition, although the estate tax rate schedule for 2010 through 2012 (Code Sec. 2001) shows the 35% rate being imposed on estates in excess of $500,000, the estate tax applicable exclusion amount effectively precludes taxation of any transfers in an amount below $5 million in 2010 and 2011, and $5,120,000 in 2012.

***** Beginning in 2011, the Tax Relief Act of 2010 allows a surviving spouse to utilize the unused portion of the applicable exclusion amount (as otherwise increased under the Act) of his or her last predeceased spouse. An election by the predeceased spouse’s estate is required.

****** The Tax Relief Act of 2010 reinstates the estate tax at a lower rate and a higher exclusion amount than would have been the case if the sunset called for under EGTRRA had occurred. However, the Tax Relief Act of 2010 only applies to estates through 2012. It will sunset in 2013, leaving the law as if EGTRRA and the Tax Relief Act of 2010 had never been passed. Accordingly, the applicable exclusion amount for estate tax purposes would then be $1 million.

MAXIMUM GIFT TAX RATES (1924 – 2013)

1924-1925

40% on transfers in excess of $10 million over the course of the donor’s lifetime

June 7, 1932-1934

33.5% on transfers in excess of $10 million over the course of the donor’s lifetime

1935

45% on transfers in excess of $10 million over the course of the donor’s lifetime

1936-1940

52.5% on transfers in excess of $50 million over the course of donor’s lifetime

1941

52.5% on transfers in excess of $50 million over the course of the donor’s lifetime, plus a defense tax of 10% of the total tax computed (in effect, maximum tax was 57.75%)

1942-1976

57.75% on transfers in excess of $10 million over the course of the donor’s lifetime

1977-1981

70% of transfers in excess of $5 million over the course of the donor’s lifetime

1982

65% of transfers in excess of $4 million over the course of the donor’s lifetime

1983

60% of transfers in excess of $3.5 million over the course of the donor’s lifetime

1984-1987

55% of transfers in excess of $3 million over the course of the donor’s lifetime

1988-1997

55% of transfers in excess of $3 million over the course of the donor’s lifetime (effectively 60% for transfers in excess of $10 million but less than $21,040,000 because of a surtax to phase out the benefits of the graduated rates and unified credit)

1998-2001

55% of transfers in excess of $3 million over the course of the donor’s lifetime (effectively 60% for transfers in excess of $10 million but less than $17,184,000, because of a surtax to phase out the benefits of only the graduated rates)

2002

50% of transfers in excess of $ 2.5 million over the course of the donor’s lifetime

2003

49% of transfers in excess of $2 million over the course of the donor’s lifetime

2004

48% of transfers in excess of $2 million over the course of the donor’s lifetime*

2005

47% of transfers in excess of $2 million over the course of the donor’s lifetime

2006

46% of transfers in excess of $2 million over the course of the donor’s lifetime

2007-2009

45% of transfers in excess of $1.5 million over the course of the donor’s lifetime

2010

35% of transfers in excess of $1 million over the course of the donor’s lifetime**

2011

35% of transfers in excess of $5 million over the course of the donor’s lifetime***

2012

35% of transfers in excess of $5,120,000 (as adjusted for inflation)
over the course of the donor’s lifetime***

2013

55% of transfers in excess of $3 million over the course of the donor’s lifetime (effectively 60% for transfers in excess of $10 million but less than $17,184,000)****

 For Gift Taxes:

* Beginning in 2004, the applicable exclusion amount for gift tax purposes (i.e., the lifetime amount shielded from gift tax) differed from the amount used for estate tax purposes. During the years 2002 through 2010, the gift tax applicable exclusion amount remained constant at $1 million, while the estate tax applicable exclusion amount was $1 million in 2002 and 2003, $1.5 million in 2004 and 2005, $2 million in 2006 through 2008 and $3.5 million in 2009.

** Although the gift tax rate schedule for the years 2010 through 2012 (Code Sec. 2502) shows the 35% rate being imposed on transfers in excess of $500,000, the gift tax applicable exclusion amount effectively precludes taxation of any transfers in an amount below $1 million in 2010, $5 million in 2011, and $5,120,000 in 2012.

*** Beginning in 2011, the Tax Relief Act of 2010 allows a surviving spouse to utilize the unused portion of the applicable exclusion amount (as otherwise increased under the Act) of his or her last predeceased spouse. An election by the predeceased spouse's estate is required.

**** The Tax Relief Act of 2010 lowered the top tax rate and increased the exclusion amount to $5 million compared to what would have been the case if the transfer tax provisions of EGTRRA had been allowed to sunset as planned. However, the Tax Relief Act of 2010 only applies to gift taxes through 2012. It will sunset in 2013, leaving the law as if EGTRRA and the Tax Relief Act of 2010 had never been passed. Accordingly, the applicable exclusion amount for gift tax purposes would then be $1 million.

SOURCE: CCH, 2012

Permission for use granted

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