Taxes in 2008

In Tax Thresholds for 2008, Est. Analyst (Jan. 2008), Robert L. Moshman covers some estate-planning related tax facts for 2008:

TOP ESTATE TAX RATE: * * * the estate tax was repealed in 2001 but we are in the seventh year of an eight-year phase-out. The top estate tax rate remains at 45% this year and through 2009 and applies to estate assets in excess of $1.5 million.

ESTATE TAX EXEMPTION: We remain at $2-million estate tax exemption for 2008, the third and final year at that level before increasing to $3.5 million in 2009. This could be modified by new tax legislation during 2008, of course. * * *

GENERATION-SKIPPING TRANSFER TAX: Also unchanged. Both the tax rate and exemption for estates continue to apply to the GST tax, i.e., 45% and $2 million.***

STATE DEATH TAX: The state death tax credit had been phased out. State death taxes are treated as a deduction. The number of states with some form of death taxes (24) seems to have stabilized. Some of these states have “decoupled” from the Federal approach.