The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: estate tax||Date: 3/31/2001 10:44 PM|
|Author: qwerty2001||Number: 49384 of 124970|
If someone dies today with an estate of $685,000 then I think they would owe $3,700 in estate taxes. (37% of the amount over $675,000)
However, if they gave away $675,000 just before they died and used their lifetime exemption to avoid gift tax then they would die with a taxable estate of $10,000. I think the tax on an estate of $10,000 is quite low; less than 20%. So, the tax would be less than $2,000.
This would be a savings of more than $1,700.
I assume I am doing something wrong in my calculations. Could I be correct and you can save a little bit of estate taxes by using your lifetime exemption before you die?
Thanks for any help anyone can give me.
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