What Is The Estate Tax?

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The estate tax is paid when someone receives wealth or assets from a deceased benefactor. IRS grants a cap of value of assets for the purpose of Estate Tax. Only the estates value beyond the cap is subject to estate tax and the IRS adjusts this cap each year to account for inflation.

?In 2023, the estate tax only applies to estates portion beyond $12.92 million for individuals and $25.84 million for married couples. This increases to $13.61 million and $27.22 million, respectively, in 2024.

As with all tax rates, Estate tax rates are?comparable?to income taxes, with brackets that scale from 18% to 40%. For example, on an estate worth $13 million,? the IRS would only collect taxes on $80,000 for the 2023 tax year, each $10,000 is subject to different tax bracket. On the other hand, if your asset is worth $12,92 million or less, the beneficiary will pay no estate taxes on that money.?

One important thing is note, revocble trust cannot avoid estate taxes.?