- 1797: Stamp Act
- 1802: Repealed
- 1862: Civil War
- 1870: Repealed
- 1898: Spanish American War
- 1902: Repealed
- 1916: WW1
- 1924: 1930’s, 1976 – 1993 (9 Acts)
- 2001: EGTRRA
Tax Relief Act of 2001: Estate and Gift Tax
- Increased Unified Credit
- Reduced estate tax rates
- Segregate estate and gift tax
- Basis issues
- Increased qualified plan/Ira contribution and benefit limits
- Sunset provision: 1/1/2011
| Year |
Highest Estate, GST & Gift Tax Rate |
Estate Tax Applicable Exclusion Amt. |
Gift Tax Applicable Exclusion Amt |
GST Tax Applicable Exclusion Amt |
Noteworthy Changes |
| 2001 | 55% + 5% surtax | $675,000 | $675,000 | $1 million | Surtax applies only to estates above $10,000,000 and below $17,184,000 |
| 2002 | 50% | $ 1 million | $1 million | $1 million | The decrease in rates should allow taxpayers who have used their unified credit to make gifts in excess of its $325,000 increase. 2001 state death tax credit reduced by 25%; 5% surtax repealed |
| 2003 | 49% | $1 million | $1 million | $1 million | 2001 state death tax credit reduced by 50% |
| 2004 | 48% | $1.5 million | $1 million | $1.5 million | Consider “freezes or other techniques which do not require payment of gift tax. 2001 state death tax credit reduced by 75%; QFOB deduction repealed. |
| 2005 | 47% | $1.5 million | $1 million | $1.5 million | State death tax credit repealed; deduction for state death taxes through 12/31/2010 |
| 2006 | 46% | $2 million | $1 million | $2 million | 1% decrease in transfer tax rate and $500,000 increase. |
| 2007 | 45% | $2 million | $1 million | $2 million | 1% decrease in transfer tax rate |
| 2008 | 45% | $2 million | $1 million | $2 million | |
| 2009 | 45% | $3.5 million | $1 million | $3.5 million | Applicable Exemption Amount for estate and GST increases significantly (Backloaded Tax Relief), but fit exemption stays at $1 million. |
| 2010 | 0% 35% gift | N/A(no tax) | $1 million | N/A (no tax) | Modified carryover basis rules apply (see below); subject to some exceptions, a transfer to a trust will be treated as a taxable gift unless the trust is a grantor trust. |
| 2011 | 55% + 5%surtax | $1.3 million* | $1 million | $1.3 million* | Sunset provision applies so current law reinstated, unless Congress takes further action.Surtax applies to estates. |
* Pre-reform $1 million applicable exclusion amounts, adjusted for inflation. (Approximate)
Modified carryover basis rules include the following provisions:
- Executor can elect to increase basis of estate assets by up to $3 million for property that is passed to a surviving spouse or to a qualifying QTIP trust.
- Executor can elect to increase basis of estate assets by up to $1.3 million for property that is passed to anyone.
- All property in excess of $1.3 million or $4.3 million takes as its basis the lesser of the following: a) the transferor’s adjusted basis or b) the FMV on the date of the descendant’s death.