Budget Proposal Would Expand Federal Estate Tax

The recent State of the Union address that was delivered by the president included some insight into the budget that he was going to propose for 2016. This so-called blue book has been released, and we now know that an expansion to the federal estate tax is included in the budget proposal. Before we explain the proposed change, we should look back a few years so that you can understand the current state of affairs. At the end of 2010, a tax relief measure was passed, and it established a $5 million estate tax exclusion and a 35 percent top rate in 2011. An inflation adjustment was applied in 2012 that brought the exclusion up to $5.12 million. The exclusion is the amount that you can transfer before the estate tax would be applied. As a result, if the value of your estate is less than the exclusion, you would not face exposure. At the end of 2012, we were faced with the fiscal cliff dilemma. A compromise was reached in the eleventh hour, and the resultant legislation is called the Ame


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