Federal estate tax with OBBBA permanent high exemption. Annual gift exclusion. Portability (DSUE). Marital deduction. State estate tax exposure. 40% rate on amounts above exemption.
Total fair market value of all assets at death: real estate, investments, business interests, retirement accounts (IRAs/401(k)s), life insurance (if in estate), personal property.
Mortgages, other debts, funeral expenses, estate administration costs. Deductible from gross estate. IRC 2053.
Assets passing to US citizen spouse. Unlimited marital deduction - fully deducted from taxable estate. IRC 2056. Defers but does not eliminate estate tax.
Amounts passing to qualifying charities. Unlimited charitable deduction. IRC 2055.
Cumulative taxable gifts made during lifetime (above annual exclusions). Added back to estate to determine tax rate bracket. IRC 2001(b).
Portability: unused exemption of a deceased spouse, elected on Form 706 within 5 years of death (Rev. Proc. 2022-32 extended deadline). IRC 2010(c)(4).
Number of individuals receiving annual exclusion gifts. 2026 annual exclusion: $19,000 per donee (estimated; 2025 was $19,000). IRC 2503(b).
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