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December 01, 2021 at 11:30 AM
Related: 17 States With Their Own Estate, Inheritance Taxes
The U.S. Internal Revenue Service recently published federal estate tax data for tax year 2020, which showed that 1,275 U.S. taxpayers paid $9.3 billion in estate taxes after allowable deductions and state death tax deductions.
Filing an estate tax return involves an accounting of everything a decedent owns or has certain interests in at death, determined by fair market value of these items. The total is the gross estate. Estate tax returns were filed for 3,441 people in 2020 with gross estates worth a total of $122 billion.
Once calculated, deductions from the gross estate are made to arrive at the decedent’s taxable estate. These include the estate and gift tax exemption, which was $11.58 million per inidividual in 2020 and $11.7 million in 2021. The exemption, adjusted annually for inflation, will be $12.06 million per individual in 2022.
After the net amount is computed, the value of lifetime taxable gifts is added to this number, and the tax is computed.
See the gallery for the 15 states with the highest total net estate taxes paid in tax year 2020.
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