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We've obtained the estate tax identification number from the client and now we're getting ready to file a New York estate tax return. The only asset of note is valued at $2 million. Do you have any recommendations in minimizing the estate tax in future years?


The BIDaWIZ Team's Answer:

Are you asking how to minimize estate tax for the client's heirs? If so, please note that the current New York estate tax exemption of $2.062 million will be increasing each year up until it reaches the federal estate tax exemption amount in 2019 which is projected to be $5.43 million per spouse (see table below). This figure may go up even further. The one caveat to this is that there's an estate tax cliff if a New Yorker's taxable estate exceeds the value of the basic New York exclusion amount by 5 percent or more. If this was the case, the entire taxable estate would be subject to New York estate tax (applied at graduated rates). In addition, any gifts provided within a three year period if client passes away between 2014 and 2019 would be added to the NY estate. However, since the property is currently worth $2M, we don't think there's an issue for the client. Of course, we need to know what the client's other assets are, but they should try to stay within the exemption amounts listed below.

New York Estate Tax Exemption
April 1, 2014 - March 31, 2015 - $2,062,500
April 1, 2015 - March 31, 2016 - $3,125,000
April 1, 2016 - March 31, 2017 - $4,187,500
April 1, 2017 - March 31, 2019 - $5,250,000
On or after January 1, 2019      Same as the federal exemption amount
References: New York TSB-M-14(6)M
State: New York

The BIDaWIZ Team



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