new thresholds go into effect april 1 for ny estate taxes (New York: 2015, suite)

[mathjak107]

for those it applys to ny is getting another raise in the estate tax threshold as of april 1st.

you can now pass a bit over 3 million tax free to heirs


January 1, 2014 April 1, 2014 $1,000,000
April 1, 2014 April 1, 2015 $2,062,500
April 1, 2015 April 1, 2016 $3,125,000
April 1, 2016 April 1, 2017 $4,187,500
April 1, 2017 January 1, 2019 $5,250,000
April 1, 2017 January 1, 2019 $5,250,000

BUT AND THIS IS A BIG BUT:

there is a tax cliff built in . if you go over you don't get any of the exclusion amount at all . the entire estate is taxable. it isn't like just the overage is taxable.


here is a worst case example , although it follows suite for the lower limits before we get this high.

To understand the impact of this new estate tax cliff, consider the hypothetical example of a New York resident who dies on December 1, 2018 with a taxable estate valued at $5,512,500. Because the value

of the estate would exceed the basic exclusion amount of $5,250,000 in effect at that time by 5%, the entire estate would be subject to New York estate tax. This example results in a New York estate tax of $452,300, even though the estate exceeds the basic exclusion amount by only $262,500.


this is an insane tax cliff and you have to wonder why wealthy politicians left it in place. you actually have to make a charitable donation of the excess to come out ahead.