The 2018 federal estate tax exemption changed as a result of the Tax Cuts and Jobs Act. So, in very brief summary, if the gross value of a person’s estate is less than the the estate tax exemption the year the person dies, their loved ones avoid paying federal estate taxes entirely.
Federal Tax Law Changes
Before January 1, 2018, an exemption up to $5.49 million per person existed. Spouses could transfer a total of $10.98 million. And transfers larger than that were taxed at a rate of 40 percent. Now and through the end of 2025 at least, the federal estate tax exemption is roughly $11.2 million per person, adjusted each year for inflation. Spouses? When a surviving spouse eventually passes, the total transfer permitted before federal estate taxation is $22.4 million. The 40 percent tax rate for anything over the exempted amount still remains, but the exemption amount essentially doubles.
Needless to say, that’s a pretty huge difference.
Plus, The Step-Up Rule Remains
The federal tax law changes didn’t even do away with the step-up. So, even with the exemption essentially doubled, heirs still aren’t responsible for a capital gains tax on the appreciation in the value of the estate that happened before it became theirs. What does that mean? Essentially, all the years of appreciation prior to the transfer to an heir will remain untaxed forever.
Do You Need A California Realtor Specializing In Probate?
We are experts in the probate sale under the probate code and trust law. So, we know the California Probate Code. We won’t let you get lost in it. If you need a realtor in California specializing in probate, please contact us today! We are upfront and honest about the costs of probate. Everyone wants to know about probate fees, but no one wants to talk about them. We will though. Sentinel Realty Partners wants our clients to be fully prepared and fully informed about buying or selling California probate real estate.
We have a list of the absolute best probate lawyers in California available for our customers. Plus, we also have relationships with the most vetted contractors, plumbers and electricians in California. See? We will guide you through every step of the process of selling (or even purchasing) a home involved in probate.
If you are buying a home in California, please have a look at our probate property search. If you need a Los Angeles, Orange County, Riverside, or San Bernardino professional to help you through the probate real estate maze, call us! These waters a murky, and you’ll want a knowledgeable, dependable, responsive team behind you. Check out Sentinel Realty Partners’ client reviews.