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Wednesday, September 05, 2007


According to the Summer 2007 of the IRS Statistics of Income, a significant reduction in federal estate tax returns has occurred in the new millennium.

The total number of estate tax returns filed fell by 58 percent to about 45,000 in 2005 from about 108,000 in 2001. The total amount of assets represented by these returns also fell but by far less. Total gross estate (assets) on these returns fell by 14 percent to $185 billion in 2005 from $216 billion in 2001. Meanwhile, net estate taxes reported on these returns declined by even less, only 8 percent.

The reduction in returns filed is due to the steady increase in the unified credit equivalent amount allowed for federal estate taxes from $600,000 to $1.5 million for decedents dying in 2005. Since estates with less than the available credit equivalent in assets do not need to file, increases in the credit result in few returns.

It is likely that this trend will continue as the exemption continues to grow (through 2009). The current credit equivalent amount is $2 million.

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