marital deduction


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marital deduction

n. when one spouse dies, the survivor may take a tax deduction of half of the value of the estate of the dying spouse. Thus, the minimum value of the estate before there is a possible federal estate tax rises from $600,000 to $1,200,000 at the death of the first spouse to die. In trusts which a married couple creates, they can agree that on the death of the first to go, the amount of the property which is given to the survivor is limited to the amount which will not be subject to federal estate tax, thus delaying some or all estate tax until the death of the surviving spouse. Such trust provisions should be written only by an attorney and with consultation with an accountant or financial adviser. (See: community property, estate tax, trust)

References in periodicals archive ?
This part covers estate tax planning techniques, including the marital deduction and the use of various types of trusts.
The interest of a donee spouse in a joint and survivor annuity in which only the donor and donee spouses have a right to receive payments during such spouses' joint lifetimes is treated as a "qualifying income interest for life" for which the marital deduction is available unless the donor spouse irrevocably elects otherwise within the time allowed for filing a gift tax return.
According to the notice, to the extent that the applicable exclusion amount from estate or gift tax was applied to a transfer between spouses that did not qualify for the marital deduction for federal estate or gift tax purposes at the time of the transfer solely because of DOMA, taxpayers will be permitted to establish that the transfer qualified for the marital deduction and recover the applicable exclusion amount previously applied on a return because of the transfer, even if the statute of limitation for that return under Sec.
One of the first lines on a tax return is the Filing status, which can tell its whether our client qualifies for the estate taxes "unlimited marital deduction.
The plaintiff argued that the trust settlor had created the trusts primarily for estate tax purposes--so that he could pass the property to his wife and take advantage of the marital deduction, while ultimately leaving the property to his daughter.
On the estate tax return, the 100 percent interest was valued at $2,834,033, and a marital deduction was claimed for 51 percent of such amount, or $1,445,357.
Answer--The first is for the testator to leave a specific dollar amount bequest; however, this technique is not recommended since it is impossible, in most cases, to arrive at a dollar amount that will exactly equal the desired marital deduction at the time of the grantor's death with any degree of accuracy.
Reality: To be eligible for the marital deduction, the QTIP must, among other things, provide the income beneficiary (surviving spouse) with all of the income of the trust, at least annually, for life.
When the practitioner is confronted in the preparation of the United States Estate Tax Return (Form 706) by a three-way JTWROS ownership of property involving a decedent spouse, two issues must be addressed: (1) the extent to which the JTWROS property is includable in the decedent spouse's gross estate; and (2) the amount of such property, if any, which is eligible for the Federal estate tax marital deduction in the decedent spouse's gross estate.
gift tax marital deduction, only a set amount each year ($120,000 in 2006) may be gifted free from U.
The value of all other items includible in the gross estate that qualify for the marital deduction.
A decedent's estate tax liability is based on the decedent's taxable estate, which is the gross estate minus various deductions, which include a deduction for any debts of the estate and a marital deduction for which a valid qualified terminable interest property (QTIP) election is made.