Cuomo Proposes Drastic Reduction in the New York Estate Tax!

Last week,  Andrew Cuomo proposed bringing New York into conformity with the liberalized Federal Estate Tax Regime, by 2019.  It’s not next year, but far better than a poke in the eye with a sharp stick.

The proposal would reduce the NY maximum marginal rate to 10% from 16%, and tie the NY Exemption to the Federal-now $5.34 million, and indexed for inflation (it went up $90k last year).  This is great news, since a person with a $5 million estate under current law owes the IRS nothing (assuming no lifetime gifts), and owes NY $391,600.

Of course, New Yorkers can take advantage of the fact that we don’t have a gift tax, and NY does not tax lifetime gifts.  So you can reduce the tax to NY even with large gifts when death is imminent.  Lifetime Gifts may reduce the amount of the NY $1 million exemption for estate taxes, but it will almost always be favorable.

The link below is to the comprehensive NY Times article on the topic, by Paul Sullivan on January 25th:

http://nyti.ms/1eYdgec 

 

Posted in Planning Opportunities, Status of Tax Legislation, The Tax Environment, WillPlan Blog.

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