The taxable estate of a decedent is determined by deducting value of mortgages and other debts from the added current value of every asset which was owned by the decedent and is part of his or her estate.
Taxable gifts after 1976 and before 2004, which are not covered by the federal gift tax annual exclusion, charitable deduction or marital deduction are included in a taxable estate for the purpose of determining the amount that has to be paid as estate taxes.
If the amount exceeds $2 million, beneficiaries are liable to pay estate tax.
Estate tax is paid primarily by the estate and not the individual beneficiaries.
In 1976, taxes on estate and gift taxes were unified into a single system and remained unified even today.
The accumulated taxable gifts made by an individual during his life were liable for the calculation of gift taxes.
Taxes on estate taxes were calculated on the decedent taxable estate at death, reduced by gift taxes paid post -1976.
Important things you will need to when calculating taxes on the estate is proper information on taxes, internet access and determination of the due date of state taxes.
The IRS website should be visited to confirm the time allotted to pay the estate taxes.
The taxes on estates have to be paid within 9 months after the death of an individual.
Before an individual's death, the person should check to find out if additional state taxes are due in his state of domicile, and this should be planned with caution.
Early calculation of the estate's value will be quite helpful as it will not be a worrying factor after the individual's death as the estate executor will know how much taxes is due.
Also adding up an insurance policy to cover the value of the tax may be a boon for paying taxes on the estate.