What deductions are available to reduce the Estate Tax?
Here is a list of allowable deductions that would reduce Estate Tax.
1. Marital Deduction:
One of the primary deductions for married decedents is the Marital Deduction. All property that is included in the gross estate and passes to the surviving spouse is eligible for the marital deduction. The property must pass "outright." In some cases, certain life estates also qualify for the marital deduction.
2. Charitable Deduction:
If the decedent leaves property to a qualifying charity, it is deductible from the gross estate.
3. Mortgages and Debt.
All of the decedents mortgage and credit card debt are allowable deductions from the gross estate of the decedent.
4. Administration expenses of the estate.
These expenses typically are 5-10% and court approved and they are considered as an allowable deduction from the gross estate of the decedent.
5. Losses during estate administration
These losses would stem from investments held and a reduction of value is sustained due to losses in the stock market. Other losses may have been incurred in liquidating investments that are included in the Gross Estate