to worry about the right thing with property taxes | Personal finance
Those historically high limits are set to end in 2025, meaning that by 2026, the inheritance and gift tax exemption limits would drop to $ 5 million per person, adjusted for inflation. Biden wants the exemption to drop to $ 3.5 million per person.
People in some states already face lower limits. The 12 states that impose their own property taxes – Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington – and the District of Columbia have lower exemption limits than those from the federal government. Massachusetts and Oregon have the lowest exemption amounts, $ 1 million.
Six states – Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania – also levy inheritance taxes. Different tax rates and exemption limits apply, depending on the relationship between the heir and the deceased. Immediate family members generally pay the least or nothing, while distant relationships and non-relatives pay more.
What you need to do now: Keep good records
The idea of eliminating the base mark-up has been proposed in the past, but has met with headwinds in part because the practice benefits a wide range of voters.
Since there is no concrete proposal to change the step-up, there is not much that people can do to prepare for the change other than what they should be doing anyway. that is, keep careful records. It means ‘follow the basis’ of what they paid for all assets as part of the routine. estate planning.