We would like to thank our neighbors in Scarsdale for visiting our website. If you are looking for a licensed estate planning attorney in New York, you have found a reliable local resource. Located in Westchester County, Scarsdale has a population of a little over 17,000. Scarsdale is known for its imposing Tudor and colonial homes. Some are originals and some are new, but they all provide a regal and historical feel to the community.
A community of astonishing residences
In Scarsdale, the median sales price in 2017 for a single-family residence is $1.4 million, which is more than double the Westchester County median of $566,300. It should not be surprising that property taxes are equally steep. For example, a 5 bedroom, 3 bathroom house sitting on more than an acre in Fox Meadow, listed at $2.25 million, would incur property taxes of approximately $25,223.
Many of these amazing homes, though are renovations. According to Scarsdale’s building inspector, most new construction involves an original house that has been torn down with two homes built in its place.
Scarsdale has become more upscale
According to one resident, John McCann, the town has become more upscale. McCann, vice president of sales at Fox Business Network, returned to the community in 1995 to raise his family in his childhood six-bedroom 1920s colonial home. McCann remembers that the neighborhood used to be home to people with various types of jobs, but now it is filled mostly with doctors, lawyers and members of Wall Street.
What you will find in Scarsdale
Scarsdale is located between Greenburgh, White Plains, Mamaroneck, and New Rochelle and Eastchester, with five neighborhoods; each with five elementary schools. The residences located in Fox Meadow and Greenacres are highly sought-after by commuters because, as most who live in New York suburbs know, “proximity to the train is a tremendous selling point.”
Scarsdale estate planning lawyer explains gift and estate tax exclusion
There are some rather complicated tax laws that you should understand when you are planning your estate as a high net worth individual. In this post, we will look at the transfer taxes that exist, and we will examine the question that serves as the title of the post. Let our Scarsdale estate planning lawyer explain the Gift and Estate Tax Exclusion and how it works.
Federal Estate Tax and the Exclusion
The federal estate tax looms large for those who have been able to accumulate a significant store of wealth. In 2017, the amount of the federal estate tax exclusion or credit is $5.49 million. A base of $5 million was put into place for the 2011 calendar year, and there have been ongoing adjustments to account for inflation ever since. The exclusion allows you to transfer as much as $5.49 million tax-free. Anything that you bequeath that exceeds this amount is potentially subject to the federal estate tax. The maximum rate of the death levy is 40 percent.
Estate and Gift Tax Exclusions are Unified
The estate tax is unified with the gift tax. The $5.49 million exclusion of which we speak is a unified exclusion. It applies to the combination of taxable gifts that you give while you are living along with the estate that you are leaving behind to your heirs.
Federal Gift Tax and the Exclusion
When you hear about the federal estate tax, you may get a bright idea: you could just give gifts to the people on your inheritance list while you are living to avoid the death tax. People used to be able to do this when the estate tax was first enacted in 1916. Tax advocates did not like this loophole, so the gift tax was enacted in 1924. After a brief repeal, it reappeared in 1932, and it has been a fact of life ever since.
In addition to the $5.45 million unified lifetime exclusion, there is also an annual per person federal gift tax exclusion. This exclusion allows each taxpayer to give up to $14,000 to an unlimited number of gift recipients free of taxation. There is no limit to the total amount that you can give tax-free each year using this exclusion, but you can’t give more than $14,000 to any one person.
Is there a difference between gifts and bequests?
It makes sense to use the $14,000 annual per person gift tax exclusion to give gifts while you are living. When it comes to the unified lifetime exclusion, there is really no benefit to lifetime gifting, because you are reducing the exclusion that will remain after you die to apply to your estate.
However, you would want to consider giving lifetime gifts using your lifetime exclusion if you were aware of the fact that the exclusion was going to be reduced in the future. For example, the White House has proposed a reduction in the amount of the estate tax exclusion to $3.5 million, along with a $1 million gift tax exclusion.
If you have questions regarding estate taxes or any other estate planning matters, please contact the experienced attorneys at the Law Offices of Mary A. Miller, P.C. for a consultation. You can contact us either online or by calling us at (914) 939-6565. We are here to help!