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R. Klein, EA
R. Klein, EA, Enrolled Agent
Category: Tax
Satisfied Customers: 3375
Experience:  Over 20 Years experience
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my father has an estate that exceeds both the federal exemption

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my father has an estate that exceeds both the federal exemption and new york state exemption. he is currently residing in new york city . he owns an apartment in nyc and a home in florida. he is interested in establishing domicile in Florida to take advantage of the tax advantages . the 16% new york state estate tax would be very costly to his inherutance . i have 2 questions if you would be kjind enough . 1) post etsablishing residence in florida , how long must he reside there in order to completely avoid new york state estate tax . is the tax null as as soon as he establishes residence or is there a time frame necessary ?
2) he was told that his home in florida should be worth more then his home in new york to really be a residence and be free and clear from new york state taxs . is this true ?

R. Klein, EA :

Thank you for contacting me about your Tax issue. I will work hard to help you understand the issue clearly.

R. Klein, EA :

For purposes of New York State estate tax, the gross estate includes all property that a person owned, had control over, or had an interest in on the date of his or her death

R. Klein, EA :

The only date that matters for estate tax is the date of death and where the person made his primary residence on that date.

R. Klein, EA :

HOWEVER:



  • a resident or citizen of the U.S. at the time of death but not a resident of the state, whose estate includes real or tangible personal property located in the state.

R. Klein, EA :

This means that if he died in Florida but had more than $1MM in property value in NY state, then NY may tax the estate portion that is in NY state.

R. Klein, EA :

Establishing residency in Florida is a matter of state law. It has nothing to do with the value of one home in FL vs NY. It has to do with moving your auto registrations, driver's license, voting records, etc.

Customer:

got it , i understand that if the new york property is put into a Florida llc then is too would avoid the new york estate tax ? am i correct , and thank you by the way

R. Klein, EA :

Again, per NY law, if you live in NY for MORE than half the year (182+ days), then NY can consider you a legal resident. FL does not have such a law.

R. Klein, EA :

No. having real property owned by a FL LLC does not change the situs of the property. It is STILL NY property unless you can get the state to recognize that lot as part of Florida! Hah!

Customer:

understood , ha .. just 2 more questions please ..

Customer:

1) is the nys estate tax a flat %16 2) i am confused as too which part of the estate tax is deductible from which part ... is it the federal estate tax that lowers the estate tax basis i for the state ? or vica versa ? ho does that work ?

R. Klein, EA :

state taxes can be deducted from the federal calculation.

Customer:

is the state estate tax 16% flat or is a progressive tax

R. Klein, EA :

It doesn't even start that low. It is a progressive tax that starts at 18% and goes to 55%

R. Klein, EA :

Anything over $3MM is taxed at 55% flat.

R. Klein, EA :

WIth estate and federal tax, on amounts over $5MM, you're lucky to take away 25% of the estate,

Customer:

wow , thats criminal ... thank you , i think i need an estate planner

R. Klein, EA :

AN estate planner that charges a few to tens of thousands can save you millions!

Customer:

thank you so much for the advice

R. Klein, EA and 2 other Tax Specialists are ready to help you