i am trying to navigate my way thru the new York state estate tax laws
. very complicated ! if i am reading correctly , there is no nys "gift "tax
. however any gift offsets the federal exemption . so for instance :
if a person has a taxable estate
of 13mil and dies in new york . upon his death he would owe the government 40 percent of 13mil - the(NNN) NNN-NNNNexemption = 7750mil . and then he would owe new york state estate tax of (according to the 706 form) 1,082,000 plus 16% over 10,040,000 minus the 1mil exemption so the difference of 12mil - 10,040,000=x 16% = 313,600 . so the total nys estate tax bill is $1,395,600..
however if i am reading the law correctly ? which is my question .
due to the fact that there is no new york state gift tax
if the same person with the 13mil estate, gifts 5mil before he dies , he essentially uses up his federal and exemption , so now his estate is taxable at 8mil for federal and state purposes with no exemption . now he owes the government 40% of 8mil because he used up his exemption as a gift (essentially a wash ?) BUT due to the NO nys gift tax law he has lowered his taxable bracket in new york state to 8mil
according toi the chart on the 706 form now he would owe new york state
$650,800 + 13.6% over $7,040,000 = $138.240 total new york state estate tax $789,400 thus saving $606,560 .. i know the state estate tax is deductible from the the total taxable estate for federal as well .
did i interpret the law correctly regarding gifting in new York state in regards XXXXX XXXXX on the state estate tax ???