Simple Estate Tax Question

There are too many facts left out to educate you on the various options in this situations. For example, is the man a US citizen or resident? Is it still alive or did he die? If he died, when and where?

In this specific instance, though, none of those issues makes a difference. If the wife is a US citizen, the gift to her is fully deductible. So even if the man is a US citizen or resident, only the gift to the son will be part of his taxable estate (assuming there are no other assets).

Whether the person has died or is still alive, there will be an exemption of at least $1,000,000, and the gift to the son is below that amount.

This answer does not take into consideration that there may have been taxable gifts in the past that would reduce the exemption amount, however.

___ Stu

Not a gift. It is a bequest. Therefore, the full unified credit of $1,772,800 is available for the taxable estate. As that credit is based on the tax on an estate valued at $5.12M in 2012, there would not be any tax.

During his lifetime did the man use up lifetime gift exemption, which is $5,120,000 in 2012? If yes, then the 100k is subject to estate tax, which is almost a flat 35%.

There is a provision of the law that any unused estate exemption gets transferred to the spouse. See 2010(c) at

If the father is not a US citizen, then all of the above may not apply. US based assets are still subject to the inheritance tax. Foreign assets are not. Not sure -- need to check this. But if the father renounced his citizenship in the last few years, then all of his assets may be subject to the US estate tax

-- but once again, need to check this.