| Publication 553 |
2003 Tax Year |
5. Estate & Gift Taxes
This is archived information that pertains only to the 2003 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Estate Tax Applicable
Exclusion Amount Increased
An estate tax return for a U.S. citizen or resident needs to be filed only if the gross estate exceeds the applicable exclusion
amount for the year
of death, listed below.
| |
Exclusion |
| Year |
Amount |
| 2003 |
$1,000,000 |
| 2004 and 2005 |
1,500,000 |
| 2006, 2007, and 2008 |
2,000,000 |
| 2009 |
3,500,000 |
Annual Exclusion for Gifts Increased
The annual exclusion for gifts made to spouses who are not U.S. citizens increased to $112,000.
Maximum Estate and
Gift Tax Rate Reduced
For estates of decedents dying, and gifts made, after 2002, the maximum rate for the estate tax and the gift tax is as follows.
| |
Maximum |
| Year |
Tax Rate |
| 2003 |
49% |
| 2004 |
48% |
| 2005 |
47% |
| 2006 |
46% |
| 2007, 2008, and 2009 |
45% |
Credit for State
Death Taxes Reduced
For estates of decedents dying in 2003, the credit allowed for state death taxes is limited to 50% of the amount that would
otherwise be allowed.
For estates of decedents dying in 2004, the credit will be limited to 25%.
For estates of decedents dying after 2004, the state death tax credit will be replaced with a deduction for state death taxes.
Generation-Skipping Transfer
(GST) Exemption Increased
The generation-skipping transfer (GST) lifetime exemption increased to $1,120,000. The annual increase can only be allocated
to transfers made
during or after the year of the increase.
Form 709–A Obsolete
Form 709–A, United States Short Form Gift Return, has been obsoleted. All gift tax returns must now be filed on Form 709,
United States Gift (and Generation-Skipping Transfer) Tax Return.
2004 Change
Qualified Family-Owned Business
Interest Deduction Repealed
The qualified family-owned business interest deduction has been repealed for the estates of decedents dying after December
31, 2003.
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