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    Wisconsin Lawyer
    December 01, 2001

    Wisconsin Lawyer December 2001: Wisconsin's New Estate Tax - Figures

    Wisconsin's New Estate Tax

    Figure 1
    Federal Estate Tax and State Death Tax Credit Computation

      Situation 1 Situation 2 Situation 3
    Gross Estate $685,000 $737,170 $1,010,000
    Less Deductions (10,000) (10,000) (10,000)
    Taxable Estate 675,000 727,170 1,000,000
    Gross Estate Tax 220,550 239,853 345,800
    Less Applicable Credit Amount (for 2000 and 2001) 220,550 220,550 220,550
    Remaining Estate Tax 0         19,303 125,250
    State Death Tax Credit 0         19,303 125,250
    Balance Due IRS 0         0         92,050

    Figure 2
    IRS Table A – Unified Rate Schedule – Jan. 1, 2002

    Column A Column B Column C Column D
    Taxable amount over Taxable
    amount
    not over
    Tax on
    amount in
    column A
    Rate of tax on excess over amount in column A (%)
    0 $10,000 0 18
    $10,000 20,000 $1,800 20
    40,000 60,000 8,200 24
    60,000 80,000 13,000 26
    80,000 100,000 18,200 28
    100,000 150,000 23,800 30
    250,000 500,000 38,800 32
    500,000 750,000 155,800 37
    750,000 1,000,000 248,300 39
    1,000,000 1,250,000 345,800 41
    1,250,000 1,500,000 448,300 43
    2,000,000 2,500,000 780,800 49
    2,500,000 ------------ 1,025,800 50

    Figure 3
    IRS Table B
    Computation of Maximum Credit for State Death Taxes
    (Based on federal adjusted taxable estate computed using IRS Table B Worksheet, Figure 3a)

    (1) (2) (3) (4)
    Adjusted taxable estate equal to or more than - Adjusted taxable estate less than - Credit on amount in column (1) Rate of credit on excess over amount
    in column (1)
    0 $40,000 0 None
    $40,000 90,000 0 0.8
    90,000 140,000 $400 1.6
    140,000 240,000 1,200 2.4
    240,000 440,000 3,600 3.2
           
    440,000 640,000 10,000 4.0
    640,000 840,000 18,000 4.8
    840,000 1,040,000 27,600 5.6
    1,040,000 1,540,000 38,800 6.4
    1,540,000 2,040,000 70,800 7.2
           
    2,040,000 2,540,000 106,800 8.0
    2,540,000 3,040,000 146,800 8.8
    3,040,000 3,540,000 190,800 9.6
    3,540,000 4,040,000 238,800 10.4
    4,040,000 5,040,000 290,800 11.2
           
    5,040,000 6,040,000 402,800 12.0
    6,040,000 7,040,000 522,800 12.8
    7,040,000 8,040,000 650,800 13.6
    8,040,000 9,040,000 786,800 14.4
    9,040,000 10,040,000 930,800 15.2
    10,040,000 ------------ 1,082,800 16.0

    Figure 3a
    IRS Table B Worksheet Federal Adjusted Taxable Estate

    1) Federal taxable estate (from Tax Computation, Form 706, line 3)
    $__________
    2) Adjustment
    60,000
    3) Federal adjusted taxable estate. Subtract line 2 from line 1.
    Use this amount to compute maximum credit for state death taxes in Table B.
    $__________

    Figure 4
    Wisconsin's Fixed Exclusion Compared to Fluctuating Federal Exclusion

    Year Federal Exclusion Amount Wisconsin Exclusion Amount Federal Applicable Credit Amount Wisconsin Applicable Credit Amount
    1999 650,000 650,000 211,300 211,300
    2000 675,000 675,000 220,550 220,550
    2001 675,000 675,000 220,550 220,550
    1/1/02 1,000,000 1,000,000 345,800 345,800
    10/1/02 1,000,000 675,000 345,800 220,550
    2003 1,000,000 675,000 345,800 220,550
    2004 1,500,000 675,000 555,800 220,550
    2005 1,500,000 675,000 555,800 220,550
    2006 2,000,000 675,000 780,800 220,550
    2007 2,000,000 675,000 780,800 220,550
    2008 2,000,000 No Tax 780,800 No Tax
    2009 3,500,000 No Tax 1,475,800 No Tax
    2010 No Tax No Tax No Tax No Tax
    2011 1,000,000 146,800 345,800 345,800

    Figure 5
    Choosing a Bypass Arrangement

    Spouse 1 (S1)

    Spouse 1 (S2)

    Example 4: Each Spouse's Estate

    $675,000

    $675,000

    Bypass: Wis. Exclusion

    (675,000)

    675,000

    Bypass: Fed. Exclusion

    Not Used

     
    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    0

     
    FET on S2's Death in 2002
     

    0

    WET on S2's Death in 2002
     

    0

       
    Example 5a: Each Spouse's Estate

    1,000,000

    500,000

    Bypass: Wis. Exclusion

    (675,000)

    825,000

    Bypass: Fed. Exclusion

    Not Used

     
    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    0

     
    FET on S2's Death in 2002
     

    0

    WET on S2's Death in 2002
     

    24,000

       
    Example 5b: Each Spouse's Estate

    1,000,000

    500,000

    Bypass: Wis. Exclusion

    Not Used

     
    Bypass: Fed. Exclusion

    (1,000,000)

    500,000

    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    33,200

     
    FET on S2's Death in 2002
     

    0

    WET on S2's Death in 2002
     

    0

     
    Example 6a: Each Spouse's Estate

    1,000,000

    1,000,000

    Bypass: Wis. Exclusion

    (675,000)

    1,325,000

    Bypass: Fed. Exclusion

    Not Used

     
    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    0

     
    FET on S2's Death in 2002
     

    85,150

    WET on S2's Death in 2002
     

    53,200

    Total Estate Taxes in 2002
     

    138,350

       
    Example 6b: Each Spouse's Estate

    1,000,000

    1,000,000

    Bypass: Wis. Exclusion

    Not Used

     
    Bypass: Fed. Exclusion

    (1,000,000)

    1,000,000

    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    33,200

     
    FET on S2's Death in 2002
     

    0

    WET on S2's Death in 2002
     

    33,200

    Total Estate Taxes
     

    66,400

       
    Example 7a: Each Spouse's Estate

    2,000,000

    2,000,000

    Bypass: Wis. Exclusion

    (675,000)

    3,325,000

    Bypass: Fed. Exclusion

    Not Used

     
    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    0

     
    FET on S2's Death in 2002
     

    933,200

    WET on S2's Death in 2002
     

    159,300

    Total Estate Taxes in 2002
     

    1,092,500

       
    Example 7b: Each Spouse's Estate

    2,000,000

    2,000,000

    Bypass: Wis. Exclusion

    Not Used

     
    Bypass: Fed. Exclusion

    (1,000,000)

    3,000,000

    FET on S1's Death in 2002

    0

     
    WET on S1's Death in 2002

    33,200

    FET on S2's Death in 2002
     

    793,500

    WET on S2's Death in 2002
     

    136,500

    Total Estate Taxes in 2002
     

    930,000


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