Marital deduction

Marital deduction

Marital deduction is a type of tax law that allows a person to give assets to his or her spouse with reduced or no tax imposed upon the transfer. Some marital deduction laws even apply to transfers made postmortem. Spouses can transfer property between themselves tax free and ex-spouses can do that according to divorce decree. For U.S. estate and gift tax purposes, there is no tax on transfers between spouses, whether during lifetime or at death. There is no limit on the amount that may be transferred. However, there are two important exceptions. The federal gift tax marital deduction is only available if the donee spouse (the person receiving the gift) is a U.S. citizen. The federal estate tax marital deduction is available for bequests at death to a surviving spouse, whether or not he or she is a U.S. citizen. However, if the survivor is not a U.S. citizen, the bequest must take the form of a specialized type of trust known as a Qualified Domestic Trust.

References


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Look at other dictionaries:

  • marital deduction — see deduction Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. marital deduction …   Law dictionary

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  • marital deduction trust — see trust Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

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  • marital deduction — A deduction in computing the taxable estate for federal estate tax purposes, limited to one half of the decedent s adjusted gross estate, of property passing to the surviving spouse. IRC § 2056(a) …   Ballentine's law dictionary

  • Unlimited Marital Deduction — A provision in United States Federal Estate and Gift Tax Law that allows an individual to transfer an unrestricted amount of assets to his or her spouse at any time, including at the death of the transferor, free from tax. The unlimited marital… …   Investment dictionary

  • deduction — de·duc·tion n 1: an amount allowed by tax laws to be subtracted from income in order to decrease the amount of income tax due see also internal revenue code in the important laws section compare credit, ex …   Law dictionary

  • marital — /maeratal/maraytal/ Relating to, or connected with, the status of marriage; pertaining to a husband; incident to a husband @ marital agreements Contracts between parties who are either on the threshold of marriage or on the verge of separation,… …   Black's law dictionary

  • marital — /maeratal/maraytal/ Relating to, or connected with, the status of marriage; pertaining to a husband; incident to a husband @ marital agreements Contracts between parties who are either on the threshold of marriage or on the verge of separation,… …   Black's law dictionary

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