Estate Tax

Estate tax is a tax on the right to transfer property upon death. The federal estate tax applies to estates with a total value exceeding the exemption threshold, which is $13.61 million per individual for 2024. The tax rate on amounts above the exemption can reach up to 40%.

New York State imposes its own estate tax with a much lower exemption of approximately $6.94 million. Notably, New York has a "cliff" provision: if the estate exceeds 105% of the exemption amount, the entire estate becomes taxable, not just the amount above the threshold. This makes estate planning particularly important for property owners in New York.

For non-resident aliens who own U.S. property, the federal estate tax exemption is only $60,000, meaning nearly all U.S.-situated assets could be subject to estate tax at rates up to 40%. International real estate investors should consider ownership structures such as foreign corporations or trusts to mitigate estate tax exposure. Consulting with an attorney experienced in cross-border estate planning is strongly recommended.