Idaho Estate Tax Planning: The Ultimate Guide

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Paul Sundin, CPA

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I have some good news when it comes to Idaho estate tax. Idaho does not impose or assess an estate tax, even though the federal government does.

The goal of this post will be to discuss certain Idaho estate, gift and inheritance tax issues to get you up to speed.

Estate planning can be complex. So make sure you review your situation with a qualified CPA or tax professional.

Idaho estate tax exemption

Idaho has no estate tax. As such there is no exemption applied to the assets of an estate. Most states do not impose an estate tax. Only 12 states assess a tax.

Federal and state tax?

The estate tax is commonly referred to as the death tax. It applies when a persons gross estate (less deductions and qualified expenses) is above a specified threshold.

In theory, it is easy to calculate. But there can be various assets in the estate that are complex to value. This includes certain types of real estate, business interests, and other restricted or private investments. Many of these investments don’t have public valuations so it can make the valuation challenging.

But the good news is with proper estate planning you can mitigate many estate planning issues. This is where a CPA and estate attorney can be helpful.

Idaho gift tax and inheritance tax planning

More good news for you, Idaho does not impose an inheritance tax. But certain inheritance laws in other states could be applicable. So it really depends on where the beneficiary lives and where the estate assets are.

The US does not impose an inheritance tax, but it does impose a gift tax. The gift tax exemption mirrors the estate tax exemption. Also, gifts of $15,000 and below do not require any tax payment or estate tax return.

Overall Idaho tax structure

Idaho is considered a tax friendly state. It does not tax Social Security, but it does tax retirement accounts, including 401(k)s, pension plans and trusts. However, there are deductions for individuals who are over the age of 65 when it comes to pension plans.

Idaho has progressive state income tax rates that will range up to approximately 7%. Property taxes in Idaho are on the low side. But seniors also can qualify for a property tax break if they own and reside in a home with less than 1 acre of property and have income below a certain threshold.

Idaho sales tax is 6%. There are only six cities that are mostly in tourist areas that charge a local sales tax.

If you have a large estate make sure you do proper tax planning. Even though there is no estate tax in Idaho, make sure you do proper estate planning at the federal level.

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