The National Directory of Certified Public Accountants

Ask A CPA - Estate Tax

Estate Valuation

The first step in determining the value of your estate is to add up the value of everything you own and then subtract it from the estate value, the expenses of settling the estate and making any non-taxable bequests. No federal estate taxes are assessed on estates valued at less than $5 million. Included in your estate is your home and any rental property you may own, securities and other investments, retirement funds (401k, IRA's)you have saved and all your personal possessions. Pending federal and state income tax refunds are also included. Many such items will automatically pass to your spouse and not be included in your estate if the property is jointly owned. In addition, the size of your estate will be reduced by the money you owe, such as a mortgage on your home, burial expenses, the cost of settling the estate and other items. Assets left to charity will also reduce the size of your estate.

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