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How is estate transfer tax calculated in Louisiana?

The estate transfer tax is calculated by determining a ratio of assets included in the federal gross estate attributable to Louisiana to the total federal gross estate. This ratio is applied to the state death tax credit allowable under Internal Revenue Code Section 2011. The portion of the state death tax credit allowable to Louisiana that exceeds the inheritance tax due is the state estate transfer tax.

The Economic Growth and Tax Relief Reconciliation Act of 2001 phased out the state estate tax credit between 2002 and 2005 and replaced the credit with a deduction for state estate taxes for deaths that occur after December 31, 2004. Because R.S. 47:2432 only imposes the estate transfer tax if a state death tax credit is allow against the federal estate tax, no state estate transfer tax is due for deaths after December 31, 2004. However, the Economic Growth and Tax Relief Reconciliation Act of 2001 provisions will sunset on January 1, 2011, and the Internal Revenue Code will revert to the provisions that were in effect before it was passed unless further legislation is enacted to make its changes permanent. If Congress fails to make the Act’s changes permanent and the state estate tax credit is restored, the state estate transfer tax will again be due.

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