Estate Tax Applicable Exclusion Amount

The applicable exclusion amount is the amount on which the unified credit (applicable credit amount) is based. An estate tax return for a U.S. citizen or resident needs to be filed only if the gross estate exceeds this amount.

Exclusion
Year	Amount
2004 and 2005	1,500,000
2006, 2007, and 2008	2,000,000
2009	3,500,000

Increased Gift Tax Applicable Exclusion Amount

The applicable exclusion amount for lifetime gifts is fixed at $1 million.

Increased Annual Exclusion for Gifts

The annual exclusion for gifts of present interests made to a donee during the calendar year is $11,000.

The annual exclusion for gifts made to spouses who are not U.S. citizens is $110,000.

Maximum Estate and Gift Tax Rate

For estates of decedents dying, and gifts made, after 2001, the maximum rate for the estate tax and the gift tax will be reduced as follows.

Maximum
Year	Tax Rate
2005	47%
2006	46%
2007, 2008, and 2009	45%

Credit for State Death Taxes

For estates of decedents dying in 2004, the credit allowed for state death taxes will be limited to 25% of the amount that would otherwise have been allowed.

For estates of decedents dying after 2004, the state death tax credit will be replaced with a deduction for state death taxes.

2005 Income Tax Rates for Trust's and Estates

Taxable Income	PAY	Plus % on excess	Of the Amount Above
Below $2,000	Not Applicable	15.0 %	$ 0
$2,000 - 4,700	$300.00	25.0 %	$2,000
$4,700 - 7,150	$975.00	28.0 %	$4,700
$7,150 - 9,750	$1,661.00	33.0 %	$7,150
Over $9,750	$2,519.00	35.0 %	$9,750

YOUR Income from Estate Tax Schedule

Taxable Income	PAY	Plus % on excess	Of the Amount Above
Below $10,000	Not Applicable	18.0 %	$ 0.00
$10,000 - 20,000	$1,800.00	20.0%	$10,000
$20,000 - 40,000	$3,800.00	22.0%	$20,000
$40,000 - 60,000	$8,200.00	24.0%	$40,000
$60,000 - 80,000	$13,000.00	26.0%	$60,000
$80,000 - 100,000	$18,200.00	28.0%	$80,000
$100,000 - 150,000	$23,800.00	30.0%	$100,000
$150,000 - 250,000	$38,800.00	32.0%	$150,000
$250,000 - 500,000	$70,800.00	34.0%	$250,000
$500,000 - 750,000	$155,800.00	37.0%	$500,000
$750,000 - 1,000,000	$248,300.00	39.0%	$750,000
$1,000,000 - 1,250,000	$345,800.00	41.0%	$1,000,000
$1,250,000 - 1,500,000	$448,300.00	43.0%	$1,250,000
$1,500,000 - 2,000,000	$555,800.00	45.0%	$1,500,000
$2,000,000 - up	$780,800.00	48.0%	$2,000,000
Over $2,500,000	$1,025,800.00	50.0 %

Changes to Installment Payment Provisions

For estates of decedents dying after 2001, several rules applicable to qualifying for installment payments of estate tax have been changed.

The allowable number of partners and shareholders in a closely held business is increased from 15 to 45.

* Stock in qualifying lending and finance businesses is treated as stock in an active trade or business company.

* The rules regarding non-readily-tradable stock and holding company stock are clarified.

Increase in Generation Skipping Transfer (GST) Exemption

The generation-skipping transfer (GST) lifetime exemption increased by $40,000 to $1,100,000. The annual increase can only be allocated to transfers made during or after the year of the increase.