Number of Estate Tax Returns Has Plummeted Since 2003

The IRS has just released an analysis of estate tax returns filed by wealthy decedents in recent years.  The analysis spans the years 2003 to 2012, during which time the estate tax filing threshold gradually rose from $1 million to $5.12 million.

Not surprisingly, the number of estate tax returns declined 87 percent, from about 73,100 in 2003 to about 9,400 in 2012, primarily due to the incremental increase in the filing threshold.  The total net estate tax receipts fell from $20.8 billion in 2003 to $8.5 billion in 2012.  The total for 2011 was only $3 billion; the estates of those dying in 2010 had a choice of paying the estate tax or accepting a limited step-up in the cost basis of inherited assets.

Looking at the number of estate tax returns filed as a percentage of the adult population (ages 18 and over), the top five states were the District of Columbia, Connecticut, Florida, California, and New York.

Stock and real estate made up about half of all estate tax decedents’ asset holdings in 2012.

Estate tax decedents with total assets of $20 million or more held a greater share of their portfolio in stocks (about 40 percent) and lesser shares in real estate and retirement assets than decedents in other total asset categories.

For an IRS brief on its findings, click here.

For detailed statistics on estate tax filings from 1995 to 2012, click here.