Louisiana Estate Taxes
Louisiana has an estate tax that is intended to absorb the maximum credit against the federal estate tax. It also has a layered inheritance tax system. The amount of tax imposed depends on who gets what after you are gone, according to the following classes of beneficiaries:
- Class A: This class includes those that count as the decedent's direct descendant (by blood or affinity), ascendant (e.g., parents and grandparents), or surviving spouse. The total value any inheritance, legacy, donation, or gift made in contemplation of death to the surviving spouse is completely exempt from tax. Any other transfers involving members of this class are taxed according to the rates below after a $25,000 per beneficiary tax exemption is taken.
- Class B: The members of this class are affectionately referred to as collateral relations and include adopted brothers and sisters and their descendants. The first $1,000 transferred to each beneficiary in this class is exempt from tax. Transfers above this amount are taxed per the tables below.
- Class C: All others not specifically mentioned above are lumped in under this class. Beneficiaries in this category get a maximum exemption of only $500, with the rest being taxed as indicated in the tables that follow.
|
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| Value of Property Passing to Class |
Class A Tax on Col. (1) |
Class A Rate on Excess |
Class B Tax on Col. (1) |
Class B Rate on Excess |
Class C Tax on Col. (1) |
Class C Rate on Excess |
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
(8) |
| $0 |
$5,000 |
$0 |
2% |
$0 |
5% |
$0 |
5% |
| $5,000 |
$20,000 |
$100 |
2% |
$250 |
5% |
$250 |
10% |
| $20,000 |
and above |
$400 |
3% |
$1,000 |
7% |
$1,750 |
10% |
The Louisiana inheritance tax, however, will be reduced in the coming years as follows:
| Louisiana Inheritance Tax Phase-Out Schedule |
| For Deaths Occurring |
Tax Rates Above Are Reduced By |
| After |
Before |
|
| June 30, 2001 |
July 1, 2002 |
40% |
| June 30, 2002 |
July 1, 2003 |
60% |
| June 30, 2003 |
|
80% |
Deductions. The following items are deductible from a decedent's estate when calculating Louisiana estate tax liability:
- decedent's debts and claims against the estate
- funeral expenses
- commissions of executors and administrators
- attorneys' fees and expenses of litigation in defending the will
- in determining the value of real estate, mortgages on such property are deductible (if real property is mortgage in excess of 50 percent of its value, the equity is subject to a further deduction equal to 20 percent of the mortgage)
Returns. An estate tax return must be filed within nine months after the decedent's death. Provided there is good cause, an extension may be granted of up to 15 months from the date of death. An inventory of the estate must also be filed with the court having jurisdiction of the estate and served on the tax collector of the proper county within nine months of the decedent's death (when there is no administration had) or on qualification of the executor or administrator (when there is administration of a will). In addition, an inheritance tax return must be filed by or on behalf of the heirs or legatees when inheritance taxes are due or when the gross value of the estate is at least $15,000.
Any taxes owed are generally due as soon as they are determined by the court with jurisdiction over the estate. In the event that there is no application for an administration of the succession, any taxes owed are due within six months of the decedent's death.
Generation-skipping transfer tax. Louisiana does not impose this type of tax.
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