Marital Deduction in United States

Practical Information

Note: Some of this information was last updated in 1982

Marital Deductions under the Tax Reform Act of 1976

Under the Tax Reform Act of 1976, the marital deduction allocable to a decedent’s estate was applicable to property belonging to a decedent that passes from the decedent to the decedent’s surviving spouse as a result of the decedent’s death. The marital deduction in dollar amounts was limited to the fair market value of the property passing from the decedent to the surviving spouse up to but not exceeding one half of the adjusted gross estate or $250,000, whichever is greater. The amount of the marital deduction is a direct reduction of the taxable estate of the decedent. Wills that incorporated the marital deduction provision drawn before the 1976 Tax Reform Act were changed if the adjusted gross estate was less than $500,000. For an adjusted gross estate of $500,000 or more, the wording recommended before the Tax Reform Act of 1976 was still acceptable.

The marital deduction may give substantial tax advantages to the estate of the first married party to die. The marital deduction in the estate tax and gift tax area was enacted to bring about an equalization of taxes between the common law states and the community property states.

(Revised by Ann De Vries)

What is Marital Deduction?

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