California 2% Deferred Tax Calculation

IRS Information

Computation of California 2% Portion of Deferred Tax 1999 - 2004

Year of Death	Business Value Equal to Applicable Exclusion Amount	First $1,000,000 of Taxable Business Value	Inflation Factor	Adjusted $1,000,000 of Taxable Business Value Rounded to Next Lowest $10,000	Total Business Value on Which State Death Tax (SDTC) is Computed	SDTC on Total Business Value	SDTC on the Applicable Exclusion Amount	Tax Deferred at 2%: SDTC on Total Business Value Less SDTC on Applicable Exclusion Amount
				(b) x (c)	(a) + (d)			(f) - (g)
	(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
1998	625,000	1,000,000	100.00%	1,000,000	1,625,000	NA	NA	NA
1999	650,000	1,000,000	101.67%	1,010,000	1,660,000	75,120	16,000	59,120
2000	675,000	1,000,000	103.41%	1,030,000	1,705,000	78,360	17,000	61,360
2001	675,000	1,000,000	106.83%	1,060,000	1,735,000	80,520	17,000	63,520
2002	1,000,000	1,000,000	110.33%	1,100,000	2,100,000	80,100	24,900	55,200
2003	1,000,000	1,000,000	112.50%	1,120,000	2,120,000	54,200	16,600	37,600
2004	1,500,000	1,000,000	114.33%	1,140,000	2,640,000	37,580	16,100	21,480
2005	1,500,000	1,000,000	117.17%	1,170,000	2,670,000	NA	NA	NA

For estates of decedents dying on and after January 1, 1999 through December 31, 2003, the figures for the Business Value Equal to the Applicable Exclusion Amount, Applicable Credit Amount, and the amount of tax deferred at 2% are reduced in response to any Section 2057 Qualified Family-Owned Business Interest (QFOBI) deduction in excess of $625,000. The maximum QFOBI deduction of $675,000 results in an Applicable Exclusion Amount of $625,000 and an Applicable Credit Amount of $202,050. QFOBI deductions greater than $625,000 but less than $675,000 result in a sliding scale of adjustments to the Applicable Exclusion Amount and Applicable Credit Amount.