Page 10 THE SAUGUS ADVOCATE – FriDAy, NOVEmBEr 6, 2026 SOUNDS | FROM PAGE 9 Estate Taxes In Massachusetts T he current Massachusetts estate tax exemption is $2million. At least Massachusetts has doubled the exemption from $1million to $2million effective for decedents dying on or after January 1, 2023. The problem is the Massachusetts estate tax is leading many taxpayers to flee the Commonwealth in order to settle in a state that has no estate tax and even no income tax. The current federal gift tax and estate tax exemption is $15million. This figure will be adjusted annually for inflation. If a married person dies and does not use this exemption during his or her lifetime, the exemption is in effect given to the surviving spouse for him or her to use, thereby providing for a total exemption of $30million. This is referred to as “portability”. Massachusetts does not allow for any “portability” provisions. For federal purposes, in order to take advantage of portability, a federal estate tax return would have to be filed on behalf of the first spouse to die, even if no estate tax is due. The decedent’s unused estate tax exemption is then passed to the surviving spouse. If the first spouse to die left everything to the surviving spouse and the surviving spouse subsequently died with a $30million estate, no federal estate tax would be due. Gifting low-cost basis assets or cash either to children, grandchildren or irrevocable gifting Trusts can serve to reduce the Massachusetts taxable estate and save on estate taxes. There is no gift tax in Massachusetts. Also, you do not have to add back “taxable” gifts when calculating the Massachusetts taxable estate. Massachusetts goes by line 3 on the federal Form 706 (1999 Revision date) which is the taxable estate “before” adding back taxable gifts. A taxable gift is a gift in excess of the $19,000 per doner annual gift tax exclusion. For federal purposes, taxable gifts are not really relevant when an individual’s gross estate is much less than the $15million exemption. Consequently, a taxpayer with a net worth of $4million all in cash can give all of that money away to children with no gift tax to be paid in Massachusetts, and since the federal gift tax exclusion is $15milion, no federal gift tax would have to be paid. Filing a gift tax return technically is required but from a practical standpoint is entirely irrelevant. The federal gift tax exemption and estate tax exemption is unified, meaning you can either give $15million away during your lifetime or die and bequeath $15million away upon your death and pay no federal tax, but you do not have the benefit of being able to double up on the exemption amount. Often, it is more advantageous to provide for low-cost basis assets such as appreciated real state or stocks to be included in your taxable estate in order to achieve the step up in cost basis equal to the fair market value of the assets upon your death. This ends up eliminating or greatly reducing the capital gains tax upon a subsequent sale by your children. The federal capital gains tax rate can be as high as 23.8% and the Massachusetts capital gains tax rate would be 5%, for a total tax rate of 28.8%. To the extent depreciation has been claimed on rental real estate, the amount of depreciation taken would actually result in that portion of the capital gain being taxed federally at 25%. This is called depreciation recapture. Therefore, the total future capital gains tax paid could be a lot higher than the Massachusetts estate tax paid on the appreciated assets if included in the taxable estate. Gifting cash or high-cost basis assets in the eleventh hour can certainly result in a substantial savings in Massachusetts estate taxes. A high-cost basis asset might be a common stock that has not appreciated in value. There is no built-in gain to worry about a child paying a sizable capital gains tax after you pass away. In this situation, the step up in cost basis is irrelevant. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, Certified Financial Planner, AICPA Personal Financial Specialist and holds a masters degree in taxation. ter at 781-231-4178 to attend; walk-ins are also welcome. One-day holiday trash delay The Town of Saugus announces that trash and recycling collection will run on a one-day delay for the Veterans Day holiday. Trash and recycling will not be collected on Wednesday, Nov. 11, due to the holiday. Collection will resume on a oneday delay on Thursday, Nov. 12. Residents are kindly asked to leave trash and recycling curbside by 7 a.m. the day after their normally scheduled collection day. The Town of Saugus would like to thank everyone for their cooperation. Please contact Solid Waste/Recycling Coordinator Scott A. Brazis at 781-2314036 with any questions. C.H.a.R.M. Center closed Nov. 11 The Town of Saugus announces that the C.H.a.R.M. Center/compost site located at 515 Main St. will be closed on Wednesday, Nov. 11, in observance of Veterans Day. The C.H.a.R.M. Center/compost site will reopen on Saturday, Nov. 14, from 8 a.m. to 2 p.m. The Town of Saugus would like to thank everyone for their cooperation. Please contact Solid Waste/Recycling Director Scott A. Brazis at 781-231-4036 with any questions. Saugus Historical Society Nov. 18 The program “What’s Special about Your Saugus Neighborhood?” has been rescheduled from its original October date to Wednesday, Nov. 18. The Saugus Historical Society meeting is on the third rather than second Wednesday this month to allow people to commemorate Veterans Day, which falls on the second Wednesday of November this year. Speakers Joyce and Al Rodenheiser, Allen Humphries and Laura Eisener will speak about the neighborhoods they know best, and a few other longtime Saugonians have contributed some unique memories that will be mentioned. Maps SOUNDS | SEE PAGE 11 THANK YOU! For Your Continued Vote of Confidence, Trust, and Support. It is an honor and privilege to represent the people of Revere and Saugus. Standing Up for Working Families. Fighting for Affordability. Supporting Our First Responders. Building a Stronger Future for Our Communities. Jessica Giannino Your State Representative (Paid Pol. Adv.)
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