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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Calculating net worth is important to me for estimating the size of the estate I will leave my children. I live in DC and the estate will be subject to inheritance tax; at this point I am not concerned about federal tax because the exempt limits are much higher.

Determining the value of the estate means including the house and also the value of the survivor benefit on my pension, which will go to one of the children, because both will be included in the estate value for inheritance tax purposes.

I do wish DC would do away with the inheritance tax. It brings in less than one percent of DC's tax revenue and incentivizes the well off to establish residency in Virginia via a second home as the state has no inheritance tax. The District then loses income tax revenue from those who do this.

I personally do not mid paying the DC income tax but really mind the estate tax. Maybe I should join the people who spend six months plus a day in Virginia and the rest in DC....[/quote]

Or just move to a nearby city in NoVA with quick access to DC?  Why maintain 2 homes so close to each other?  but yes estate planning is real especially at the state level for estate taxes which often start much lower than federal.  Why give 30-40% of your estate to the state (or DC in your case)?  
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One way or another, the taxes get to you. If we sold our house to move to VA, we would incur high capital gains tax, both District and federal. I suppose we could rent the DC house, but being a DC landlord is no picnic.

What people do is buy a cheaper house in the country in VA where they put in the six months working from home or, if retired, puttering around, going back into DC for work in the office, social events, medical appointments, etc.

Far fewer people would do this if DC equalized its inheritance tax with Virginia's by eliminating it. DC's tax revenue would likely increase because they would collect the income tax from these people, who would be less reluctant to be full-time District residents. But then DC would lose its claim that it is promoting social justice by taxing the rich.
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