estate tax

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Estate tax

A federal or state tax imposed on an individual's assets inherited by heirs.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Estate Tax

A tax on the assets a deceased person leaves behind. These assets include all personal property, real estate, securities and other things. In the United States, the estate tax is applied to the value of an estate that remains after all the debts of the deceased are paid, if the value of the estate exceeds a certain amount, which is always over $1 million. The estate tax should not be confused with an inheritance tax, which is a tax on the income one receives from an estate.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

estate tax

A tax on the estate of the deceased before any distribution is made to the heirs. A federal unified gift and estate tax provides an exemption before any tax is paid. Although some states also levy an estate tax, it is generally at a much lower rate than the federal tax. Also called death tax. Compare inheritance tax.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Estate tax.

Your estate owes federal estate tax on the value of your taxable estate if the estate is larger than the amount you are permitted to leave to your heirs tax free.

That amount, which is set by Congress, is $2 million for 2006, 2007, and 2008 and is scheduled to increase to $3.5 million in 2009.

Under current law, the estate tax will be eliminated in 2010. Without further Congressional action, the tax will be reinstated in 2011. However, modifications to the law may be made before that date.

If your estate may be vulnerable to these taxes, which are figured at a higher rate than income taxes, you may want to reduce its value. You could do this by using a number of tax planning strategies, including making nontaxable gifts and creating irrevocable trusts.

Further, if you're married to a US citizen and leave your entire estate to your spouse, there are no estate taxes, no matter how much the estate is worth. However, estate taxes may be due when your surviving spouse dies.

You may also face estate taxes in your state.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.

estate tax

A tax imposed on the value of the estate of a decedent.The conceptual justification is premised on a peculiarly American notion that it is undesirable for generations to accumulate wealth by passing it to each other in a manner similar to that of English aristocracy and that each generation should make its own mark and earn its own way. As a result, it is considered advantageous to remove wealth from each generation by way of estate taxes and use the money for the common good.For details,see Publication 554,“Survivors,Executors and Administrators”available at the IRS Web site,www.irs.gov.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
The estate made a prepayment of estate taxes on Feb.
"The elimination of that credit combined with the increased unified tax credit has brought to the focus of estate taxes back to where it was a century ago," according to the Tax Foundation report.
But at current rates, the exclusion alone can save an additional $200,000 in federal estate taxes.
Full funding would prevent "wasting" the estate tax exclusion amount of the first deceased spouse, which could result in higher estate taxes upon the death of the surviving spouse.
Some have already "decoupled" their estate taxes from the federal tax, and it's likely more of them would if the federal tax were repealed, he said.
They own their home jointly, paying $20,280 a year in mortgage interest and $4,000 in real estate taxes. They paid $22,000 to adopt Jacob.
At the same time, they leave the land in private ownership and help assure landowners that their heirs won't be forced to sell the family's land just to pay estate taxes."
You need to carry enough life insurance to cover your family's living expenses, estate taxes, and the cost of probate.
There are two provisions in the law that can help minimize federal gift and estate taxes. The first is the ability each individual has to give up to $10,000 to anyone each year free of gift taxes.
In a statement, Angara said the Senate ways and means committee, which he chairs, will immediately act on the House bill aimed at granting amnesty on unpaid estate taxes upon passage and transmission to the Upper House.
The truth is that federal estate taxes have continued to become less of an issue for the majority of clients, as the individual estate tax exemption has grown to $5.43 million in 2015.