The Estate Tax is atax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 PDF (PDF)). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them.
People also ask
What is an estate tax called?
Estate Tax. What is an ‘Estate Tax’. An estate tax is a tax levied on an heir’s inherited portion of an estate if the value of the estate exceeds an exclusion limit set by law. The estate tax is mostly imposed on assets left to heirs, but it does not apply to the transfer of assets to a surviving spouse.
Do you have to pay taxes on an estate?
If you live in a state with an estate tax, the good news is that (generally speaking) your estate tax bill is subtracted from the value of your taxable estate before you calculate what you might owe the IRS. MORE: Giving money or assets away?
How are estate taxes calculated?
Assessed by the federal government and a number of state governments, these levies are calculated based on the estate’s fair market value (FMV) rather than what the deceased originally paid for its assets. The tax is levied by the state in which the deceased person was living at the time of their death.
What is an’estate tax’?
Estate Tax. What is an ‘Estate Tax’. An estate tax is a tax levied on an heir’s inherited portion of an estate if the value of the estate exceeds an exclusion limit set by law.