what is estate tax

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An estate tax is alevy on estates whose value exceeds an exclusion limit set by law. Only the amount that exceeds that minimum threshold is subject to tax.

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  • What is estate tax and how does it work?

  • What is estate tax? The estate tax is a tax on a person’s assets after death. In 2021, federal estate tax generally applies to assets over $11.7 million. Estate tax rate ranges from 18% to 40%. Some states also have estate taxes.

  • How much of an estate is subject to tax?

  • Only the amount that exceeds that minimum threshold is subject to tax. 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.

  • Do the wealthy pay estate taxes?

  • Only the wealthiest estates pay the tax because it is levied only on the portion of an estate value that exceeds a specified exemption level ?$5.49 million per person (effectively $10.98 million per married couple) in 2017. [2]

  • 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.

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