what is estate tax
Best answer
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.