Estate tax in the United States
The estate tax in the United States is a tax
imposed on the transfer of the "taxable es-
tate" of a deceased person, whether such
property is transferred via a will or according
to the state laws of intestacy. The estate tax
is one part of the Unified Gift and Estate Tax
system in the United States. The other part of
the system, the gift tax, imposes a tax on
transfers of property during a person’s life;
the gift tax prevents avoidance of the estate
tax should a person want to give away his/her
estate just before dying.
In addition to the federal government,
many states also impose an estate tax, with
the state version called either an estate tax
or an inheritance tax. Since the 1990s, the
term "death tax" has been widely used by
those who want to eliminate the estate tax.
If an asset is left to a spouse or a charit-
able organization, the tax usually does not
apply. The tax is imposed on other transfers
of property made as an incident of the death
of the owner, such as a transfer of property
from an intestate estate or trust, or the pay-
ment of certain life insurance benefits or fin-
ancial account sums to beneficiaries.
Federal estate tax
The Federal estate tax is imposed "on the
transfer of the taxable estate of every de-
cedent who is citizen or resident of the Un-
ited States." The starting point in the cal-
culation is the "gross estate." Certain de-
ductions (subtractions) from the "gross es-
tate" amount are allowed in arriving at a
smaller amount called the "taxable estate."
The "gross estate"
The "gross estate" for Federal estate tax pur-
poses often includes more property than that
included in the "probate estate" under the
property laws of the state in which the de-
cedent lived at the time of death. The gross
estate (before the modifications) may be con-
sidered to be the value of all the property in-
terests of the decedent at the time of death.
To these interests are added the following
property interests generally not owned by the
decedent at the time of deat