What Is Estate Tax?
Estate tax is a tax on the transfer of a deceased person’s assets, calculated on the value of the estate above an exemption amount and paid from the estate before assets are distributed to heirs. In the US, the federal exemption is high, so most estates owe no federal estate tax; some states have their own estate taxes with lower thresholds.
Estate Tax vs. Inheritance Tax
Estate tax is charged on the estate as a whole; inheritance tax is charged to the people who receive assets and can depend on their relationship to the deceased.
Exemption Amounts
Exemption amounts are set by law and can change, so current figures should be checked for the relevant year.
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🔗 Related Terms
More Taxes Terms
- Additional Medicare Tax
- Adjusted Gross Income (AGI)
- Alternative Minimum Tax (AMT)
- Capital Gains Tax
- Capital Loss
- Child Tax Credit
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.