Levy on the value of property changing hands at the death of the owner, fixed mainly by reference to its total value. Estate tax is generally applied only to estates whose value exceeds a set amount, and it is applied at graduated rates. An estate tax was first instituted in the U.S. in 1898 to help finance the Spanish-American War; it was repealed in 1902 but permanently reimposed in 1916, initially to help finance mobilization for World War I. Methods of avoiding estate tax (e.g., gifts and trust funds) were largely foiled by the U.S. Tax Reform Act of 1976.
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