estate tax


Definition of estate tax

: a tax in the form of a percentage of the taxable estate that is imposed on a property owner's right to transfer the property to others after his or her death — compare inheritance tax sense 1

Examples of estate tax in a Sentence

Recent Examples on the Web

Of Ryan’s stated tax reform agenda, the TCJA fulfills exactly one pledge: heirs to multi-million dollar fortunes are no longer subject to estate taxes, at least temporarily. Matthew Yglesias, Vox, "Paul Ryan is leaving Congress in the most fitting way possible," 30 Nov. 2018 This is not the place to debate the merits of an estate tax. WSJ, "Dogs Bite Men and Trumps Duck Taxes," 5 Oct. 2018 That would raise almost as much as reinstating the estate tax. Eric Johnson, Recode, "American capitalism broke in the 1980s. Can it be fixed?," 7 Nov. 2018 So would the shrunken alternative minimum tax and estate tax and the new deduction for businesses such as partnerships that report their earnings on their owners’ individual tax returns. Richard Rubin, WSJ, "House Republicans Move to Extend Individuals’ Tax Cuts," 13 Sep. 2018 The missing pieces include the individual income-tax brackets, the standard deduction and the per-person exemption from the estate tax. Richard Rubin, WSJ, "Taxpayers Can Put More Into Retirement Accounts in 2019, IRS Says," 1 Nov. 2018 No sales tax on groceries and levying an estate tax. Jon Talton, The Seattle Times, "Washington’s paradox: Progressive politics but regressive tax system," 23 Oct. 2018 To finance the bill, Sen. Warren is calling for estate tax rates to return to levels at the end of the Bush Administration and progressive taxes that will impact only the wealthiest 10,000 earners in the country. Diana Budds, Curbed, "Senator Warren has a $450 billion plan to fix the housing crisis," 25 Sep. 2018 And our tax cut saves family, farms and ranches and small businesses from unfair estate tax, also known as the death tax. Fox News, "Jordan, Meadows ask Trump to declassify Carter Page docs," 6 Sep. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'estate tax.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of estate tax

1928, in the meaning defined above

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Last Updated

6 Feb 2019

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The first known use of estate tax was in 1928

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estate tax


Financial Definition of estate tax

What It Is

An estate tax is levied on assets inherited by the heirs to a deceased person's estate.

How It Works

The estate tax is applied differently according to U.S. Federal and state laws as well as international law. Typically, estate taxes are only levied once a certain threshold, known as the exclusion limit, has been reached.

Estate taxes are not applicable if a person bequeaths (transfers) the assets from the estate to a living spouse. This type of transfer is known as the unlimited marital deduction. However, in the event that the spouse dies, the beneficiaries may be required to pay estate taxes if the exclusion limit is exceeded.

[InvestingAnswers Featured Article: A Simple Plan to Avoid Estate Taxes]

Why It Matters

Estate taxes, like other taxes on unearned incomes, are a source of revenue for governments that use it to finance various projects. The issue of the estate tax has become highly politicized, and it is sometimes referred to as the "death tax" by people who oppose it.

But estate taxes are not inevitable. In the U.S., there are many different estate planning techniques that individuals can use to reduce the size of their taxable estates.

[InvestingAnswers Tutorial: Reduce Your Federal Estate Tax With These 4 Powerful Estate Planning Tools]

Source: Investing Answers

estate tax


English Language Learners Definition of estate tax

: a tax that you pay on the money and other property that comes to you because someone has died : a tax on an estate that you inherit

estate tax


Legal Definition of estate tax

: an excise in the form of a percentage of the taxable estate that is imposed on a property owner's right to transfer the property to others after his or her death

called also succession tax

— see also unified transfer tax — compare gift tax, inheritance tax

More from Merriam-Webster on estate tax

Rhyming Dictionary: Words that rhyme with estate tax Encyclopedia article about estate tax

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