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

Giving shares is easier now that the tax bill has raised the lifetime gift and estate tax exemption, tax advisers say. Richard Rubin, WSJ, "Crack and Pack: How Companies Are Mastering the New Tax Code," 3 Apr. 2018 The state is projected to collect $230 million in the current fiscal year in gift and estate taxes. Christopher Keating,, "Republicans Continue Campaign Against Connecticut's 'Death Tax'," 21 June 2018 The federal estate tax rarely falls on farms or small businesses, since only those leaving behind more than $5 million pay it. Salvador Rizzo, Washington Post, "Anatomy of a Trump rally: 76 percent of claims are false, misleading or lacking evidence," 10 July 2018 The tech entrepreneur proposes eliminating the gift and estate tax and taxes on Social Security and pensions. Joseph De Avila, WSJ, "Connecticut Republicans Confronted With Choices," 8 July 2018 Talk to the pros Make an appointment with an accountant to explore ways to minimize estate taxes, then work with a lawyer to draft the will. Scott Nordlund,, "How to make an estate plan in just 10 steps," 21 June 2018 At the same time, the general fund is strapped for cash in part because Christie and lawmakers lowered the sales tax and phased out the estate tax. Mike Catalini, The Seattle Times, "Murphy flouting voters’ will on Exxon settlement, groups say," 9 June 2018 After Republicans took control of state government in 2013, North Carolina ended the estate tax and lowered corporate taxes as well as some personal income taxes. Dana Goldstein, New York Times, "Why the Teacher Walkout Movement Won’t Reach Every State," 16 May 2018 One would allow young farmers to pay the estate tax on the agricultural value of the land rather than the development value, allowing them to inherit farms without having to sell some of the land. Thomas Oide,, "Boston Common reverts to pasture for a day, to generate support for farmers," 6 June 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

4 Oct 2018

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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

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obstinately defiant of authority

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