estate tax

noun

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

As the name implies, estate taxes are taxes levied on the dead person’s estate. Liz Weston, latimes.com, "How to boost your credit score before you buy a house," 9 June 2019 Booker’s campaign said his plan would be fully paid for by reversing changes to the estate tax under President Donald Trump and raising several other taxes that were cut by the Republican tax law passed in 2017. The Washington Post, The Mercury News, "Sen. Cory Booker proposes capping rent paid by Americans at 30 percent of their income," 5 June 2019 Fewer than 2,000 estates, or 0.1% of people who die, are expected to owe estate tax for 2019, according to estimates by the Tax Policy Center. WSJ, "WSJ Tax Guide 2019: Estate and Gift Taxes," 15 Feb. 2019 Wealthy homeowners won’t be the only ones to feel the pinch of New York City’s new real-estate tax law. Josh Barbanel, WSJ, "New Real-Estate Tax Hits Industry, $2 Million Homes," 3 Apr. 2019 Making annual gifts to shrink a taxable estate is less important now that the federal gift-and-estate tax exemption is above $11 million per individual. Laura Saunders, WSJ, "It’s Time to Start Paying Your Taxes Like a Billionaire," 30 Nov. 2018 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

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

14 Jun 2019

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The first known use of estate tax was in 1928

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More Definitions for estate tax

estate tax

noun

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

noun

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

noun

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

Britannica.com: Encyclopedia article about estate tax

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