Federal Estate Tax

The Federal Estate Tax is a tax on the transfer of property when someone passes away. It applies to the value of the deceased person's estate, which includes money, real estate, and personal belongings. As of 2023, estates valued below $12.92 million are exempt from this tax, meaning only wealthy individuals or families typically pay it. The tax rate can range from 18% to 40% on the amount over the exemption limit. This tax is collected by the federal government and aims to redistribute wealth. Estates must file an estate tax return to determine any tax liability.