Estate tax in the United States

This article is about Estate tax in the United States. For other countries, see Inheritance tax.

The estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will, according to the state laws of intestacy or otherwise made as an incident of the death of the owner, such as a transfer of property from an intestate estate or trust, or the payment of certain life insurance benefits or financial account sums to beneficiaries. The estate tax is one part of the Unified Gift and Estate Tax system in the United States. The other part of the system, the gift tax, imposes a tax on transfers of property during a person's life; the gift tax prevents avoidance of the estate tax should a person want to give away his/her estate.

In addition to the federal government, many states also impose an estate tax, with the state version called either an estate tax or an inheritance tax. Since the 1990s, opponents of the tax have used the pejorative term "death tax." The equivalent tax in the United Kingdom has always been referred to as "death duties."

If an asset is left to a spouse or a charitable organization, the tax usually does not apply.

Federal estate tax

The Federal estate tax is imposed "on the transfer of the taxable estate of every decedent who is a citizen or resident of the United States." The starting point in the calculation is the "gross estate." Certain deductions (subtractions) from the "gross estate" amount are allowed in arriving at a smaller amount called the "taxable estate."

The "gross estate"

The "gross estate" for Federal estate tax purposes often includes more property than that included in the "probate estate" under the property laws of the state in which the decedent lived at the time of death. The gross estate (before the modifications) may be considered to be the value of all the property interests of the decedent at the time of death. To these interests are added the following property interests generally not owned by the decedent at the time of death:

• the value of property to the extent of an interest held by the surviving spouse as a "dower or curtesy";
• the value of certain items of property in which the decendent had, at any time, made a transfer during the three years immediately preceding the date of death (i.e., even if the property was no longer owned by the decedent on the date of death), other than certain gifts, and other than property sold for full value;
• the value of certain property transferred by the decedent before death for which the decedent retained a "life estate", or retained certain "powers";
• the value of certain property in which the recipient could, through ownership, have possession or enjoyment only by surviving the decedent;
• the value of certain property in which the decedent retained a "reversionary interest", the value of which exceeded five percent of the value of the property;
• the value of certain property transferred by the decedent before death where the transfer was revocable;
• the value of certain annuities;
• the value of certain jointly owned property, such as assets passing by operation of law or survivorship, i.e. joint tenants with rights of survivorship or tenants by the entirety, with special rules for assets owned jointly by spouses.;
• the value of certain "powers of appointment";
• the amount of proceeds of certain life insurance policies.

The above list of modifications is not comprehensive.

As noted above, life insurance benefits may be included in the gross estate (even though the proceeds arguably were not "owned" by the decedent and were never received by the decedent). Life insurance proceeds are generally included in the gross estate if the benefits are payable to the estate, or if the decedent was the owner of the life insurance policy or had any "incidents of ownership" over the life insurance policy (such as the power to change the beneficiary designation). Similarly, bank accounts or other financial instruments which are "payable on death" or "transfer on death" are usually included in the taxable estate, even though such assets are not subject to the probate process under state law.

Deductions and the taxable estate

Once the value of the "gross estate" is determined, the law provides for various "deductions" (in Part IV of Subchapter A of Chapter 11 of Subtitle B of the Internal Revenue Code) in arriving at the value of the "taxable estate." Deductions include but are not limited to:

• Funeral expenses, administration expenses, and claims against the estate;
• Certain charitable contributions;
• Certain items of property left to the surviving spouse.
• Beginning in 2005, inheritance or estate taxes paid to states or the District of Columbia.

Of these deductions, the most important is the deduction for property passing to (or in certain kinds of trust, for) the surviving spouse, because it can eliminate any federal estate tax for a married decedent. However, this unlimited deduction does not apply if the surviving spouse (not the decedent) is not a U.S. citizen. A special trust called a Qualified Domestic Trust or QDOT must be used to obtain an unlimited marital deduction for otherwise disqualified spouses.

Tentative tax

The tentative tax is based on the tentative tax base, which is the sum of the taxable estate and the "adjusted taxable gifts" (i.e., taxable gifts made after 1976). The federal estate tax is repealed for one year in 2010 and will return to 2001 rates and rules in 2011. For decedents dying after December 31, 2010, the tentative tax will be calculated by applying the following tax rates:

• For amounts not greater than $10,000, the tax liability is 18% of the amount.
• For amounts over $10,000 but not over $20,000, the tentative tax is $1,800 plus 20% of the excess over $10,000.
• For amounts over $20,000 but not over $40,000, the tentative tax is $3,800 plus 22% of the excess over $20,000.
• For amounts over $40,000 but not over $60,000, the tentative tax is $8,200 plus 24% of the excess over $40,000.
• For amounts over $60,000 but not over $80,000, the tentative tax is $13,000 plus 26% of the excess over $60,000.
• For amounts over $80,000 but not over $100,000, the tentative tax is $18,200 plus 28% of the excess over $80,000.
• For amounts over $100,000 but not over $150,000, the tentative tax is $23,800 plus 30% of the excess over $100,000.
• For amounts over $150,000 but not over $250,000, the tentative tax is $38,800 plus 32% of the excess over $150,000.
• For amounts over $250,000 but not over $500,000, the tentative tax is $70,800 plus 34% of the excess over $250,000.
• For amounts over $500,000 but not over $750,000, the tentative tax is $155,800 plus 37% of the excess over $500,000.
• For amounts over $750,000 but not over $1,000,000, the tentative tax is $248,300 plus 39% of the excess over $750,000.
• For amounts over $1,000,000 but not over $1,250,000, the tentative tax is $345,800 plus 41% of the excess over $1,000,000.
• For amounts over $1,250,000 but not over $1,500,000, the tentative tax is $448,300 plus 43% of the excess over $1,250,000.
• For amounts over $1,500,000 but not over $2,000,000, the tentative tax is $555,800 plus 45% of the excess over $1,500,000.
• For amounts over $2,000,000 but not over $2,500,000, the tentative tax is $780,800 plus 49% of the excess over $2,000,000.
• For amounts over $2,500,000 but not over $3,000,000, the tentative tax is $1,025,800 plus 53% of the excess over $2,500,000.
• For amounts over $3,000,000, the tentative tax is $1,290,800 plus 55% of the excess over $3,000,000.

Additionally, estates of decedents that die after December 31, 2010, will be subject to a 5% surcharge on the excess of their estate over $10,000,000.

The tentative tax is reduced by gift tax that would have been paid on the adjusted taxable gifts, based on the rates in effect on the date of death (which means that the reduction is not necessarily equal to the gift tax actually paid on those gifts).

Although the above tax table looks like a system of progressive tax rates, there is a unified credit against the tentative tax which effectively eliminates any tax on the first $3,500,000 of the estate (or the first $3,500,000 on a combination of taxable gifts during lifetime and a taxable estate at death), so the federal estate tax is effectively a flat tax of 45% once the unified credit exclusion amount has been exhausted.

Credits against tax

There are several credits against the tentative tax, the most important of which is a "unified credit" which can be thought of as providing for an "exemption equivalent" or exempted value with respect to the sum of the taxable estate and the taxable gifts during lifetime.

For a person dying during 2006, 2007, or 2008, the "applicable exclusion amount" is $2,000,000, so if the sum of the taxable estate plus the "adjusted taxable gifts" made during lifetime equals $2,000,000 or less, there is no federal estate tax to pay. According to the Economic Growth and Tax Relief Reconciliation Act of 2001, the applicable exclusion will increase to $3,500,000 in 2009, the estate tax is repealed in 2010, but then the act "sunsets" in 2011 and the estate tax reappears with an applicable exclusion amount of only $1,000,000 (unless Congress acts before then).

The estate tax credit or exemption equivalent should not be confused with the federal gift tax credit or exemption equivalent. The gift tax exemption is frozen at $1,000,000 and does not increase, as does the estate tax exemption.

If the estate includes property that was inherited from someone else within the preceding 10 years, and there was estate tax paid on that property, there may also be a credit for property previously taxed.

Before 2005, there was also a credit for non-federal estate taxes, but that credit was phased out by the Economic Growth and Tax Relief Reconciliation Act of 2001.

Requirements for filing return and paying tax

For estates larger than the current federally exempted amount, any estate tax due is paid by the executor, other person responsible for administering the estate, or the person in possession of the decedent's property. That person is also responsible for filing a Form 706 return with the Internal Revenue Service. The return must contain detailed information as to the valuations of the estate assets and the exemptions claimed, to ensure that the correct amount of tax is paid. The deadline for filing the Form 706 is 9 months from the date of the decedent's death. The payment may be extended, but not to exceed 12 months, but the return must be filed by the 9 month deadline.

Exemptions and tax rates

Year	Exclusion Amount	Max/Top tax rate
2001	$675,000	55%
2002	$1 million	50%
2003	$1 million	49%
2004	$1.5 million	48%
2005	$1.5 million	47%
2006	$2 million	46%
2007	$2 million	45%
2008	$2 million	45%
2009	$3.5 million	45%
2010 *	Repealed *	0% *
2011	$1 million	55%
* See paragraph in this section   with respect to reinstatement   of this exemption

As noted above, a certain amount of each estate is exempted from taxation by the federal government. Below is a table of the amount of exemption by year an estate would expect. Estates above these amounts would be subject to estate tax, but only for the amount above the exemption.

For example, assume an estate of $3.5 million in 2006. There are two beneficiaries who will each receive equal shares of the estate. The maximum allowable credit is $2 million for that year, so the taxable value is therefore $1.5 million. Since it is 2006, the tax rate on that $1.5 million is 46%, so the total taxes paid would be $690,000. Each beneficiary will receive $1,000,000 of untaxed inheritance and $405,000 from the taxable portion of their inheritance for a total of $1,405,000. This means that they would have paid (or, more precisely, the estate would have paid) a taxable rate of 19.7%.

As shown, the 2001 tax act will repeal the estate tax for one year—2010—and then readjust it in 2011 to the year 2002 exemption level with a 2001 top rate.

On April 2, 2009, the Senate agreed on S.AMDT.873, an amendment to S.CON.RES.13, a non-binding concurrent resolution setting forth the congressional budget for FY 2010, which was later passed. If enacted in the FY 2010 budget, a new $5,000,000 exemption level will be created with a maximum tax rate of 35%.

Inheritance tax at the state level

Many U.S. states also impose their own estate or inheritance taxes (see Ohio estate tax for an example), and some, such as Kentucky, impose both. Some states "piggyback" on the federal estate tax law in regard to estates subject to tax (i.e., if the estate is exempt from federal taxation it is also exempt from state taxation). Some states' estate taxes, however, operate independently of federal law, so it is possible for an estate to be subject to state tax while exempt from federal tax. In Kentucky, the inheritance tax operates separately from either the state or federal estate tax; the inheritance tax is imposed on beneficiaries and based on the amount received from the estate, with some close relatives exempt from this tax by statute.

Tax avoidance

Estate tax rates and complexity have driven a vast array of support services to assist clients with a perceived eligibility for the estate tax to develop tax avoidance techniques. Many insurance companies maintain a network of life insurance agents, all providing financial planning services, guided to avoid paying estate taxes. Many suggested techniques involve products that can be costly, though the outlay is often only a small fraction of the estate tax liability. Brokerage and financial planning firms also use estate planning, including estate tax avoidance, as a marketing technique. Many law firms also specialize in estate planning, tax avoidance, and minimization of estate taxes.

The first technique many use is to combine the tax exemption limits for a husband and wife by their testamentary documents, using what is known as a credit shelter trust. Many, but not all, other techniques recommended by those selling products with high fees, do not really avoid the estate tax, rather they claim to provide a leveraged way to have liquidity to pay for the tax at the time of death. It is very important for those whose primary wealth is in a business they own, or real estate, or stocks, to seek professional legal advice. In one technique pushed by commissioned agents, an irrevocable life insurance trust is recommended, where the parents give their children funds to pay the premiums on life insurance on the parents. Structured in this way, life insurance proceeds can be free of estate tax. However, if the parents have a very high net worth and the life insurance policy would be inadequate in size due to the limits in premiums, a charitable remainder trust may be recommended, but should be critically reviewed. The client, however, may lose access to the asset placed in the CRUT. Proponents of the estate tax, and lobbyists for high commission financial products, argue the tax should be maintained to encourage this form of charity.

Debate

Arguments in favor

Proponents of the estate tax argue that it serves to prevent the perpetuation of wealth, free of tax, in wealthy families and that it is necessary to a system of progressive taxation. Proponents point out that the estate tax affects only estates of considerable size (in 2009, over $3.5 million USD, and $7 million USD for couples) and provides numerous credits (including the unified credit) that allow a significant portion of even large estates to escape taxation. Regarding the tax's effect on farmers, proponents counter that this criticism is misguided as there is an exemption built into the law that is specifically designed for family-owned farms. Proponents note that abolishing the estate tax will result in tens of billions of dollars being lost annually from the federal budget.

Furthermore, supporters argue that many large fortunes do not represent taxed income or savings, that wealth is not being taxed but merely the transfer of that wealth, and that many large fortunes represent unrealized capital gains which (because of a step up in basis at the time of death) will never be taxed as capital gains under the federal income tax..

Another argument in favor of the estate tax relates to comparative incentives. Proponents argue that the estate tax is a better source of revenue than the income tax, which is said to directly disincentivize work. While all taxes have this effect to a degree, some argue that the estate tax is less of a disincentive since it does not tax money that the earner spends, but merely that which he or she wishes to give away for non-charitable purposes. Moreover, some argue that allowing the rich to bequeath unlimited wealth on future generations will disincentivize hard work in those future generations. Winston Churchill argued that estate taxes are “a certain corrective against the development of a race of idle rich”. Research suggests that the more wealth that older people inherit, the more likely they are to leave the labor market.

Proponents of the estate tax tend to object to characterizations that it operates as a double or triple taxation. Proponents point out that many of the earnings that are subject to the estate tax were never taxed because they were "unrealized" gains. Others note that double and triple taxation is common (through income, property, and sales taxes, for instance) or argue that the estate tax should be seen as a single tax on the inheritors of large estates.

Supporters of the estate tax also point to longstanding historical precedent for limiting inheritance, and note that current generational transfers of wealth are greater than they have been historically. In ancient times, funeral rites for lords and chieftains involved significant wealth expenditure on sacrifices to religious deities, feasting, and ceremonies. The well-to-do were literally buried or burned along with most of their wealth. These traditions may have been imposed by religious edict but they served a real purpose, which was to prevent accumulation of great disparities of wealth, which tended to destabilize societies and lead to social imbalance, eventual revolution, or disruption of functioning economic systems. This economic safety valve is now partially imposed via the estate tax, which strips excess wealth from the recently dead and diverts it back to the society as a whole.

It is sometimes posited that children don't have any moral right to the wealth of their parents after they have grown up, and the transfer of wealth works against many of the fundamental ideals of society, such as the American Dream. Therefore a heavy estate tax can be considered an ethical form of tax.

Proponents also note that the arguments of estate tax opponents are occasionally disingenuous. For example, while opponents point to family farmers and small business owners in an effort to demonstrate the unfairness or overreach of the tax, proponents note that nearly all family farmers and small business owners are exempt from or are not subject to the estate tax.

One of the world's wealthiest men, Warren Buffett, CEO of Berkshire Hathaway, and the father of another of the world's wealthiest men (Microsoft founder Bill Gates), William H. Gates, Sr., favor the estate tax.

Arguments against

One argument against the estate tax is that the tax obligation in itself can assume a disproportionate role in planning, possibly overshadowing more fundamental decisions about the underlying assets. In certain cases, this is claimed to create an undue burden. For example, pending estate taxes could become an artificial disincentive to further investment in an otherwise viable business – increasing the appeal of tax- or investment-reducing alternatives such as liquidation, downsizing, divestiture, or retirement. This could be especially true when an estate's value is about to surpass the exemption equivalent amount. Older individuals owning farms or small businesses, when weighing ongoing investment risks and marginal rates of return in light of tax factors, may see less value in maintaining these taxable enterprises. They may instead decide to reduce risk and preserve capital, by shifting resources, liquidating assets, and using tax avoidance techniques such as insurance policies, gift transfers, trusts, and tax free investments

The estate tax burden falls heavily on farmers because agriculture has a lot of capital assets, such as land and equipment, in order to generate the same amount of income that other types of businesses generate with less. The return of the estate tax—and the higher rate and lower exemption—could result in as many as 10 percent of farms and ranches owing estate taxes in 2011, compared with about 1.5 percent of agricultural operations in 2009. Individuals, partnerships, and family corporations own 98 percent of the nation’s 2.2 million farms and ranches. The estate tax often forces the surviving family members to sell land, buildings or equipment to keep their operation going. In 2011, when the estate tax returns with a top rate of 55 percent and a $1 million exemption, as many as one in 10 farms and ranches (roughly 3,500-4,000 estates) would be subjected to the estate tax than there were in 2009.

Another argument against the estate tax is a moral one. Proponents continually offer that the inheritor of wealth doesn't deserve it because, simply, he or she did not earn it directly. While it may be true that the receiver of wealth may not have a direct moral claim to that wealth, those opposed to the estate tax would argue that logically, neither does anyone else. This argument would further assert that the rights to that wealth lie with the deceased person, the person who earned it originally and who paid taxes on it continually while living. The rights lie with the deceased to dispose of his or her wealth as he or she sees fit, whether that disposition be in the form of a charitable gift, a check to the government, or a gift to a chosen heir. (Rand, 1967) This argument would assert that anyone claiming that an heir does not deserve inherited wealth could certainly not claim a right to use the power of government to confiscate that wealth on behalf of unknown others who most certainly would not deserve the wealth by that same line of thinking. To quote an Investor's Business Daily editorial, "People should not be punished because they work hard, become successful and want to pass on the fruits of their labor, or even their ancestors' labor, to their children. As has been said, families shouldn't be required to visit the undertaker and the tax collector on the same day.".

Opponents also point out that many attempts at validating the estate tax assume the superiority of socialist/collectivist economic models. For example, proponents of the tax commonly argue that "excess wealth" should be stripped from the recently deceased without offering a definition of what "excess wealth" could possibly mean and why it would be undesirable if procured through the honest effort of a productive life. Such statements exhibit a predilection for collectivist principles that opponents of the estate tax have long opposed on moral grounds.

Previous Tax Foundation research has found the estate tax acts as a strong disincentive toward entrepreneurship. A 1994 study found that the estate tax’s 55 percent rate at the time had roughly the same disincentive effect as doubling an entrepreneur’s top effective marginal income tax rate. The estate tax has also been found to impose a large compliance burden on the U.S. economy. Some past economic studies have estimated the compliance costs of the federal estate tax to be roughly equal to the amount of revenue raised—nearly five times more costly per dollar of revenue than the federal income tax—making it one of the nation’s most inefficient revenue sources.

The "death tax" and "estate tax" neologisms

The terms "death tax" and "estate tax" are neologisms used by policy makers and critics to describe the tax in a way that conveys additional meaning. Also used are death duties and inheritance taxes. The original taxes were known simply as death duties..

The neologism "estate tax" began to be used by policy makers to make it appear that only estates or third party administrators and executors were being taxed, rather than heirs or the dead. The neologism "death tax" more directly refers back to the original use of "death duties" to address the fact that death itself triggers the tax or the transfer of assets on which the tax is assessed.

Many opponents of the estate tax refer to it as the "death tax" in their public discourse partly because a death must occur before any tax on the deceased's assets can be realized and also because the tax rate is determined by the value of the deceased's assets rather than the amount each inheritor receives. Neither the number of inheritors nor the size of each inheritor's portion factors into the calculations for rate of the Estate Tax.

Proponents of the tax say this is an imprecise use of the term "death tax," which has been used since the nineteenth century to refer to all the death duties applied to transfers at death: estate, inheritance, succession and otherwise. This also is how the phrase "death taxes" is used in the United States' Internal Revenue Code.

The recent political use of "death tax" as a synonym for "estate tax" was popularized by Jack Faris of the National Federation of Independent Business during the Speakership of Newt Gingrich. It has been widely but inaccurately attributed to Republican pollster Frank Luntz. In a memo, Luntz wrote that the term "death tax" "kindled voter resentment in a way that 'inheritance tax' and 'estate tax' do not" .

Linguist George Lakoff alleges the "estate tax" phrase is a deliberate and carefully calculated neologism which is used as a propaganda tactic to aid in the repeal of estate taxes. However the use of "death tax" rather than "estate tax" in the wording of questions in the 2002 National Election Survey increased support for estate tax repeal by only a few percentage points.

Future of tax on inheritances

Congress has passed tax laws that have made numerous, temporary changes to both the estate tax rate and the exemption amount. Since 2002, the top rate has decreased incrementally from 50%, and the exemption amount has increased incrementally from $1 million. In 2009 the rate is 45% and the exemption amount is $3.5 million. On January 1, 2010 a "one year repeal" of the tax is scheduled to be effectuated by a temporary, one-year-only rate of 0%, but on January 1, 2011 the estate tax is scheduled to return at a top rate of 55% and the exemption amount is scheduled to drop back down to $1.0 million. Many legislative tax analysts suspect that Congress and President Obama will not permit this legislatively scheduled repeal-and-increase scheme to actually go into effect between January 1, 2010 and January 1, 2011. To avoid the temporary repeal and subsequent reinstatement of the tax at the higher rate, the 2009 rate of 45% and exemption amount of 3.5 million could be extended beyond December 31, 2009, or the rate and exemption amount could be permanently fixed at some amount greater than zero before that date.

If the law does not change, for 2010 property transferred from decedents will be treated as if it is transferred by gift. This means the basis of the property for calculating capital gains when the recipient eventually sells the property will be the same basis as in the hands of the decedent. This is generally called carryover basis. However most recipients will effectively get the same result they would receive under present law, because section 1022 allows the executor of an estate to allocate up to 1.3 million in basis for singles and 3 million for surviving spouses to the property of the estate. This will effectively give most recipients a tax basis in the property equal to the full market value ie. "step up basis". See 26 U.S.C. § 1022.

Legislation to extend raising the unified credit (beyond year 2010) of the estate tax has passed the House of Representatives. It also passed in the Senate in June, 2006. Later when the conference committee added it to a bill to increase the minimum wage, the combined bill failed to garner 60 votes to invoke cloture in the United States Senate, and it failed to pass. Congress may attempt to enact an estate tax during 2010, making it retroactive to January 1, 2010. Such retroactivity is likely constitutional, as the Supreme Court has approved retroactive taxation directed against estates in the past.

Death elasticity

A few commentators have been concerned that changes in estate tax provides incentives to change the timing of death, a phenomenon termed "death elasticity." Dr. George E. Mendenhall has warned that large discontinuities in the estate tax rates, as planned in 2010 and 2011, may provide incentives to hasten death (late 2010) or prolong life (late 2009) for large financial implication. [8]

IRS audits

In July 2006, the IRS confirmed that it planned to cut the jobs of 157 of the agency’s 345 estate tax lawyers, plus 17 support personnel, by October 1, 2006. Kevin Brown, an IRS deputy commissioner, said that he had ordered the staff cuts because far fewer people were obliged to pay estate taxes than in the past.

Estate tax lawyers are the most productive tax law enforcement personnel at the I.R.S., according to Brown. For each hour they work, they find an average of $2,200 of taxes that people owe the government. [9]

Related taxes

The federal government also imposes a gift tax, assessed in a manner similar to the estate tax. One purpose is to prevent a person from avoiding paying estate tax by giving away all his or her assets before death.

There are two levels of exemption from the gift tax. First, transfers of up to (as of 2010) $13,000 per (recipient) person per year are not subject to the tax. Individuals can make gifts up to this amount to each of as many people as they wish each year. In a marriage, a couple can pool their individual gift exemptions to make gifts worth up to $26,000 per (recipient) person per year without incurring any gift tax. Second, there is a lifetime credit on total gifts until a combined total of $1,000,000 (not covered by annual exclusions) has been given.

If an individual or couple makes gifts of more than the limit, gift tax is incurred. The individual or couple has the option of paying the gift taxes that year, or to use some of the "unified credit" that would otherwise reduce the estate tax. In some situations it may be advisable to pay the tax in advance to reduce the size of the estate. Generally, clients choose not to pay a gift tax until the lifetime exemption is exceeded. Paying a gift tax for gifts in excess of the lifetime exemption can be advantageous, if the client lives at least three years, as the gift tax is tax exclusive, and the estate tax is tax inclusive. Funds used to pay the estate tax are taxed in a decedent's gross estate, but gift taxes paid more than three years prior to death are not included.

But in many instances, an estate planning strategy is to give the maximum amount possible to as many people as possible to reduce the size of the estate, the effectiveness of which depends on the lifespan of the transferor and the number of donees. Clients often choose to use a trust, sometimes referred to as a Cristofani Trust, to hold such gifts.

Furthermore, transfers (whether by bequest, gift, or inheritance) in excess of $1 million may be subject to a generation-skipping transfer tax if certain other criteria are met.

See also

• Inheritance tax
• Lyeth v. Hoey

Further reading

• Cost and Consequences of the Federal Estate Tax, A Joint Economic Committee Study, http://www.house.gov/jec/publications/109/05-01-06estatetax.pdf
• New International Survey Shows U.S. Death Tax Rates Among Highest, American Council for Capital Formation, August 2007, http://www.accf.org/media/dynamic/1/media_133.pdf
• Ian Shapiro and Michael J. Graetz, Death By A Thousand Cuts: The Fight Over Taxing Inherited Wealth, Princeton University Press (February, 2005), hardcover, 372 pages, ISBN 0-691-12293-8
• William H. Gates, Sr. and Chuck Collins, with foreword by former Federal Reserve Chairman Paul Volcker, Wealth and Our Commonwealth: Why America Should Tax Accumulated Fortunes, Beacon Press (2003)

External links

• nodeathtax.org, American Family Business Institute, a trade association of family business owners and farmers working for repeal of the Estate Tax.
• IRS publication 950, Introduction to Estate and Gift Taxes, revised September 2004.
• "Estate Tax Pyramid Scheme", a June 2006 article by former US Secretary of Labor Robert Bernard Reich arguing for the estate tax.
• "Death and taxes 2010" A visual guide to where your federal tax dollars (Full resolution poster)
• Deathtax.com an anti-inheritance tax campaign by a Seattle family-owned newspaper.
• Gross Estate and Net Estate Tax on Farms and Businesses in 2004, from the Tax Policy Center website.
• ...Ads exaggerate what the tax costs farmers, small businesses..., a June 2005 article from FactCheck
• Death tax deception Article from Dollars & Sense magazine.
• Sterling Harwood, "Is Inheritance Immoral?" in Louis P. Pojman, Political Philosophy (McGraw Hill, 2002). www.sterlingharwood.com.
• David Runciman, London Review of Books, 2 June 2005, "Tax Breaks for Rich Murderers"
• Wiki Legal Comment, Night of the Living Dead: Why Death Tax Won’t Stay Dead, Wiki Legal Journal This article is part of a study to determine if a wiki community can produce high quality legal research, November 18, 2006 (this comment explores the various proposals Congress has considered with a special emphasis on the interaction of estate tax on state revenue and philanthropy.).
• A program at mystatewill.com gives a quick calculation of the federal estate tax.