Q:

What is the estate tax?

A:

Quick Answer

The estate tax is tax on property transferred from a deceased person to his heirs, explains the Center on Budget and Policy Priorities. Only wealthy estates pay estate tax because the levy applies to estates that exceed $5.43 million per person, as of 2015.

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Full Answer

The amount of $5.43 million per person is subject to inflation, explains Nolo. The amount may increase in future years. If a person's estate is worth less than the exemption amount, the government requires no federal tax. If a person made taxable gifts during his lifetime, the exemption reduces by the amount of those taxable gifts.

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