Understanding the Federal Estate Tax
For most people, the federal estate tax is not an issue because of the high exemption amount. However, for large estates, the tax rate can be as high as 40% on the value exceeding the exemption.
Key Concepts
- Exemption Amount: The amount you can pass to heirs tax-free. For 2024, this is $13.61 million per individual.
- Gross Estate: The total value of all your assets at the time of death, including real estate, cash, stocks, and life insurance.
- Portability: A surviving spouse can often use the unused portion of their deceased spouse's exemption.