finance calculator
Estimate federal and state estate tax liabilities, exemptions, and net inheritance to heirs.
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Net Estate to Heirs
$14,684,000
Total Estate Taxes Owed
$3,316,000
Estate tax exclusions and state tax rules adjust annually. Save this page to recalculate liabilities and exemption utilization when asset values or tax laws are updated.
Formula
\text{Taxable Estate} = \text{Gross Estate} - \text{Liabilities} - \text{Bequests}Taxable estate is gross asset value minus liabilities and charitable allocations.
Step by step
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Summary
Net to Heirs
$14,684,000
After-tax inheritance.
Total Taxes
$3,316,000
Combined federal & state liabilities.
Taxable Estate
$18,000,000
Gross minus liabilities & deductions.
Federal Exemption
$NaN
Effective exclusion limit used.
D3 visualization
Tax liabilities vs. net distribution to heirs.
Guide
The federal estate tax is a levy on the transfer of a deceased person's estate to their heirs, applicable when the total taxable estate value exceeds the lifetime exclusion limit.
The federal gift tax applies to transfers made during an individual's lifetime, sharing a unified credit with the estate tax. This means that taxable gifts made during your lifetime reduce the remaining exclusion limit available at death.
To determine the estate tax liability, we first calculate the Gross Estate (market value of all assets, including real estate, investments, business interests, and life insurance policies).
The Taxable Estate is calculated by subtracting allowable deductions from the Gross Estate:
$$\text{Taxable Estate} = \text{Gross Estate} - \text{Liabilities} - \text{Funeral \& Admin Expenses} - \text{Marital Deductions} - \text{Charitable Bequests}$$
Where Marital Deductions allow unlimited tax-free transfers to a surviving spouse who is a US citizen.
The federal lifetime estate tax exclusion (default $13,610,000) represents the amount an individual can transfer to heirs tax-free.
Under current tax laws, exemption portability allows a surviving spouse to utilize any unused portion of their deceased spouse's exclusion limit (DSUE), effectively doubling the exclusion limit for married couples to $27,220,000:
$$\text{Effective Exclusion} = \begin{cases} \text{Federal Exclusion} & \text{if Single} \\ 2 \times \text{Federal Exclusion} & \text{if Married} \end{cases}$$
In addition to federal estate taxes, many states levy their own estate or inheritance taxes. State estate tax exemptions are typically much lower than the federal limit (often starting at $1,000,000 to $5,000,000).
State estate tax paid is generally deductible against the federal gross estate, reducing the federal taxable estate balance:
$$\text{Federal Estate Tax} = \max(0, \text{Taxable Estate} - \text{State Estate Tax} - \text{Federal Exemption}) \times \text{Federal Tax Rate}$$
Exemption Portability
The transfer of unused estate tax exemption to a surviving spouse.
Unified Credit
The tax credit combining lifetime gift and estate tax exemptions.
Gross Estate
The total fair market value of all assets owned by an individual at death.