The formula
How it works
Estimate the federal estate tax on an inheritance. Enter the estate’s value and the exemption amount, and the calculator shows the taxable estate, the tax due and what passes to heirs.
FAQ
How does the estate tax exemption work?
Only the value of an estate above the exemption is taxed. In 2024 the federal exemption is $13.61 million per person, so estates below that owe no federal estate tax at all. The exemption is adjustable here because it changes over time and married couples can combine theirs.
Is the whole estate taxed at 40%?
No — only the portion above the exemption, and only that excess is taxed, at rates that reach a top of 40%. This calculator applies the top rate to the taxable amount as a close estimate for large estates. Small estates over the threshold face lower effective rates due to the graduated schedule.
Do I also owe state estate tax?
Some states levy their own estate or inheritance tax with a lower exemption than the federal one, so a smaller estate can still owe state tax even when no federal tax is due. Check your state’s rules separately, since this calculator only estimates the federal amount.
Can gifting reduce the taxable estate?
Yes — gifts made during life, within the annual and lifetime gift tax limits, remove that value from the estate and reduce what is left to tax at death. Large or ongoing gifting strategies are usually planned with an estate attorney or tax adviser.
Does life insurance count toward the taxable estate?
A life insurance payout is generally included in the gross estate if the deceased owned the policy, even though the proceeds pass income-tax-free to beneficiaries. Placing a policy in an irrevocable trust is a common way to keep it out of the taxable estate.
What is portability between spouses?
Portability lets a surviving spouse add any unused exemption from their late spouse to their own, effectively doubling the exemption for a married couple. It must be elected on a timely filed estate tax return for the first spouse to pass away.
Does the estate tax affect the cost basis heirs receive?
Separately from estate tax, most inherited assets get a “step-up” in cost basis to fair market value at death, which can reduce or eliminate capital gains tax if heirs later sell. This applies whether or not the estate owes any estate tax.
About the estate tax calculator
This calculator estimates the federal estate tax — the tax on the transfer of a person’s assets at death. Because a large exemption shields most estates entirely, the tax only applies to the value above the threshold. The calculator subtracts the exemption from the estate’s value, applies the estate tax rate to what remains, and shows both the tax and the amount that passes to heirs.
How to use it
Enter the gross value of the estate and the exemption amount that applies — the 2024 federal exemption is $13.61 million per individual. Adjust the top rate if needed. The calculator shows the taxable estate, the estimated tax and the net inheritance. For example, a $15 million estate with a $13.61 million exemption has about $1.39 million taxed, giving roughly $556,000 of tax.
The formula
The estimate is . Only the excess over the exemption is taxable, and the top federal rate is 40%. The net to heirs is the estate value minus the tax. The real schedule is graduated up to 40%, but for estates comfortably above the exemption the top-rate estimate is very close.
Where it is used
Families and their advisers use it in estate planning, to gauge whether an estate is likely to owe federal tax and how strategies like gifting, trusts or spousal exemptions could reduce it. It is also useful for understanding headlines about the “death tax” and how few estates actually pay it. Because thresholds and rates change with legislation, the adjustable inputs let it stay current.