The Death Tax Bogeyman – More Imaginary than Real

The federal estate and gift tax has been law since World War I. In its simplest terms, it provides for the taxation of gifts made at death.

A certain group of influential persons don’t like this tax, and have continually attacked it, using the pejorative label “death tax.”

Like all taxes, the estate and gift tax has an exemption. Which is to say, if the gift is less than a certain amount, then no tax applies. As of 2021, the exemption amount is $11,700,000 per donor, net of encumbrances.

As a result, very, very few persons are subject to the estate and gift tax. According to a recent publication, “In 2018, only approximately 4,000 decedents died with a taxable estate and, of those taxable estates, approximately 1,900 owed any estate tax.”

Which fact is conveniently omitted by the persons who attack the estate and gift tax – it only applies to extremely wealthy individuals. CDC statistics state “A total of 2,839,205 resident deaths were registered in the United States in 2018.”

Which means that only 1,900 of those persons left an estate that incurred the estate and gift tax – that’s 0.0669% of all 2018 deaths.

Very, very few persons are subject to the estate and gift tax.

Leave a comment

Your email address will not be published. Required fields are marked *