# Estate & Gift Tax Calculator Estimate federal and state estate and gift tax liabilities, applicable exemptions, and net inheritance passed on to heirs. --- - **Canonical URL:** https://dothecalculation.com/calculators/estate-tax-planning-calculator - **Category:** Financial calculators - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## Estate & Gift Tax Calculator — Federal and State Liability Estimator Estimate federal and state estate tax liabilities, analyze exemption utilization, and calculate net distributions to heirs. - Federal lifetime exclusion limits (individual & marital) - State-level estate tax rates & thresholds - Heir distribution breakdown charts ## Understanding Federal Estate and Gift Taxes 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. ## How to Use This Calculator Enter your gross estate value (the total market value of real estate, investments, business interests, retirement accounts, and life insurance you own), outstanding liabilities, any charitable bequests, and your marital status. The calculator applies the federal exclusion limit (and doubles it automatically for married filers claiming portability), layers in a state estate tax if applicable, and returns the federal tax, state tax, total tax, and net amount passed to your heirs. ## Calculating the Taxable Estate 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. ## Worked Example: $20 Million Estate, Single Filer Gross estate $20,000,000, liabilities $1,000,000, charitable bequests $1,000,000, single filer, federal exclusion $13,610,000, state exemption $5,000,000, state estate tax rate 12%. Taxable estate: $20,000,000 − $1,000,000 − $1,000,000 = $18,000,000. Effective federal exclusion (single, no portability): $13,610,000 — 100% utilized. State estate tax: applied to the taxable estate above the $5,000,000 state exemption at 12%, coming to $1,560,000. Federal estate tax (after deducting the state tax paid and the federal exclusion): $1,756,000. Total estate taxes: $1,756,000 + $1,560,000 = $3,316,000. Net estate passed to heirs: $20,000,000 − $1,000,000 (liabilities) − $3,316,000 (taxes) − remaining basis adjustments = $14,684,000 — meaning roughly 16.6% of the original gross estate value goes to federal and state estate taxes combined in this scenario. ## Exemption Portability and Exemption Adjustments 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: $$\text{Effective Exclusion} = \begin{cases} \text{Federal Exclusion} & \text{if Single} \\ 2 \times \text{Federal Exclusion} & \text{if Married} \end{cases}$$ Running the same $20,000,000 estate as married with full portability (effective exclusion $27,220,000) instead of single would eliminate the federal estate tax entirely, since the taxable estate of $18,000,000 falls under the doubled exclusion — leaving only the state estate tax as a liability. Marital status alone can be worth well over a million dollars in federal tax exposure. ## State-Level Estate Taxes 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: $$\text{Federal Estate Tax} = \max(0, \text{Taxable Estate} - \text{State Estate Tax} - \text{Federal Exemption}) \times \text{Federal Tax Rate}$$ ## Related Calculators Heirs typically receive a stepped-up cost basis on inherited assets — model what a later sale would owe with the [capital gains calculator](/calculators/capital-gains-calculator), and fold this estate plan into a broader retirement projection with the [retirement calculator](/calculators/retirement-calculator). ## Frequently asked questions ### What is the unlimited marital deduction? The unlimited marital deduction allows an individual to transfer an unlimited amount of assets to their surviving spouse tax-free, provided the spouse is a US citizen. ### What is the difference between an estate tax and an inheritance tax? An estate tax is levied on the value of the deceased person's estate before assets are distributed. An inheritance tax is paid by the heir on the value of the specific assets they receive. ### How does exemption portability work? Exemption portability allows a surviving spouse to inherit the unused lifetime estate tax exclusion of their deceased spouse, effectively doubling their exclusion limit. ### What is the annual gift tax exclusion? The annual exclusion is the amount you can give to a single recipient each year without filing a gift tax return or reducing your lifetime exclusion limit (e.g., $18,000 in 2024). ### How do lifetime taxable gifts impact my estate tax exemption? Taxable gifts that exceed the annual exclusion limit must be reported on a gift tax return and are subtracted from your unified lifetime exclusion limit, reducing the amount you can transfer tax-free at death. ### What states have estate taxes? States with estate taxes include Washington, Oregon, Minnesota, Illinois, Maryland, Massachusetts, New York, Connecticut, Rhode Island, Vermont, Maine, and Hawaii, along with Washington D.C. ### What is the federal estate tax rate? The federal estate tax features a progressive rate structure, reaching a maximum marginal tax rate of 40% for taxable amounts exceeding the exemption limit. ### Are life insurance payouts subject to estate tax? Yes. If the deceased owned the life insurance policy at the time of death, the payout value is included in their gross estate and may be subject to estate taxes unless held in an Irrevocable Life Insurance Trust (ILIT). ### What is the unified credit? The unified credit is the tax provision that combines the federal gift and estate tax systems, allowing a single lifetime exemption to cover both lifetime gifts and transfers at death. ### What is a DSUE? DSUE stands for Deceased Spousal Unused Exclusion. It is the unused portion of a deceased spouse's estate tax exemption that is transferred to the surviving spouse through a portability election. ### Is the federal exclusion amount permanent? No. The current elevated federal exclusion is set by legislation that is subject to change through future tax law. Because the exclusion amount directly determines whether an estate owes federal tax at all, high-net-worth households should revisit their estate plan whenever exclusion levels are adjusted rather than relying on a single snapshot. ### How do charitable bequests reduce estate tax? Assets left to a qualified charity are fully deductible from the gross estate before the taxable estate is calculated, similar to the marital deduction. Charitable bequests reduce the taxable estate dollar-for-dollar, which can be a meaningful lever for estates positioned just above the exclusion threshold. ## Related concepts - **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. - **Charitable Bequest** — A gift of assets to a qualified charity made through a will or estate plan, fully deductible from the taxable estate. ## Related guides - [Understanding Calculator Formulas: How DTC Turns Inputs into Results](https://dothecalculation.com/blog/site-guides/understanding-calculator-formulas) — Understand how Do The Calculation formulas are presented, what the explanation blocks mean, and how to verify calculator logic before using a result in a real decision. ## Related calculators - [Take-Home Paycheck Calculator](https://dothecalculation.com/calculators/take-home-paycheck-calculator) — Estimate your net take-home pay per paycheck after 2026 federal tax brackets, FICA, state tax, and pre-tax deductions like 401(k) contributions. - [Word Counter Calculator](https://dothecalculation.com/calculators/word-counter-calculator) — Count words, characters, sentences, and paragraphs in real-time, estimate reading times, and analyze word density/readability. - [Income Tax Calculator](https://dothecalculation.com/calculators/income-tax-calculator) — Estimate your federal income tax liability, applicable deductions, and take-home pay based on income, filing status, and credits. - [Binary, Hexadecimal, & ASCII Multi-Base Converter](https://dothecalculation.com/calculators/binary-hex-ascii-calculator) — Convert integers and strings between binary, hexadecimal, ASCII, and decimal formats instantly with this free online conversion tool. - [Blood Donation Eligibility & Regeneration Tracker](https://dothecalculation.com/calculators/blood-donation-interval-calculator) — Track blood donation eligibility dates, countdowns, and iron and plasma regeneration phases instantly with this free tracker tool. - [Solar Noon, Sunset, & Daylight Duration Calculator](https://dothecalculation.com/calculators/solar-noon-daylight-calculator) — Calculate NOAA solar noon, sunrise, sunset, and total daylight duration based on latitude and longitude coordinates instantly. --- _This tool is for educational purposes only. Mortgage rates, PMI premiums, property valuations, tax assessments, and insurance underwriting details depend on individual credit profiles, local government policies, and lender overlays. Always consult a licensed mortgage broker, financial planner, or tax professional before making property transactions._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/estate-tax-planning-calculator). Quote freely with attribution and a link to this page._