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Less Than 1 Percent of Farm Estates Owed Federal Estate Taxes in 2020

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  • McDonald, Tia
  • Durst, Ron

Abstract

Created in 1916, the Federal estate tax is a tax on the transfer of property from a deceased person to their heirs at death. Because it applies only to that portion of an estate’s value that exceeds an exemption amount, the tax has never affected a large share of estates. Moreover, legislation enacted over the last several years has greatly reduced the scope of the tax. The tax exemption has increased from $675,000 in 2000 to $11.58 million in 2020. Under present law, the estate of a person who at death owns assets in excess of the exemption amount must file a Federal estate tax return. However, only returns that have an estate above the exemption after deductions for expenses, debts, and bequests to a surviving spouse or charity are subject to tax at a rate of 40 percent.

Suggested Citation

  • McDonald, Tia & Durst, Ron, 2021. "Less Than 1 Percent of Farm Estates Owed Federal Estate Taxes in 2020," Amber Waves:The Economics of Food, Farming, Natural Resources, and Rural America, United States Department of Agriculture, Economic Research Service, vol. 2020(04), April.
    • Handle: RePEc:ags:uersaw:310380
    DOI: 10.22004/ag.econ.310380
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