What Assets Are Subject to Federal Estate Tax?

Adler & Adler, PLLC Team

The federal estate tax is based upon the decedent’s “gross estate.” While the term “gross estate” refers primarily to the property which the decedent owned as of the date of his death, it includes certain other property with which the decedent had a connection, as discussed in a series of blog posts (see links to the series below).

This post lists the general categories of property includable in the gross estate and the applicable Internal Revenue Code (I.R.C) sections:

Property Includable in a Decedent’s Gross Estate For Federal Estate Tax Purposes

Property In Which Decedent Owned an Interest at Death:

  • General rule including all property interests owned outright by decedent ­ (I.R.C. §2033)
  • Property subject to decedent’s right of dower or curtesy ­ (I.R.C.§2034)
  • Annuity payments payable to a surviving beneficiary ­ (I.R.C. §2039)
  • Decedent’s interest in jointly owned property ­ (I.R.C. §2040)
  • Property subject to general power of appointment by decedent ­ (I.R.C. §2041)
  • Life insurance proceeds (if the decedent owned the policy, or the proceeds are
  • payable to the estate) ­ (I.R.C. §2042)

Property Transferred Before Death, But With “Strings Attached”:

  • Property previously transferred with a life interest retained ­ (I.R.C. §2036)
  • Property previously transferred but with the transfer effective only when decedent dies ­(I.R.C. §2037)
  • Property previously transferred, with the right retained to revoke the transfer ­ (I.R.C. §2038)

Certain Property Rights Transferred Within Three Years Prior to Death:

  • The three year rule ­ (I.R.C. §2035)

In addition to the property owned outright at the date of death the gross estate for federal estate tax purposes includes certain other property with which the decedent was connected, as discussed in the following blog posts:

Property Transferred With Retained Life Estate – I.R.C. §2036

Transfers Taking Effect at Death – I.R.C. §2037

Revocable Transfers – I.R.C. §2038

Annuities – I.R.C. §2039

Jointly Owned Property – I.R.C. §2040

Property Subject to General Power of Appointment – I.R.C. §2041

Proceeds of Life Insurance – I.R.C. §2042

Gifts Made Within Three Years of Death – I.R.C. §2035

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