Federal Estate Tax, Generally

The federal estate tax is imposed upon the total value of each decedent's gross estate. Basically, everything a person owns at the time of death is taxable.  Even though the federal estate tax is imposed against everything that is owned, it is only calculated against the taxable estate or the value of all property that remains after the subtraction of allowable deductions.

Allowable deductions include the decedent's debts, funeral expenses, and costs of administration. The value of testamentary gifts made to qualified charitable organizations and to a surviving spouse who is an American citizen are also deducted from the gross estate before the Federal estate tax is determined.

Aside from the marital deduction, the federal estate tax rate does not depend on any beneficiary's or heir's relationship with the decedent.

See: Federal Estate Tax, Exclusion Amount; Federal Estate Tax, Marital Deduction