What is the Death Tax?

The death tax (a.k.a., the federal estate tax) is a tax applied to the transfer of a person’s assets at death. It is defined by the Internal Revenue Service as “a tax on your right to transfer property at your death.”[1]


Under current law, the estate tax was repealed for one year on January 1, 2010. On January 1, 2011 the estate tax is set to return at a rate of 55 percent on all assets above a $1 million exemption amount.

The estate tax is imposed on any and all life-savings. This includes:

• personal property (such as a home, cars, furniture, artwork)

• business assets (property, machinery and inventory)

• investments (stocks, bonds and real estate)

The estate tax is paid by the recipients of an inheritance – most often family heirs – and is due within 9 months of the decedent’s death. If the heirs do not have sufficient cash, personal property and business assets must be sold to pay the tax.

In the case of family business owners and farmers, the tax often exceeds the ability of the family to pay. These heirs are consequently forced to sell off part, if not all, of their enterprise in order to pay the tax.

To learn more on the subject The Texas Agrilife Extension Service and Leon County Farm Bureau will be providing an educational program on September 10, 2010 at 12:00noon in the First United Methodist Church in Centerville. To register for this program call 903.536.2531. Extension programs serve of all ages regardless of socioeconomic level, race, color, sex, religion, disability, or national origin. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating serve of all ages regardless of socioeconomic level, race, color, sex, religion, disability, or national origin. The Texas A&M University System, U.S. Department of Agriculture, and the County Commissioners Courts of Texas Cooperating