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SOI Tax Stats - Estate Tax Study Terms and Concepts

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This page contains information about selected terms and concepts used in SOI's Estate tax articles and tables.

Please visit Estate Tax Statistics to access these articles and tables.

A - F G - L M - R S - Z


Adjusted taxable estate
The sum of taxable estate and adjusted taxable gifts.
Source: Form 706 Part 2, Line 5 (2011 revision)

Adjusted taxable gifts
Adjusted taxable gifts is the total of the taxable gifts made after 1976 that are not included in gross estate.

Certain gifts made during the life of an individual who died before 1982 were automatically included in the gross estate. However, for the estate of an individual who died in 1982 or later years, these gifts were not generally included in the gross estate. Instead, they were added to the taxable estate, creating the adjusted taxable estate for the purposes of determining the estate tax before credits.
Source: Form 706, Part 2, Line 4 (2011 revision)

Allowable deductions
The allowable portion of deductions claimed on Schedules J, K, L, M, and O.  To qualify as deductible, an expense must be allowable under local law and be "actually and necessarily incurred in the administration of the decedent's estate" under Reg.  20.2053-3(a).

Certain expenses and debts reported on Schedules J and K may not be allowable as a deduction under the tax code.  
Source: Form 706, Part 5, Line 22 (2011 revision)

Allowable unified credit
The unified credit is applied as a dollar-for-dollar reduction in estate and/or gift taxes. The unified credit represents the amount of tax on that part of gross estate that is below the filing requirement.

The credit must be used to offset gift taxes on lifetime transfers made after 1976. However, to the extent it is so used, the amount of credit available at death is reduced.
Source: Form 706, Part 2, Line 11 (2011 revision)

Art
This asset category includes items such as paintings, sculptures, busts, engravings, and etchings. 
Source: 
Form 706, Schedules F, G, H  (2011 revision)

Attorney's fees
Fees that have been paid to attorneys for work on behalf of the estate, or amounts that can reasonably be expected to be paid, may be claimed as a deduction against the value of the estate. 
Source: 
Form 706, Schedule J, Part B, Line 2  (2011 revision)

Bequests to surviving spouse
Assets passing from the decedent to the surviving spouse (also called bequests) are reported on Schedule M. Subject to certain limitations, the sum of these assets may be claimed as a deduction.
Source: Form 706, Part 5, Line 20 (2011 revision)

Bond funds
This asset category includes mutual funds composed of a variety of different types of bonds. Also includes mutual funds that could be identified as being composed of bonds, but for which a primary bond type could not be determined.
Source: Form 706, Schedules B, E, F, G, H (2011 revision)

Cash
This asset category includes actual cash, savings and checking accounts held at banks, certificates of deposit (CDs), and call accounts held in a brokerage.

For years prior to 2007, this asset category was recorded separately from cash management accounts. For 2007 and later years, the cash and cash management accounts asset categories were combined into a new asset category, cash assets (see below).
Source: Form 706, Schedules C, E, F, G, H (2011 revision)

Cash assets
This asset category includes all liquid assets, such as actual cash, bank accounts, certificates of deposit (CDs), money market accounts, such as Money Market Deposit Accounts (MMDAs) and Money Market Mutual Funds (MMMFs), and call and sweep accounts held in a brokerage. 

For years prior to 2007, this asset category was divided into two smaller categories - cash and cash management accounts.   For 2007 and later years, only the cash assets category is reported. 
Source:  Form 706, Schedules C, E, F, G, H  (2011 revision) 

Cash management accounts
This asset category includes all money market accounts, such as Money Market Deposit Accounts (MMDAs) and Money Market Mutual Funds (MMMFs), and sweep accounts held in a brokerage. 

For years prior to 2007, this asset category was recorded separately from cash.  For 2007 and later years, the cash and cash management accounts asset categories were combined into a new asset category, cash assets (see above). 
Source:  Form 706, Schedules C, E, F, G, H  (2011 revision) 

Charitable deduction
Contributions to qualifying charitable organizations (also called bequests) made by the decedent's estate are reported, by beneficiary, on Schedule O.  Subject to certain limitations, the sum of these contributions may be claimed as a deduction. 
Source: Form 706, Part 5,  Line 21  (2011 revision)

Closely held stock
This asset category includes the total value of stock held in closely held corporations.  Closely held corporations are those whose ownership is concentrated among a relatively small number of owners, and whose stock is not traded publicly.  These corporations include all S corporations and some C corporations.
Source: Form 706, Schedules B, E, F, G, H  (2011 revision)

Community property
In states which have community property laws, most assets acquired during a marriage are owned jointly by both spouses and are divided equally upon divorce, annulment, or death. 

Currently, there are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.  Assets that are included in this summary value are also included in the appropriate asset categories. 
Source: Form 706, Asset Schedules A - I  (2011 revision)

Corporate and foreign bonds
This asset category includes debt securities issued by businesses and all bonds issued by foreign governments.  Also includes mutual funds that are solely or primarily composed of these bonds. 
Source: Form 706, Schedules B, E, F, G, H  (2011 revision)

Debts and mortgages
Morgages, liens, and other debts of the decedent may be claimed as a deduction against the value of the estate.  This deduction category should not be confused with "Mortgages and notes" (see below), an asset category which represents money owed to the decedent. 
Source: 
Form 706, Schedule K  (2011 revision)

Depletables / intangibles
This asset category is composed of intangible assets, including intellectual property such as copyrights, trademarks, patents, and royalties, and depletable assets, such as minerals, trees, oil, and gas (or rights to them). 
Source: 
Form 706, Schedules F, G, H  (2011 revision)

Executors' commissions
An executor is the individual or institution nominated in a will and appointed by a court to adminster estate property, pay the debts left by the deceased, and to distribute estate property as the deceased directed. 

Executors are entitled to get paid for their services; some executors take this fee or "commission", while others do not.  If taken, the commission may be claimed as a deduction against the value of the estate. 
Source: Form 706, Schedule J, Part B, Line 1  (2011 revision)

Farm assets
This asset category includes assets used in conjunction with a farm or agricultural business, as well as incorporated farms, farm partnerships, and farm sole proprietorships. For 2008 and later years, this category also includes farm land, which was previously included in the "Other real estate" category, described below.
Source: Form 706, Schedules A, B, E, F, G, H  (2011 revision)

Federal savings bonds
This asset category includes all savings bonds issued by the U.S. Department of the Treasury, including Series E, EE, F, G, H, HH, I, and J. 
Source: 
Form 706, Schedules B, E, F, G, H  (2011 revision)

Funeral expenses
Expenses related to the funeral and burial of the decedent may be claimed as a deduction against the value of the estate. 
Source: 
Form 706, Schedule J, Part A  (2011 revision)

Generation skipping tax
A tax imposed on both outright gifts and transfers in trust to or for the benefit of individuals two or more generations younger than the donor, such as grandchildren.  This tax is imposed only if the transfer avoids incurring a gift or estate tax at each generation level. 
Source: 
Form 706, Part 2, Line 17  (2011 revision)

Gift tax paid
A credit was allowed against the estate tax for the Federal gift tax paid on a gift made by a decedent after 1977. No credit, apart from the unified credit, is allowed for any gift tax paid on gifts made before 1976.
Source: Form 706, Part 2, Line 7 (2011 revision)

Gross estate for tax purposes
For estate tax purposes, the gross estate includes all property or interest in property before reduction by debts (except policy loans against insurance) and mortgages, or administrative expenses.

An estate tax return is required in the case of every decedent whose gross estate, at the date of death, exceeded the legal filing requirement in effect for the year of death.Included in the gross estate are items such as real estate, tangible and intangible personal property, certain lifetime gifts made by the decedent, property in which the decedent had a general power of appointment, the decedent's interest in annuities receivable by the surviving beneficiary, the decedent's share in community property, life insurance proceeds (even though payable to beneficiaries other than the estate), dower or curtesy of the surviving spouse (inherited property), and, with certain exceptions, joint estates with right of survivorship and tenancies by the entirety.
Source:  Form 706 Part 2,  Line 1 (2011 revision)

Insurance, face value
This asset category includes the face value of includible life insurance on the decedent's life.  Includible insurance is any insurance on the decedent's life that is payable to the estate at the decedent's death, or is payable to another beneficiary if the decedent retained some ownership of the policy.
Source: 
Form 706, Schedules D, E, G, H  (2011 revision)

Insurance, policy loans 
This item represents borrowing or other indebtedness against life insurance policies includible as part of the gross estate.  This value can be deducted from the face value of insurance to compute the net value of includible life insurance.
Source: 
Form 706, Schedules D, E, G, H  (2011 revision)

Limited partnerships 
A limited partnership is a business organization with one or more general partners, who manage the business and assume legal debts and obligations, and one or more limited partners, who are liable only to the extent of their investments. 

This asset category includes the value of all limited partnerships except for those organized as farms, which are included in the "Farm assets" category.  Hedge funds and private equity funds, usually organized as limited partnerships, are included in this category.
Source:  Form 706, Schedules F, G, B, E, H  (2011 revision)

Mortgages and notes
This asset category includes money owed to the decedent through arrangements such as personal loans made to a business or other individual.  Also includes claims, settlements, and judgments owed to the decedent.  

This asset category should not be confused with the deduction category "Debts and mortgages" (see above), which represents money owed by the decedent to others. 
Source:  Form 706, Schedules C, E, F, G, H  (2011 revision)

Net estate tax
The tax liability of the estate after subtracting a credit for gift taxes paid on post-1976 gifts, the allowable unified credit, and credits for foreign death taxes and tax on prior transfers.
Source:  Form 706 Part 2, Line 16 (2011 revision)

Other assets
This asset category includes items that cannot be assigned to one of the other asset categories, such as precious metals and household or personal items like furniture, clothing, jewelry, and automobiles.  
Source: 
Form 706, Schedules F, G, H  (2011 revision)

Other expenses/losses
Various administration expenses incurred in preserving and administrating the estate may be claimed as a deduction.  These expenses include appraiser's fees, certain court costs, and costs of storing or maintaining assets of the estate.   
Source: 
Form 706, Schedule J, Part B, Line 4  (2011 revision)

Other federal bonds
This asset category includes all debt securities issued by the U.S. Department of the Treasury other than savings bonds, including notes,bills, and bonds issued by U.S. government-chartered enterprises such as Fannie Mae and Freddie Mac.  Also includes mutual funds that are solely or primarily composed of these bonds. 
Source: 
Form 706, Schedules B, E, F, G, H  (2011 revision)

Other limited partnerships 
This asset category includes the value of all limited partnerships except private equity and hedge funds, which are included in the "Private equity and hedge funds" asset category for 2007 and later years, and those organized as farms, which are included in the "Farm assets" category.  

See above for a definition of limited partnerships.  
Source:  Form 706, Schedules F, G, B, E, H (2011 revision)

Other noncorporate business assets
This asset category includes non-farm business assets used in an enterprise owned by the decedents, either as a sole proprietor or as a partner in a business partnership. 

Common business entity types included in this category are sole proprietorships, general partnerships, and limited liability companies (LLCs).  Excludes limited partnerships.  See above for information about limited partnerships.  
Source:  Form 706, Schedules F, G, B, E, H  (2011 revision)

Other real estate
This asset category includes commercial property, undeveloped land, real estate mutual funds (REITs), and residential property other than the personal residence. For years prior to 2008, this asset category also includes farm land, which is part of "Farm assets" in 2008 and later years.
Source: 
Form 706, Schedules A, E, G, H  (2011 revision)

Other tax credits
Other tax credits equals the sum of the credit for foreign death taxes and the credit for tax on prior transfers.  Along with the allowable unified credit, these credits are subtracted from the total tax before credits to compute the net estate tax.
Source:  Form 706 Part 2, Lines 13 and 14  (2011 revision)

Personal residence
This asset category includes the home identified as the decedent's residence.  At most, one item of residential real estate per return is included in this asset category.
Source: 
Form 706, Schedules A, E, G, H  (2011 revision)

Private equity and hedge funds
This asset category includes both private equity funds and hedge funds.  Usually structured as limited partnerships, these private investment funds are typically open to a limited range of professional and wealthy investors and pay performance fees to their investment managers. 

Hedge funds typically hold a broad range of investments, including some not available to mutual funds under current regulations, and have a potentially unlimited lifespan.  In contrast, private equity funds acquire and hold the stock of particular companies over a relatively long period of time, often taking over or working with the management of these companies.  Private equity funds usually have a limited lifespan, often 10 to 12 years. 
Source:  Form 706, Schedules F, G, B, E, H  (2011 revision)

Publicly traded stock
This asset category includes publicly traded shares issued by domestic corporations and foreign businesses (including American Depository Receipts), and mutual funds that are solely or primarily composed of these shares.
Source: 
Form 706, Schedules B, E, F, G, H  (2011 revision)

Qualified terminable interest property
The sum of assets included in a trust which meets the requirements for Qualified Terminable Interest Property (QTIP) under Section 2056(b)(7) of the Internal Revenue Code.  

Assets held in this type of trust are included in the marital deduction of the first spouse to die.  The surviving spouse receives income from the QTIP trust during life, and his/her estate must include the full value of the trust in gross estate for tax purposes upon death.  Assets that are included in this summary value are also included in the appropriate asset categories.
Source:  Form 706, Schedule M  (2011 revision)

Real estate partnerships
This asset category includes general partnerships whose main function is the ownership of real estate assets.  Limited partnerships focused on real estate ownership are included in the "Limited partnerships" (study years prior to 2007) or "Other limited partnerships" (study years 2007 and later) asset categories. 
Source: 
Form 706, Schedules F, G, A, E, H  (2011 revision)

Retirement assets
This asset category includes annuities, assets held in defined contribution plans, such as Individual Retirement Accounts (IRAs) and 401(k)s, and the taxable portion of survivor benefits from defined benefit plans such as traditional employer pensions. 
Source: 
Form 706, Schedules I, F, G, B, H  (2011 revision)

State death tax credit
For Federal estate tax returns filed for decedents who died prior to 2005, a credit was allowed for estate, inheritence, legacy, or succession taxes actually paid to any state or the District of Columbia as a result of the decedent's death. 

This credit offset Federal estate tax liability on a dollar-for-dollar basis.  For returns filed for decedents who died in 2005 and later years, this credit was replaced by a State death tax deduction (see below). 

State death tax deduction
For Federal estate tax returns filed for decedents who died in 2005 and later years, a deduction was allowed for estate, inheritence, legacy, or succession taxes actually paid to any state or the District of Columbia as a result of the decedent's death.  

This deduction replaced the State death tax credit (see above), which was available for returns filed for decedents who died prior to 2005. This credit offset Federal estate tax liability on a dollar-for-dollar basis. 
Source:  Form 706, Part 2, Line 3b  (2011 revision)

State and local bonds
This asset category includes debt securities issued by state and local municipalities, such as general obligations bonds, revenue bonds, and municipal notes.  Interest income from these bonds are often exempt from Federal and state income taxes. 
Source: 
Form 706, Schedules B, E, F, G, H  (2011 revision)

Tax on prior transfers
A tax credit is allowed for Federal estate tax paid on property received by the decedent or the estate from a transferor who died within 10 years before, or 2 years after, the decedent.

The credit is intended to lessen the burden of double taxation between successive estates whose owners had died within a short period of time. Depending on the time that has elapsed between the deaths, a credit is allowed for all or part of the Federal estate tax paid by the transferor's estate with respect to the transfer.
Source:  Form 706 Part 2, Line 14  (2011 revision)

Taxable estate
Taxable estate is equal to the value of the total gross estate less deductions for the following:  funeral expenses, executor's commissions, attorneys' fees, other expenses and losses, debts and mortgages, bequests to the surviving spouse, bequests to charities, and state death taxes.

Taxable estate is the base to which the graduated Federal estate tax rates are applied in computing the estate tax before credits. Please note that the definition of taxable estate differs for Estate tax returns filed for individuals who died prior to 2005 due to the replacement of the state death tax credit with the state death tax deduction.  For returns filed for pre-2005 decedents, taxable estate was not reduced by the state death tax deduction.  Instead, a state death tax credit was taken against total tax before credits prior to computing the net estate tax.  This credit reduced estate tax liability on a dollar-for-dollar basis. 
Source:  Form 706 Part 2, Line 3c  (2011 revision)

Tentative estate tax
The tentative estate tax liability is computed by applying the graduated estate tax rates to the adjusted taxable estate.

This tentative tax is then adjusted for gift taxes paid, the allowable unified credit, and other credits to compute the net estate tax. 
Source:  Form 706 Part 2, Line 6  (2011 revision)

Total joint property
Total joint property equals the sum of all assets owned jointly by the decedent and other people.  Assets that are included in this summary value are also included in the appropriate asset categories.    
Source:  Form 706, Schedule E (2011 revision)

Total lifetime transfers
Total lifetime transfers equals the sum of all assets that were given by the decedent to others during life and were includible in his/her gross estate under sections 2035(a), 2036, 2037, or 2038 of the Internal Revenue Code. 

Generally, gifts that are includible in gross estate are those that were made by the decedent within 3 years before the death.  Assets that are included in this summary value are also included in the appropriate asset categories.  
Source:  Form 706, Schedule G (2011 revision)

Total mutual funds
Total mutual funds represents the total value of assets held in mutual funds, including money market mutual funds.  Assets that are included in this summary value are also included in the appropriate asset categories.  This summary value excludes the value of mutual funds held in retirement accounts such as 401(k)s. 
Source:  Form 706, Schedules B, C, E, F, G, H  (2011 revision)

Total tax before credits
Total tax before credits is equal to the tentative estate tax minus the total gift taxes paid (see above). 

This tax amount is reduced by the allowable unified credit and other tax credits to compute the net estate tax.  
Source:  Form 706, Part 2, Line 8  (2011 revision)

Unclassifiable mutual funds
This asset category includes mutual funds that are broadly composed of a variety of assets, including stocks, bonds, and cash assets.  Also includes mutual funds whose asset composition could not be determined.
Source:  Form 706 Part 2, Line 8  (2011 revision)

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Page Last Reviewed or Updated: 01-May-2013