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This page contains information about data sources and limitations for SOI's Estate tax study.
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Analysts in the Special Projects Section of SOI’s Special Studies Branch, with SOI staff in the Cincinnati Submission Processing Center, conduct the Estate Tax Study, which extracts demographic, financial, and bequest data from Form 706, the Federal estate tax return. The Estate Tax Study is conducted on an annual basis, which allows annual production of filing year data on estate taxation. By focusing on a single year of death for a period of 3 years, the study also allows production of periodic year-of-death estimates.
Year-of-death estimates are advantageous in that the included estates would have been subject to the same tax law and similar economic conditions. A single year of death is sampled for 3 calendar years, and 99 percent of all returns for decedents who die in a given year are filed by the end of the second calendar year following the year of death. The Estate Tax Study for the period 2007-2009 concentrates on Year of Death 2007, the most recent year-of-death estimates available.
For each study year, 2007-2009, a sample was selected from returns filed. The sample for Filing Year 2007 included 9,674 returns out of a total population of 38,000. In 2008, the year in which most returns for 2007 decedents were filed, 11,710 returns were sampled out of a total of 38,354. There were 9,105 returns out of 33,515 sampled during Filing Year 2009. Of the 30,489 returns sampled during 2007-2009, there were 12,426 returns filed for 2007 decedents.
Estate tax returns were sampled while the returns were being processed for administrative purposes, but before any audit examination. Returns were selected on a flow basis, using a stratified random probability sampling method, whereby the sample rates were preset based on the desired sample size and an estimate of the population. The design had three stratification variables: year of death, age at death, and size of total gross estate plus adjusted taxable gifts. For the 2007-2009 filing years, the year-of-death variable was separated into two categories: 2007 year of death and non-2007 year of death. Age was disaggregated into four categories: under 40, 40 under 50, 50 under 65, and 65 and older (including age unknown). Total gross estate plus adjusted taxable gifts was limited to six categories: under $1.5 million, $1.5 million under $2.0 million, $2.0 million under $3.0 million, $3.0 million under $5.0 million, $5.0 million under $10.0 million, and $10.0 million or more. Sampling rates ranged from 1 percent to 100 percent. Returns for more than half of the strata were selected at the 100-percent rate.
Because almost 99 percent of all returns for decedents who die in a given year are filed by the end of the second calendar year following the year of death and because the decedent’s age at death and the length of time between the decedent’s date of death and the filing of an estate tax return are related, it was possible to predict the percentage of unfiled returns within age strata. The sample weights were adjusted accordingly, in order to account for returns for 2007 decedents not filed by the end of Filing Year 2009.