Estate of a Deceased Person

Definition

A decedent's estate is the property a person leaves at death, administered under state probate law by an executor or administrator who pays debts and distributes what remains to heirs. Federally, the estate is a separate income taxpayer on income earned during administration,^[1] and it may owe estate tax on the transfer of the taxable estate;^[2] for people dying after 2025 the basic exclusion amount is $15,000,000, adjusted for inflation for deaths after 2026.^[3]

Federal law

Formed under state law. No Act of Congress creates it; the federal laws below apply to it as described.

1. Internal Revenue Code of 1954, Pub. L. 83-591, ch. 736, § 641, 68A Stat. 215. Applies the income tax to the taxable income of estates (26 U.S.C. § 641). Official text: govinfo.gov, U.S. Government Publishing Office.
2. Internal Revenue Code of 1954, Pub. L. 83-591, ch. 736, § 2001, 68A Stat. 373. Imposes the estate tax on the transfer of the taxable estate of every decedent who is a citizen or resident (26 U.S.C. § 2001). Official text: govinfo.gov, U.S. Government Publishing Office.
3. One Big Beautiful Bill Act (popular name), Pub. L. 119-21, § 70106, 139 Stat. 162. Raised the basic exclusion amount in 26 U.S.C. § 2010(c)(3) from $5,000,000 to $15,000,000 and moved the inflation-adjustment base to 2025 (adjustments for years after 2026), for estates of decedents dying after December 31, 2025. Official text: govinfo.gov, U.S. Government Publishing Office.