Definition: The amount that's excluded from calculating the amount of estate taxes owed at either the state or federal level. Currently the federal exemption is $3,500,000, which means that if your estate is valued at $3,500,000 or less and your death occurs in 2009, then your estate will not owe any federal estate tax. The federal estate tax is currently scheduled to go away in 2010 and then come back in 2011 with only a $1,000,000 exemption, but where the tax and exemption will really go beyond this year will depend on what President Obama and Congress decide to do.
Also Known As: Estate Tax Exemption
