Definition: The amount that is excluded from calculating the amount of estate taxes owed at the federal level. With regard to state estate taxes, most states exclude the exemption amount from calculating the estate tax bill but several do not. Check with your state taxing authority to be sure.
In 2010, 2011 and 2012 the federal estate tax exemption is $5,000,000, which means that if an estate is valued at $5,000,000 or less and death occurs in one of these years, then the estate will not owe any federal estate taxes. But note that the federal estate tax exemption is scheduled to decrease to $1,000,000 on January 1, 2013:
Also Known As: Estate Tax Exemption
