A reliable federal estate-tax estimate starts with the decedent’s date of death, tax status, a date-of-death inventory of all includable property, lifetime taxable gifts, and allowable deductions. For a U.S. citizen or resident who dies in 2026, the basic exclusion and filing threshold is $15,000,000; a 2025 death uses $13,990,000. Those figures are screening thresholds, not a promise that no tax is due or that no return is required.
The estimate is separate from state estate or inheritance taxes and from the rules for a nonresident who is not a U.S. citizen. Use the process below to identify the likely federal filing position, then have an estate-tax professional complete the calculation when values, ownership, gifts, portability, or cross-border issues are complicated.
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What you are actually estimating
There are two related questions:
- Could Form 706 be required? The filing test looks at the federal threshold for the year of death and includes more than the assets that pass through probate.
- Could federal estate tax be payable? The tax computation starts with the gross estate, subtracts deductions that qualify under federal rules, incorporates adjusted taxable gifts and prior transfer-tax calculations, and applies the unified rate schedule and available credits.
An estate can be below the filing threshold yet still file voluntarily, most commonly to elect portability of a deceased spouse’s unused exclusion. Conversely, being near or above a threshold does not tell you the final tax bill until valuation, deductions, gifts, and credits are calculated.
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Step 1: Identify the year of death and the person’s federal status
The date of death controls the applicable exclusion. Do not carry forward an old threshold from an earlier article or an estate plan that predates a statutory change.
| Year of death | Item | Amount | Scope |
|---|---|---|---|
| 2025 | Basic exclusion and filing threshold | $13,990,000 | U.S. citizen or resident decedent |
| 2026 | Basic exclusion and filing threshold | $15,000,000 | U.S. citizen or resident decedent |
| 2026 | Annual gift exclusion per donee | $19,000 | Gifts made in 2026; this is not the lifetime exclusion |
The $15 million amount is not a universal rule. A person who was a nonresident and not a U.S. citizen may face a different federal exclusion and may need Form 706-NA for U.S.-situated property. A green card by itself does not conclusively establish domicile for purposes of the full citizen-or-resident exclusion. If citizenship, domicile, treaty status, or the location of property is uncertain, stop the simple estimate and obtain cross-border advice.
Step 2: Build a date-of-death gross-estate inventory
The gross estate is broader than probate assets. The IRS uses fair market value at death for property the decedent owned and for certain interests the decedent retained or controlled. As the IRS explains in its estate-tax overview, “The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them.”
Prepare an inventory that identifies the asset, its owner, the decedent’s interest, the value on the date of death, and the records supporting that value. Include assets that transfer automatically or through a beneficiary designation; non-probate transfer does not by itself remove property from the gross estate.
Cash, securities, and financial accounts
- Bank, brokerage, and money-market accounts, including accrued interest.
- Publicly traded stocks, bonds, mutual funds, options, and similar investments valued under the applicable date-of-death rules.
- Retirement accounts and other contracts in which the decedent had an ownership or beneficial interest.
Real estate and tangible property
- Homes, vacation property, rental buildings, land, mineral interests, and timeshares.
- Vehicles, collections, jewelry, art, equipment, and household property when their value is material.
- Mortgaged property, recorded with both its gross value and the debt so the deduction can be analyzed separately.
Insurance, annuities, and trust interests
- Life-insurance proceeds when the federal inclusion rules apply, even if proceeds are paid directly to a beneficiary.
- Annuities and other contracts that provide payments after death.
- Interests in revocable or irrevocable trusts, powers of appointment, retained income or enjoyment, and other rights that may bring property into the gross estate.
Business and jointly owned interests
- Corporations, partnerships, limited-liability-company interests, sole-proprietorship assets, and shareholder or partner loans.
- Joint accounts and jointly titled real estate. Record each owner, the form of title, contributions, and the decedent’s rights rather than assuming only a probate share counts.
- Receivables, intellectual property, deferred compensation, and claims owed to the decedent.
For closely held businesses, real estate, unusual investments, or minority interests, a defensible appraisal may be essential. Special valuation rules can apply in limited situations, but eligibility and documentation are technical; do not apply a discount or alternate method merely because it lowers the estimate.
Step 3: Gather lifetime taxable-gift records
Lifetime transfers affect both the filing test and the eventual tax computation. Request every available Form 709, gift-tax notice, appraisal, trust instrument, and transfer schedule. The estate computation generally brings in adjusted taxable gifts—taxable gifts made after the relevant statutory date—so an estate that looks smaller than the exclusion can still require a return when prior gifts are added.
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The annual exclusion is only one part of the gift rules. For gifts made in 2026, the annual exclusion is $19,000 per donee, but using an annual exclusion does not establish that every transfer is outside the lifetime calculation. Gifts split between spouses, gifts to trusts, transfers of interests in a business, and gifts exceeding the annual exclusion require their own analysis. Keep the filing records even when no gift tax was paid.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsWhen applying the filing test, follow the current Form 706 instructions for the specific gift-tax exemption amount and other additions that the IRS requires. Do not treat the annual exclusion, the lifetime exclusion, and the specific gift-tax exemption as interchangeable terms.
Step 4: Estimate deductions and adjustments
After assembling the gross estate, identify deductions that the federal rules allow. A liability is not deductible simply because it appears on a bill, and an expense may be deductible on the estate-tax return only if it meets the applicable requirements and is not claimed elsewhere.
- Debts and mortgages: Document that the obligation was enforceable and that the estate, rather than another person, bears it. For secured property, connect the debt to the asset and avoid subtracting the same amount twice.
- Administration expenses: Executor, legal, accounting, appraisal, and similar costs may qualify when they are necessary and properly documented. The election and interaction with income-tax deductions can matter.
- Marital transfers: Property passing to a qualifying surviving spouse can receive the marital deduction, subject to requirements concerning the recipient, the form of transfer, and any election needed.
- Charitable transfers: A qualifying transfer to charity may be deductible, but the recipient and the property interest must meet federal requirements.
- Special valuation provisions: Certain farms, closely held businesses, or other property may qualify for special treatment only when detailed conditions and elections are satisfied.
Make a working schedule that shows the gross value, the proposed deduction, the legal basis, and the supporting document for each item. Flag uncertain deductions instead of silently netting them against the estate.
Step 5: Run the two screening calculations
Screen for a possible Form 706 filing
For a U.S. citizen or resident, begin with this screening expression:
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Compare the result with the basic exclusion for the year of death. For a 2026 death, the comparison amount is $15,000,000; for a 2025 death, it is $13,990,000. The current Form 706 instructions control the technical filing trigger and any adjustments, so treat this expression as a first-pass screen rather than a completed legal test.
Estimate the taxable estate and transfer-tax base
Separately calculate:
gross estate − allowable deductions = estimated taxable estate
The unified transfer-tax calculation then combines the taxable estate with adjusted taxable gifts and applies the statutory rate schedule, prior gift-tax amounts, and available credits. The 2026 Form 706 instructions list a 40% top rate in that schedule. A 40% top rate is not a flat charge on the entire gross estate; the actual result depends on the full graduated computation and credits.
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Keep the filing screen and the tax estimate on separate worksheets. Mixing the two is a common reason executors conclude either that a return is unnecessary or that a tax bill is certain when neither conclusion is supported.
Worked screening examples
These examples illustrate the order of operations only; they are not tax calculations for a real estate.
Example: 2026 estate below the threshold before gifts
An executor totals date-of-death assets at $11 million and identifies $500,000 of potentially deductible debts and expenses. The preliminary taxable estate is $10.5 million. If the decedent had no adjusted taxable gifts and no unusual inclusion, the result is below the 2026 $15 million basic exclusion. The executor should still check jointly owned assets, insurance, trusts, and prior gifts before deciding that no federal return is needed.
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Example: Prior gifts move a smaller estate toward filing
A 2026 gross estate of $12 million can appear comfortably below $15 million. If the decedent made $4 million of adjusted taxable gifts, the filing screen is materially different because those gifts are added to the estate-tax computation. The executor must obtain the Forms 709 and follow the current instructions rather than relying on the asset inventory alone.
Example: A return may be useful below the threshold
A surviving spouse’s estate may be below the filing threshold, yet the executor could file Form 706 to elect portability of the deceased spouse’s unused exclusion. That election can preserve an amount for the survivor’s later estate, but it is effective only when the return is filed on time and the requirements are met.
Step 6: Decide whether and when to file Form 706
The general due date for Form 706 is nine months after death. The IRS allows a six-month extension of time to file when Form 4768 is filed by the original due date. An extension of time to file is not automatically an extension of time to pay any tax that is due.
If the calculated filing test is above the applicable threshold, the executor generally must file Form 706 even if deductions may later reduce the tax to zero. Confirm the filing trigger against the current Form 706 instructions, especially when lifetime gifts, valuation issues, or unusual property are involved.
If the estate is below the threshold, discuss a voluntary portability filing with the surviving spouse and adviser. Portability is an election, not an automatic transfer, and the filing deadline matters. The IRS FAQ describes limited relief procedures in some circumstances; check the current IRS requirements rather than assuming late relief will be available.
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Assemble appraisals, account statements, insurance records, trust documents, prior gift-tax returns, debt statements, and beneficiary information before preparing the return. Missing ownership records can delay filing and cause an incorrect gross-estate value.
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Federal screening does not answer state or international questions
State estate and inheritance taxes
States can impose an estate tax, an inheritance tax, both, or neither. Exemption amounts, filing thresholds, residency tests, deductions, and due dates differ by jurisdiction and can change independently of the federal exclusion. A federal estimate therefore cannot establish that the estate owes no state tax. Check every state where the decedent lived, owned real estate, conducted a business, or maintained a legal connection.
Nonresident noncitizens
An estate of a nonresident who was not a U.S. citizen can have a different exclusion, a different definition of U.S.-situated property, and treaty considerations. Form 706-NA may be required. The location of securities, real estate, business interests, insurance, and trust property must be analyzed under the nonresident rules; do not apply the $15 million citizen-or-resident threshold to that case.
Common estimation mistakes and how to correct them
- Counting only probate assets: Rebuild the inventory to include insurance, jointly held property, trusts, annuities, retirement interests, and retained rights.
- Using today’s value or the purchase price: Obtain date-of-death fair-market values and retain appraisals or valuation statements.
- Subtracting every bill: Classify debts and expenses under the federal deduction rules and document who is legally responsible.
- Ignoring lifetime gifts: Search for Forms 709, gift-splitting elections, trust transfers, and appraisals before concluding that the estate is below the threshold.
- Treating the annual gift exclusion as the lifetime exemption: Record the size, recipient, date, and type of each transfer and apply the correct rule.
- Assuming below-threshold means no return: Consider portability and any state filing obligation.
- Using the federal threshold for a nonresident case: Determine citizenship, residence, domicile, U.S.-situated property, and treaty treatment first.
- Waiting past the deadline: Calendar the nine-month due date immediately and file Form 4768 by that date if an extension is needed.
When to bring in an estate-tax professional
Seek an estate-tax attorney, CPA, enrolled agent, or other qualified preparer experienced with Form 706 when the estate is near the threshold, a valuation is disputed, or any of the following applies:
- Large or complicated lifetime gifts, missing gift-tax returns, or gift-splitting questions.
- Closely held businesses, family partnerships, farms, mineral interests, intellectual property, or minority interests.
- Revocable or irrevocable trusts, retained interests, powers of appointment, or uncertain insurance ownership.
- Marital or charitable planning, special valuation elections, or a portability decision.
- Property or residence in more than one state.
- Nonresident-noncitizen status, possible treaty relief, or assets outside the United States.
Ask the adviser to explain which assets are included, which deductions are accepted, how lifetime gifts were treated, whether Form 706 is required, and what evidence supports each valuation. The IRS itself advises consulting a tax practitioner when its estate-tax resources do not answer the facts of a particular case.
A practical worksheet for the executor
- Write down the exact date of death and classify the decedent as a U.S. citizen or resident, or a nonresident noncitizen.
- Select the threshold for that year from the current IRS material; use $15,000,000 for a 2026 citizen-or-resident death and $13,990,000 for a 2025 death.
- List every asset and interest, including non-probate property, and obtain fair-market values as of the date of death.
- Trace ownership, beneficiary designations, joint interests, trust powers, insurance rights, and business interests.
- Collect all prior Forms 709 and records of taxable gifts; separate annual-exclusion gifts from other transfers.
- List debts, mortgages, administration expenses, marital transfers, charitable transfers, and any possible special valuation election.
- Calculate the estimated taxable estate after documented deductions.
- Add adjusted taxable gifts and the specific gift-tax exemption amount required by the current filing instructions for the filing screen.
- Compare the result with the applicable exclusion, then separately consider portability if a surviving spouse exists.
- Calendar the Form 706 due date nine months after death and evaluate Form 4768 before that date if more time is needed.
- Review state and cross-border exposure before treating the federal estimate as the final answer.
Bottom line
To estimate federal estate-tax exposure, value the complete date-of-death gross estate, add adjusted taxable gifts, subtract only deductions that qualify, and compare the resulting filing screen with the exclusion for the year of death. For 2026 U.S. citizen or resident deaths, that basic exclusion is $15,000,000; for 2025 deaths, it is $13,990,000. The threshold does not replace the tax computation, does not decide state liability, and does not eliminate the potential value of a timely portability election. A near-threshold, gift-heavy, trust-heavy, jointly owned, nonresident, or multi-state estate should be reviewed by a qualified professional before the filing deadline.
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