Estate Tax is a tax levied on an heir's inherited portion of an estate if the value of the estate exceeds an exclusion limit set by law. The Estate Tax is mostly imposed on assets left to heirs, but it does not apply to the transfer of assets to a surviving spouse. The right of spouses to leave any amount to one another is known as the "Unlimited Marital Deduction".
When someone in your family dies and the property of the deceased transfers to you, the federal government imposes an estate tax on the value of all that property. You only pay estate tax when the tax on the net taxable estate exceeds your remaining balance of the unified credit.
Use Form 706
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