FACT CHECK: Does The Death Tax Only Apply To Estates Worth More Than $11 Million?

David Sivak | Fact Check Editor

Democratic Senator Ron Wyden of Oregon claimed on Twitter that the estate tax applies only to estates worth more than $11 million while fact-checking President Donald Trump’s tax reform speech Wednesday.

Verdict: False

The estate tax applies to gross estates worth more than $5.5 million.

Fact Check:

The estate tax, known colloquially as the death tax, imposes a tax on the value of real estate, stocks, bonds and other assets that the wealthy pass on to heirs when they die. The federal government shields $5.5 million of an estate’s value from taxation in the form of a tax credit, but the remaining amount is subject to a 40 percent tax rate.

Wyden claimed the tax only applies to estates worth more than $11 million because the tax credit is “portable” for married couples; when the first spouse dies, the widow can inherit the estate and the deceased spouse’s credit, effectively doubling the tax shield to $11 million. But unmarried couples and single estate owners don’t benefit from this portability, a point Wyden fails to mention.

Even a married couple that owns an estate worth less than $11 million could still be subject to the estate tax. If the couple hands down some of their assets over the years, they can also apply the tax credit towards what’s known as the gift tax.

This decision would shield them in the short term, but raise their estate tax liability once they pass away. For example, if a married couple uses the entire $11 million tax credit to shield themselves from the gift tax, their full estate could be taxed when they pass away, even if it’s only worth $10 million.

Wyden does not consider this scenario or the possibility that an estate owner is unmarried. We rate his claim as false.

Follow David on Twitter

Have a fact check suggestion? Send ideas to [email protected]

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].

David Sivak

Fact Check Editor
Follow David on Twitter Have a fact check suggestion? Send ideas to [email protected].

Trending

FACT CHECK: Did Plato Say, 'You Can Discover More About A Person In An Hour Of Play Than In A Year Of Conversation'?
FACT CHECK: Did Elon Musk Call Twitter Users Upset By Trump's Reinstatement 'A Bunch Of Babies'?
FACT CHECK: Did The Russian Black Sea Fleet Lose 16 'More' Battleships?
FACT CHECK: No, This Image Does Not Show A Real Calf With Three Heads