From gross estate to taxable estate
The gross estate is everything you own at death: cash, investments, real estate, retirement accounts and life insurance you control. From it the estate subtracts debts, funeral and administration expenses, bequests to a U.S. citizen spouse, and bequests to qualified charities; what remains, rounded to the cent, is the taxable estate.
The three deductions are added and then capped at the gross estate before the subtraction, so a combined deduction larger than the estate leaves a taxable estate of $0 rather than a negative one. The table still prints each deduction at the amount you entered, which means subtracting its rows by hand can run below zero even though the taxable estate row cannot.
Only the part of the taxable estate above the exclusion faces federal estate tax. A $20,000,000 estate with $250,000 of debts produces a $19,750,000 taxable estate, $4,750,000 over the exclusion, and $1,900,000 of tax at 40%.
The $15,000,000 exclusion, then 40%
For 2026 the basic exclusion amount is $15,000,000 under section 2010(c)(3), raised to that figure by section 70106 of the One Big Beautiful Bill Act. The basic credit, which the Instructions for Form 706 table lists as $5,945,800, exactly offsets the tax on that first $15,000,000, so the tax is a flat 40% of everything above the exclusion rather than a climb through brackets.
That is why the page needs only one subtraction after the deductions: taxable estate minus the $15,000,000 exclusion, and 40% of what is left. The exclusion and the credit are two views of the same provision, and because they line up exactly there is no band where the credit runs out before the exclusion does.
Gifts made during life use up the same exclusion. The page does not ask for them, so a taxable estate computed here can understate the tax if lifetime taxable gifts have already consumed part of the $15,000,000; the note reminds the reader of that whenever tax is due.
Portability: using a deceased spouse’s unused exclusion
If a prior spouse’s estate elected portability on a timely Form 706, the unused part of their exclusion can be added to yours. This calculator takes that figure as an input, adds it to the $15,000,000, and prints the combined exclusion with a label that says the ported amount is included.
The ported amount only adds. A negative entry is clamped to zero, and the amount is capped at the page money ceiling like every other input, so a mistyped figure cannot reduce the exclusion below the statutory basic amount.
Unused exclusion is not automatic: it has to be elected on the earlier return, and it is only available to a surviving spouse. A household that skipped that election sits at $15,000,000, and the calculator cannot recover what was never ported - which is why the field asks what the Form 706 elected rather than what the couple could have used.
When the return is due
The executor files Form 706 within 9 months of death when the gross estate plus adjusted taxable gifts and the specific gift tax exemption exceed the filing threshold, and an extension is available with Form 4768. The 2026 threshold in the estate-tax topic page table is $15,000,000, matching the exclusion this calculator applies, and the same figure is the GST exemption for 2026.
Filing is not the same as owing. An estate can cross the threshold and still owe nothing, because the exclusion shelters everything up to $15,000,000; conversely the threshold test uses adjusted taxable gifts that this page never asks for, so a return can be due on facts the calculator cannot see.
State estate and inheritance taxes are separate. A number of states impose their own estate tax with lower exemptions, and a handful impose an inheritance tax on the recipients; none of that is modeled here, and a federal result of $0 does not mean the estate owes nothing anywhere.
Danfio