Computation of the Taxable Estate
The taxable estate is the gross estate less deductible:
• Funeral expenses.
• Estate administration expenses.
• Claims against the estate.
• Taxes accrued but unpaid at the date of death.
• Loss from fire, storm, and theft (casualty losses) not compensated for by the insurance or claimed as a deduction in an income tax return.
• An unlimited marital deduction is allowed for qualifying property that passes to a surviving spouse. The executor may even elect to have certain life interests qualify for the marital deduction. A special rule applies for charitable remainder trusts. See discussion below on marital deduction.
• The amount of transfers to charitable, religious, and similar institutions approved by IRS.
After the taxable estate is determined, the includible taxable gifts are added to the taxable estate before referring to the tax tables to determine the amount of the estate tax.