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Estate tax

A tax on the transfer of property after a person's death, paid by the estate itself before assets are distributed to heirs.

Fair market value

The price an asset would sell for on the open market when both buyer and seller have reasonable knowledge of the asset and are not under pressure to buy or sell.

Internal Revenue Code of 1986

The official body of federal tax laws in the United States, administered by the Internal Revenue Service (IRS).

Qualified real property

Real estate, such as farmland or land used in a closely held business, that meets specific conditions to qualify for special tax treatment, often related to estate valuation.

Current use valuation

A special method for valuing certain inherited property, like farms, for estate tax purposes based on its actual use (e.g., farming) rather than its highest potential market value (e.g., development), which can reduce the taxable value of the estate.