The Estate Tax is a tax on the transfer of property after a taxpayer’s death. It begins with an accounting of everything owned by the taxpayer based on the fair market value of the items, not necessarily what was paid at the time of purchase. The total of all of these items is referred to as the "Gross Estate." After the Gross Estate is calculated certain allowable deductions are taken out to determine the net total. Currently there are credits to the net total so that only taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. According to the IRS, the Estate Tax currently only affects the wealthiest 2% of all Americans.