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An inheritance tax is a state tax that is levied on inherited money or property and is paid by the beneficiaries. ... of the inheritance and the beneficiary’s relation to the deceased ...
Inheritance taxes are paid not by the estate of the deceased, but by the inheritors of the estate. For example, the Kentucky inheritance tax "is a tax on the right to receive property from a decedent's estate; both tax and exemptions are based on the relationship of the beneficiary to the decedent." [52]
Calculating inheritance tax: The calculation of inheritance tax depends on the state’s specific laws and the beneficiary’s relationship to the deceased. For instance, in Pennsylvania, direct ...
Inheritance tax is a tax on the value of someone’s property, money, and belongings after they pass away before it is given to their heirs or beneficiaries.
Therefore, if the taxpayer's sister were to sell the house for $100,000, she would not have to pay any income tax because the sales price ($100,000) minus her stepped-up basis ($100,000) would be a capital-gain income of zero. See the explanation under "Rationale for stepped-up basis" (below) for an explanation of why the Tax Code would do this.
An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and property) of a person who has died. [1] However, this distinction is not always observed; for example, the UK's "inheritance tax" is a tax on the assets of the deceased, [ 2 ] and ...