inheritance tax
n.
A tax imposed on the privilege of receiving property by inheritance or legal succession and assessed on the value of the property received. Also called death tax.
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A tax imposed on the privilege of receiving property by inheritance or legal succession and assessed on the value of the property received. Also called death tax.
In some states in the U.S. (and in the United Kingdom), a tax imposed on those who inherit assets from a deceased person. The tax rate for inheritance taxes depends on the value of the property received by the heir or beneficiary and his/her relationship to the decedent.
Inheritance tax is known in some countries as a "death duty" and is occasionally called "the last twist of the taxman's knife".
Investopedia Says:
Inheritance tax is not the same as estate tax, which is imposed on the total value of a person's estate when that person dies. Rather, inheritance tax is imposed on the property that is passed to an heir.
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State tax based on the value of property passing to each particular heir. It differs from the federal estate tax in that the degree of kinship of the heir to the decedent generally determines the exempt amounts and tax rates. An Estate Tax is based on the value of all property left by the decedent, whereas an inheritance tax is based on the amount that an heir receives. See also Unified Estate and Gift Tax.
A tax, based on property Value imposed in some states on those who acquire property from a decedent. Compare Estate Tax.
Example: An estate tax is based on the value of all property left by the decedent, whereas an inheritance tax is based on the amount that an Heir receives.
For more information on inheritance tax, visit Britannica.com.
In the United States, the federal government levied inheritance taxes during the Civil War period and again during the Spanish-American War; since 1916, however, a progressive estate tax has been imposed. The U.S. tax law of 1981 greatly reduced estate and gift taxes by raising exemptions (from $175,000 to $600,000) and lowering rates, and a 2001 law calls phase out the federal estate tax by 2012; estate taxes in 40 states that are based on the federal tax credit for state estate taxes would be phased out in 2006.
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Inheritance tax, estate tax and death duty are the names given to various taxes which arise on the death of an individual. In international tax law, there is a distinction between an estate tax and an inheritance tax: the former taxes the personal representatives of the deceased, while the latter taxes the beneficiaries of the estate. However this distinction is not always respected. For example, the death tax in the UK is called "inheritance tax" but it is a tax on personal representatives, and is therefore, strictly speaking, an estate tax.
This page is a modified disambiguation page, which distinguishes not just between pages which would otherwise have the same name, but also between similar legal concepts which have different names in different jurisdictions.
This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)
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