Federal Taxes

Depending on where you live the tax code may make reference to inheritance tax, estate tax, and even "death duty."  For Example,  in the United States, there is a difference between estate taxes and inheritance taxes.  Estate taxes are levied on representatives of the deceased person, while inheritance taxes are levied on the beneficiaries of an estate.  Elsewhere in the world, the terms estate tax and inheritance tax are used interchangeably.

Some individuals mistakenly believe that there is a separate inheritance tax rate in the US.  IRS tax law, or tax code, does not provide for a special inheritance tax rate, instead there are exemptions and credits that apply to property that is inherited or gifts that are received.

Under the current law, the IRS has a prescribed method for determining if any inheritance tax is due on property or monies received.  We are going to briefly describe this method in the section below.  Keep in mind that the settling of an estate is a complex matter.  An attorney or tax accountant should be consulted in situations where matters of the law are concerned such as the contesting of a Will, known as the probate process.

Possessions have been passed down from generation to generation throughout history and they provide us with both sentimental and monetary value.  Thankfully, we don't have to deal with inheritance issues all the time, but we want to provide that information for those that need it.

Federal Inheritance Tax is one of those things you really don't feel like dealing with, but in some ways it is part of the cycle of life.