1-2c Taxes At Death

Question 0

Inheritance tax

Answer 0

Taxes the recipient of the property

Question 1

Estate tax

Answer 1

• Tax imposed on the transferor at death
• the federal estate tax is developed to prevent large amounts of money to be kept within a family for many generations
• most of the property is valued at fair market value
• deductions include: funeral expenses, debts on the descendent, transfers to charitable organizations, and marital deduction on surviving spouse
  ~> marital deduction $10 million
• first $5million that goes to descendent is excluded
  ~> 40% tax on anything over

Question 2

State taxes at death

Answer 2

Sometimes states levy taxes on inheritance and state taxes, but the tax rate is lower according to the inheritors relationship to the deceased