Question

Acct 3404 What is difference between an inheritance tax and estate tax

Answer 1

An estate tax is a type tax which is imposed at the time of death or termed as death tax and calculated on the basis of the value of property owned the person who died on the date of death.In other words, estate tax depends on the value of the property and once that value exceeds the exemption limit, then estate tax is applied. The exemption limit varies from state to state with most of the state with exemption limit of $1,000,000.

An inheritance tax is a type of death tax which is calculated based on who inherits the property of the person who died. Hence inheritance tax applied when the property of the deceased person passes to someone who is subjected to inheritance tax. Generally, property inherited by spouses, children, and grandchildren are not subject to inheritance tax.