Question

Every tax system has two major components: the item that is being taxed (otherwise known as the tax base) and the rate at which it is taxed. With the income tax, the base is income. Contrary to what congress people might have you believe, however, the base of the death tax is not death. Rather, it is the size of the decedent's estate or the gross estate.

• How is this determined and, in particular, what is the starting point for this determination?

Please explain in detail

Answer 1

Death tax is nothig but are taxes imposed by state government upon the estate of someone dead. This tax is also lnown as death duties, eastate tax. This tax is levied on the person whoes name is mentioned in the will as descendant of the inherited property or the eastate which pays the tax before tranferring the inherited property.

With this tax the eastate pays the tax before the tranfer of the property to the beneficiary. It is calculated on state level.

Steps to determine death tax :-

1) Calculate gross value of estate.

2) Debt , administrative fees, and assets that will be left for the surviving spouse will be deducted from market value of those assests.

3) Afterwards any gitfs are there it will be added.

Only citizen of certain states will need to pay these taxes on state level. Hence, the base of death tax is not death but the property of the person dead.