Reported 4 months ago
An inheritance tax, often confused with estate tax, is levied on assets inherited upon someone's passing. Estate taxes are based on the estate's value and could be subject to federal and state exemptions. Inheritance taxes, collected only by certain states, focus on the relationship between the heir and the deceased. Only six states impose inheritance taxes, with rates varying based on the beneficiary's relationship to the deceased. Spouses are usually exempt, while other relatives may be taxed based on location and relationship. Strategies to avoid inheritance tax include setting up trusts or receiving the inheritance as gifts to minimize tax obligations.
Source: YAHOO