| Inheritance tax is imposed on individuals who receive | | | | must be gathered and appraised to determine its |
| property from someone who has died. The amount of | | | | value. A detailed list of outstanding debts owed by the |
| tax is determined by the appraised value of the | | | | deceased must be documented. This information is |
| property and the recipient's relationship to the | | | | then used to determine the gross value of the estate. |
| deceased. | | | | Outstanding debts and taxes must be paid from the |
| In actuality, inheritance tax isn't charged on the | | | | estate before distribution is made to beneficiaries. |
| decedent's assets, but rather for the right to assume | | | | Funeral expenses and estate administration fees are |
| ownership of the property. Inheritance tax is not | | | | allowable deductions. After expenses are paid, tax is |
| imposed on property which is passed to the surviving | | | | imposed on the net value of the estate. |
| spouse. However, it is imposed when property is | | | | As a general rule, inheritance tax returns are filed with |
| passed to children, other family members, or friends. | | | | the county Probate court where the deceased person |
| Tax rates and allowable deductions are based on the | | | | resided. The return must be filed within nine months |
| lineage. For instance, children are taxed at a lesser rate | | | | after the date of death. Inheritance taxes must be paid |
| than a distant cousin. | | | | in full at the time the return is filed. If the estate |
| Inheritance taxes are regulated by each individual state. | | | | executor is unable to pay the tax in full, an extension |
| Currently, 10 of the 50 states within the U.S. impose | | | | request can be filed. However, the balance due will be |
| inheritance tax. These include: Indiana, Iowa, Kansas, | | | | subject to interest fees and late penalties. |
| Kentucky, Maryland, Nebraska, New Jersey, Oregon, | | | | Inheritance laws are complex and confusing; particularly |
| Pennsylvania and Tennessee. | | | | with larger estates. Many factors are involved so it's |
| For those who reside in a state that charges | | | | best to consult with an attorney experienced in |
| inheritance tax, the Estate Executor is required to file | | | | Inheritance Law. |
| an inheritance tax return. All of the estate property | | | | |