Categories: Estate Tax Planning
State Inheritance Taxes refer to taxes imposed by individual states on the value of property inherited by beneficiaries from a deceased person’s estate.
These taxes are typically calculated based on the value of the inheritance received and may vary significantly from one state to another in terms of rates and exemptions. Unlike federal estate taxes, which are assessed on the total value of the deceased’s estate, state inheritance taxes are charged to the heirs.
For example, if a beneficiary inherits property valued at $100,000 in a state with a 5% inheritance tax rate, they would owe $5,000 in taxes on that inheritance. Some states have exemptions or lower rates for certain relationships, such as spouses or children.
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