inheritance tax

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inheritance tax,

assessment made on the portion of an estate received by an individual; it differs from an estate tax, which is a tax levied on an entire estate before it is distributed to individuals. The inheritance tax is usually progressive and is determined by the amount of property received by the beneficiary, as well as by his or her relationship to the deceased. Strictly speaking, it is a tax on the right to receive the property; the estate tax can be characterized as a tax on the right to transmit the property. All states impose either an estate tax or an inheritance tax, some states employing both. A related federal levy is the gift tax, designed to prevent people from avoiding inheritance and estate taxes by giving away property before death.

In the United States, the federal government levied inheritance taxes during the Civil War period and again during the Spanish-American War; since 1916, however, a progressive estate tax has been imposed. The U.S. tax law of 1981 greatly reduced estate and gift taxes by raising exemptions (from $175,000 to $600,000) and lowering rates, and a 2001 law called for phasing out the federal estate tax by 2012, but that was reversed and the tax remained in place on estates worth more than $5.49 million (twice that for couples). Changes in 2017 doubled those thresholds for 2018–25.

inheritance tax

1. (in Britain) a tax introduced in 1986 to replace capital transfer tax, consisting of a percentage levied on that part of an inheritance exceeding a specified allowance, and scaled charges on gifts made within seven years of death
2. (in the US) a state tax imposed on an inheritance according to its size and the relationship of the beneficiary to the deceased
References in periodicals archive ?
According to the protocol, 25% of real estate taxation is designated for developing slums; whereas the other 25 % would be for developing various governorates.
Estate taxation has figured in economic research in three different ways.
Rabkin and Johnson, Federal Income, Gift and Estate Taxation (New York, NY: Matthew Bender and Co.).
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Several massive tomes that achieve varying degrees of success in their breadth of their coverage and quantity of detail now dominate the field of real estate taxation. Some works create such classroom problems for tax educators, as many fine students (1) have forest-for-the-trees problems, impairing their ability to absorb the contents of such works and (2) get so overwhelmed and frustrated that they merely listen to classroom lectures (if even that).
In the article Tax Planning Strategies Using Charitable Trusts, the last sentence in the first column on page 9 should read, "Not only do the proceeds replace assets transferred, those proceeds are not taxed to the beneficiary so income taxes are successfully avoided." The authors regret the error and emphasize that they had no intention of getting into estate taxation issues related to CRTs in this article.
Some may want advisors with specific areas of expertise, such as income and estate taxation or disability and adverse situations.
As an introduction to the use of trusts in combination with flow-through entities, this chapter will be especially useful to those students taking a flow-through course prior to their estate taxation course.
Use of the term 'political subdivision' demonstrates that the drafters were clearly cognizant of the double taxation issues that might arise as a result of estate taxation imposed during state probate proceedings.
"The fundamental justification for estate taxation is [the belief] that great private wealth is socially undesirable," writes Bruce Bartlett, a senior fellow at the National Center for Policy Analysis, in the Public Interest (Fall 2000).
According to Ari Fleischer (a former spokesman for Archer, who now works for the Bush presidential campaign) the chairman is "philosophically opposed" to estate taxation as a form of "double taxation." At the June pep rally against the "death tax," Archer declared: "This tax is wrong.
Although the minimum distribution rules are intended to preclude the unreasonable deferral of benefits, they are not truly needed inasmuch as benefits deferred are subject to income taxation upon eventual distribution and may be subject to estate taxation on a participant's death.