Estate Tax Law

Estate tax laws can be a bit confusing because there are two types of tax that needs to be paid when the owner of an estate becomes deceased. The reason it is sometimes confusing is because there is really a double taxation happening when someone dies and the properties of the estate are transferred to others. The first tax has little regard for the family or beneficiary of the estate. This is generally referred to as the estate tax law. This type of tax requires that a tax be paid on the entire value of the estate including money left in the accounts of the decedent. This tax must be calculated before any property is distributed among the beneficiaries and it is to be paid directly to the IRS.

The second type of estate tax law is known as inheritance tax. This is the amount of tax paid by the beneficiaries for the portion of the estate they are to receive. This tax can be a little bit tricky if you are the sole beneficiary. For instance, If you decide that your sister or brother is also entitled to a share and you give it to them. In this case, if you were stipulated as the sole beneficiary, you could still be responsible for the inheritance tax for the amount you gave away.