Many people have heard or knew of different types of taxes like, property levy, wealth tax, income tax, sales tax etc, but a very few know about the inheritance tax, which is a kind of levy collected from a person who gets an inheritance. Inheritance tax is also known as Estate tax or Death tax. There is no way to escape from this tax, if you have inherited a property. The inherited property makes a person able to generate income, and levy is mandatory on every source of income and it must be collected.
Inheritance tax is also commonly known as estate levy, but the fact is that these two taxes are different from each other on the contrary of what is believed. Nonetheless, these two terms also share among each other many similar faces and sides. You may also find resemblances as well as differences in the procedure of paying these two taxes. For starters here are some of the basic things in inheritance taxes, you do not need to pay the inheritance tax if you are the spouse of the deceased because in this case you will be considered a widow receiving money from her/his deceased spouse’s estate. moreover, in cases of life insurance there would be no need to pay the inheritance taxes and will not be collected and there is a specific amount of money that you would not need to pay inheritance taxes for as long as this amount does not exceed 2 million dollars and in 2009 the amount increased to 3 million dollars.
There is also a gift tax, as long as the amount you are giving does not exceed $12,000 you will be on the safe side, but that means that if you are trying to get clever and get the money from someone before he dies, and this amount is larger than $12,000, you will have to pay gift taxes, so either ways you cannot avoid the taxes of inheritance because you will be faced with the gift taxes. Another thing to add is that the cost of the property is the factor on which inheritance levy significantly depends. however, there are lots of other factors that determine the inheritance levy, and among them the most crucial factor is appraised value of inheritance. This is the first considerable factor before you determine anything. Debts of the deceased person are not incorporated in it. This law is enforced after the full modification of all the outstanding loans from these possessions.
Many people cannot see the difference in the inheritance levy and confuse it with the estate tax. In other words, the difference between inheritance tax and estate tax is that inheritance tax involves the estate beneficiaries, while the estate levy speaks concerns land or possessions of the dead person. Both taxes are levied by different institutions. estate tax is levied by Federal Government, while inheritance tax is levied by the State. There are diversities on the imposition of this tax in different states. Such as in some of the states in the United States, as they at this time levy taxes on inherited estate money as well as properties. On the contrary, there are also states that instead of the latter, they entail inheritance tax. Due to the reason that there are varieties on the imposition of the taxes, it is also the responsibility and duty of every citizen to get to know the current inheritance tax law being imposed on his state and the procedures that it is being imposed accordingly. It is a must that everyone knows or at least get an idea of the law of the land and how it works. Lack of knowledge and ignorance of the law will not excuse anybody from it. neither will it do anyone any good.
When dealing with such a complex inheritance tax law, you should seek a professional help from a lawyer to sort things out and know what is it that you owe and what is that you own. moreover, it is advisable to think about the matter and act quickly in this case so that you would be able to collect all the documents you need or the information that would be required by the lawyer without delay.