What is an inheritance tax?

Inheritance tax is a tax imposed by the state of Texas on the transfer of property from a deceased person to his or her heirs. It is also known as a “death” or “succession” tax. In most cases, inheritance tax applies only when the value of the estate is greater than a certain amount set by Texas law. Inheritance tax is different from the federal estate tax, which is based on the total value of a deceased person’s estate, regardless of who inherits it. Inheritance tax is based on the specific property and assets that each individual was given by a deceased person. In Texas, inheritance tax is imposed on the inheritance of real estate, tangible personal property, and intangible items such as stocks and bonds. Cash inheritances are not subject to the tax, nor are any charitable bequests. The amount of the inheritance tax is determined by the value of the property or assets received, and the relationship of the heir to the deceased person. Inheritance tax is generally paid by the estate, but heirs are still required to file a report of the transfer of property within nine months of the decedent’s death. The report is used to determine the amount of inheritance tax owed by the estate. While the report must be filed, the inheritance tax has been eliminated in the state of Texas, so no payment is required.

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