Estate tax and inheritance tax: what’s the difference?

Estate tax and inheritance tax: what’s the difference?

Benjamin Franklin said: Nothing is certain in this world but death and taxes. But even death cannot alleviate taxes.

Yes, death can be a tax-triggering event. There are two types you should be aware of: estate tax and inheritance tax.

Many people think they are the same, but they are not.

The estate tax is imposed on things that the deceased owned or had certain interests in upon his death. Inheritance tax is paid by the heir.

The federal government only has an estate tax, but states can have one, both, or neither, which can make death taxes more confusing.

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