What Is Inheritance Tax?
Inheritance tax is a tax paid by a person who receives money or property from someone who has died. Rates and exemptions often depend on the heir’s relationship to the deceased, with spouses and close relatives commonly exempt or taxed at lower rates. The US has no federal inheritance tax, but a few states and many countries levy one.
Inheritance Tax vs. Estate Tax
Estate tax is paid by the estate before distribution; inheritance tax is paid by the recipients.
Varies by Place
Because rules differ widely by country and state, local law determines whether any inheritance tax applies.
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🔗 Related Terms
More Taxes Terms
- Additional Medicare Tax
- Adjusted Gross Income (AGI)
- Alternative Minimum Tax (AMT)
- Capital Gains Tax
- Capital Loss
- Child Tax Credit
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.