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Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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WHAT IS THE DIFFERENCE BETWEEN GIFT TAXES, INHERITANCE ...

Resolved Question:

WHAT IS THE DIFFERENCE BETWEEN GIFT TAXES, INHERITANCE TAXES, AND ESTATE TAXES?
Submitted: 9 years ago.
Category: Tax
Expert:  Bill replied 9 years ago.

Federal gift taxes apply when gifts in excess of $12,000 are made to any one individual in a year. However, usually they don't have to be paid as there is a credit available to offset excess gifts of up to $1,000,000 over a person's lifetime. Inheritance taxes are imposed by some states and apply to the assets that a beneficiary inherits from a deceased. The tax rate is usually based on the class of beneficiary (lineal descendent such as a child, grandchild, sibling, friend, etc.) Federal estate taxes generally only apply to gross estates that exceed certain levels. The level this year is $2,000,000 and in 2009 it is $3,500,000. Some states also impose estate taxes on the value of a deceased's estate.

http://www.bankrate.com/brm/itax/Edit/basics/Final_filing/basic_3a.asp

 

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