Inheritance tax is paid on property passed on from a deceased person to those who are to inherit it. The term may be applied to two different taxes: (1) a tax on the total property before it is divided, and (2) a tax on each of the distributed portions after they have been given to the heirs. Technically, these two taxes should be called estate taxes and inheritance taxes, respectively. The United States government levies only an estate tax. Some state governments levy both inheritance and estate taxes.

No tax is due on most estates under $600,000. But under federal law, that limit would rise gradually until 2008, when no tax would be due on estates of less than $1 million.

An unlimited amount of an estate can be transferred to a spouse at death without being taxed.

In Canada, only the province of Quebec levies an inheritance tax. Canada has no estate taxes.

See also…

Tax Law – Forum