![]() ![]() Unlike the estate tax, which is levied on the value of an estate and is paid by it, an inheritance tax is levied on the value of the inheritance received by the beneficiary, and it is the beneficiary who pays it.Inheritance tax is a levy on assets inherited from a deceased person.Again, this effectively means there is no federal gift tax imposed on the majority of Americans. Currently, each individual may exempt from the gift tax up to $14,000,000 of gifts. ![]() But, again, Congress has set a high threshold to be met before a gift would be subject to a gift tax. Donors of a gift must pay a tax based on the value of the gift. Many use gifts of cash or other valuables as a way to transfer wealth without incurring or running the risk of incurring a federal estate tax. One other type of federal "death tax" exists: the gift tax. Federal Gift Tax, Another Kind of Estate Tax Given the high threshold for the imposition of federal estate taxes, the majority of estates will not be subject to the federal estate tax. And married couples may each claim the exemption, effectively shielding almost $11,000,000 from federal estate tax. By 2010, Congress raised that exemption threshold to $5,000,000, and as of 2017, the threshold rose to $5,490,000. This means that there is no estate tax against the majority of estates, and Congress has continually raised the threshold over recent years.įor example, in 2000, estates worth less than $6,750,000 at the decedent's time of death were not subject to a federal estate tax. However, federal estate tax is owed by only those with very large estates. Again, the estate tax is paid by the estate, not by those who inherit from the estate. There is also no federal inheritance tax, but there is a federal estate tax. "No" Federal Inheritance and Estate Taxes However, very few states impose an inheritance tax. If you inherit property of any kind from a decedent who was a resident of another state, you might receive an inheritance tax bill from the state where the decedent lived. As a result, West Virginia no longer imposes a state estate tax.Īlthough there is no WV inheritance tax, that does not mean that you might not be subject to an inheritance tax from another state. West Virginia and a majority of other states took no legislative action in response to the phase-out. The Economic Growth and Tax Relief Reconciliation Act of 2001 phased out the pick-up tax in 2005. The effect was to divert some of the federal estate tax to the state without increasing the estate's overall tax bill. The tax was sometimes called a "pick-up tax" or "sponge tax" because it was equal to part of the total federal estate tax. ![]() Prior to 2005, West Virginia, like many other states, did impose a state estate tax. Nor is there a West Virginia estate tax, which, again, would be charged to the estate of the deceased. That means if you inherit property, either real property, personal property, or intangible property like financial accounts or cash, you will not have to pay an inheritance tax in WV West Virginia inheritance tax on the value of the inherited property. Is there an inheritance tax in West Virginia? Like most states, there is no West Virginia inheritance tax. ![]()
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