Posted By:
Frank WakefieldEstate tax is a fed tax on the estate, based on gross amount of estate, adding back in lifetime transfers in excess of 10k per year per recipient.
Inheritance tax is a state tax on the recipient on an inheritance or bequest. Usually spouses are exempt.
They aren't the same thing at all in this state. Feds tax the estate, if it is large enough. Commonwealth of Kentucky taxes inheritance. Not a joke. They are VERY DIFFERENT taxes. I don't know where warsawlaw practices, but I am certain about what I have said as far as this state.
The issue isn't about taxes on a card that becomes part of your estate. Where folks get hammered is where you schedule a card on an insurance policy for years, then it's gone. Then you die. If it isn't still around you must have sold it, probably when it was no longer scheduled, a quick look at old 1040s will show if you listed that ordinary income and paid tax on it. And if you didn't, then your estate can get popped for the tax, penalty, and interest. No joke there.