On Transfers by Death, the Federal Government Relies on an Estate

question 19

True/False

On transfers by death, the Federal government relies on an estate tax, while states impose an estate tax, an inheritance tax, both taxes, or neither tax.

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Definitions:

Tax-Advantaged Status

Financial accounts or investments that receive favorable tax treatment, such as deductions or tax-free growth.

401(k) Plan

A retirement savings plan sponsored by an employer, allowing employees to save and invest a portion of their paycheck before taxes are taken out.

Keogh Deduction

A Keogh Deduction refers to tax-deferred pension plan contributions for self-employed individuals and unincorporated businesses, allowing for higher contribution limits compared to other retirement accounts.

Self-Employment Tax

A tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves.