What tax is imposed on assets that are transferred to heirs in a will?

The tax imposed on assets transferred to heirs in a will is known as the estate tax. This tax is calculated based on the value of the deceased person's estate at the time of their death. The estate tax applies to the total value of all assets, including cash, real estate, and personal property, minus any deductions that might apply, such as debts or expenses related to administering the estate.

When a person passes away, their estate is subject to these taxes before the remaining assets are distributed to heirs. The estate tax is a federal tax, although some states may impose their own estate taxes as well. This tax can significantly impact how much heirs ultimately receive from the estate, as it must be settled before any inheritances are distributed.

In contrast, other options like sales tax are related to certain transactions involving the sale of goods or services, property tax pertains to taxes levied on real estate based on its value, and capital gains tax is applied to the profit made when an asset is sold for more than its purchase price. None of these taxes specifically deal with the transfer of assets at death as the estate tax does.