An inheritance tax is a tax imposed on a person who inherits property from a deceased person. There is no federal inheritance tax, but some states have an inheritance tax.
In the state of Alabama, there is no state-level inheritance tax. This means that individuals who inherit property or assets from a deceased person are not required to pay taxes to the state of Alabama simply because they have received an inheritance. It's important to note that while there is no federal inheritance tax, there is a federal estate tax, which is a tax on the transfer of the estate of a deceased person. However, the estate tax only applies to estates exceeding a certain value threshold, which is adjusted annually for inflation. As of the knowledge cutoff in 2023, Alabama also does not have a state estate tax, so the overall tax implications for inheritances in Alabama are generally limited to the federal estate tax, if applicable.