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 Massachusetts, there is no inheritance tax imposed on individuals who inherit property from a deceased person. Instead, the state levies an estate tax, which is a tax on the overall value of the deceased person's estate before the assets are distributed to the heirs. The estate tax in Massachusetts applies to estates exceeding a certain threshold in value, which is subject to change, so it's important to check the current limit. Beneficiaries, therefore, do not have to pay a tax simply for receiving an inheritance, but the value of the estate they inherit may be reduced by the estate tax if the estate exceeds the Massachusetts exemption amount.