Which tax is levied on the transfer of property and life insurance at death?

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Study for the State Finance Challenge Test. Prepare with quizzes and multiple choice questions, each offering hints and explanations. Enhance your understanding and get ready for success!

Multiple Choice

Which tax is levied on the transfer of property and life insurance at death?

Explanation:
Estate tax is the tax levied on the transfer of a person’s property at death. It applies to the value of the deceased’s assets, and if a life insurance policy is owned by the deceased or the policy owner has certain rights, the proceeds can become part of the taxable estate. This means the tax is assessed on what the person leaves behind and is paid out of the estate before heirs receive assets. The other options aren’t taxes on transferring assets at death—even though life insurance is mentioned, the mechanism described fits the estate tax, not negligence, overdraft protection, or a closed-end fund.

Estate tax is the tax levied on the transfer of a person’s property at death. It applies to the value of the deceased’s assets, and if a life insurance policy is owned by the deceased or the policy owner has certain rights, the proceeds can become part of the taxable estate. This means the tax is assessed on what the person leaves behind and is paid out of the estate before heirs receive assets. The other options aren’t taxes on transferring assets at death—even though life insurance is mentioned, the mechanism described fits the estate tax, not negligence, overdraft protection, or a closed-end fund.

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