Question

Linda inherited an estate worth $225,000. The attorney told her that the inheritance tax was 7% and that they would deduct it from the estate before giving her the money. How much money will Linda receive?

(a) $223,425
(b) $209,250
(c) $135,000
(d) $15,750​

Answer 1

The inheritance tax is calculated as a percentage of the value of the estate that exceeds an exemption amount. The exemption amount varies by state and can range from $0 to $5.93 million in 2021 for federal estate tax purposes.

In Linda’s case, the inheritance tax is 7% of the estate worth $225,000. Therefore, the amount of money Linda will receive is calculated as follows:

$225,000 - (7% x $225,000) = $209,250

So the answer is (b) $209,250.

I hope that helps! Let me know if you have any other questions.

Answer 2

Answer- The inheritance tax is 7% of the estate, so we need to multiply the estate value by 0.07 to find the amount of tax that will be deducted:

Tax = 0.07 x $225,000 = $15,750

To find out how much money Linda will receive, we need to subtract the tax from the estate value:

Amount received = $225,000 - $15,750 = $209,250

Therefore, Linda will receive $209,250. Answer (b) is correct.