Under the state inheritance and succession tax statutes, which statement is true?

Under the state inheritance and succession tax statutes, which statement is true?

• A. Any unpaid tax is a lien in the hands of a bona fide purchaser without notice
• B. Any unpaid tax becomes due 15 months after death
• C. A tax due is a lien for 9 years from death
• D. Any tax due is waived under federal estate codes

Answer: (A)

The essential idea here is that state inheritance and succession taxes create a lien on the decedent’s property from the time of death, and that lien remains attached to the property even when ownership passes to a buyer who has no knowledge of it. In other words, unpaid state inheritance tax is a lien that runs with the property, so a bona fide purchaser without notice would still take subject to that lien. This is why the statement about the unpaid tax being a lien in the hands of a buyer who acts in good faith without notice is true. The other options don’t fit because: the tax isn’t simply due a fixed 15 months after death; the lien period isn’t universally a 9-year term; and federal estate tax rules do not waive a state inheritance tax lien.

The essential idea here is that state inheritance and succession taxes create a lien on the decedent’s property from the time of death, and that lien remains attached to the property even when ownership passes to a buyer who has no knowledge of it. In other words, unpaid state inheritance tax is a lien that runs with the property, so a bona fide purchaser without notice would still take subject to that lien. This is why the statement about the unpaid tax being a lien in the hands of a buyer who acts in good faith without notice is true.

The other options don’t fit because: the tax isn’t simply due a fixed 15 months after death; the lien period isn’t universally a 9-year term; and federal estate tax rules do not waive a state inheritance tax lien.