Kentucky’s Inheritance Tax
Kentucky doesn’t collect an estate tax, but it still makes because it imposes a pretty significant inheritance tax at a top rate of 16 percent.
The state does offer an exemption for its inheritance tax—only gifts valued at more than this exemption amount are taxed—but it’s a paltry $500. So if you give your neighbor that $1,000 garden sculpture he’s always coveted, he’ll have to give the state government $80, or 16 percent of the $500 balance over the exemption amount.
Kentucky does spare spouses, siblings, parents, and children from this tax, however.
