Transfer Tax


DEFINITION of 'Transfer Tax'

Any kind of tax that is levied on the transfer of official documents or other property. Transfer tax is paid by the seller of the property. Gift and estate taxes are both transfer taxes.

Transfer tax is also known as "excise tax" in some states.

BREAKING DOWN 'Transfer Tax'

Transfer taxes can be levied at the federal, state and local levels, depending on the type of property being transferred. States and local municipalities often tax the transfer of legal deeds, certificates and titles to property, while the Internal Revenue Service (IRS) taxes the value of the property itself through gift and estate taxes. Transfer taxes are usually nondeductible, although they may be added to basis on the sale of securities and/or investment property.

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  1. How can a trust lower federal transfer tax liability?

    A trust is an arrangement in which an individual or entity controls property or funds on behalf of someone else without actually ... Read Full Answer >>
  2. Are Cafeteria plans taxable?

    Whether the benefits you receive through your employer-sponsored cafeteria plan are taxable depends entirely on which benefits ... Read Full Answer >>
  3. Why is the Cayman Islands considered a tax haven?

    The Cayman Islands is one of the most well-known tax havens in the world. Unlike most countries, the Cayman Islands does ... Read Full Answer >>
  4. Why is Luxembourg considered a tax haven?

    Luxembourg has been the tax haven of choice for many corporations and mega-rich individuals around the world since the 197 ... Read Full Answer >>
  5. Why is Panama considered a tax haven?

    The Republic of Panama is considered one of the most well-established pure tax havens in the Caribbean due to extensive legislation ... Read Full Answer >>
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    Andorra is one of many locations around the globe considered a tax haven because of its relatively lenient tax laws. However, ... Read Full Answer >>

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