Which tax cost is normally associated with death?

The federal estate tax is a critical element in understanding the financial implications associated with the transfer of wealth upon a person's death. This tax is levied on the total value of a deceased person's estate before it is distributed to heirs. The federal estate tax applies only if the estate exceeds a certain value threshold, which is adjusted periodically for inflation.

When a person dies, their assets—such as real estate, investments, and personal property—are assessed to determine whether the estate is subject to federal estate taxes. It's essential to know that this tax is separate from any income taxes that may be owed on income generated by the estate before distribution or from the estate itself.

In contrast to the federal estate tax, the other choices relate to different tax scenarios. State income tax is typically related to earnings, whereas sales tax concerns goods and services purchased. Finally, gift tax is imposed on transfers of wealth made during a person's life, not after death. These distinctions clarify why federal estate tax is the appropriate answer in the context of costs associated with death.