If your parents lived in Louisiana, you most likely would not owe any state-level inheritance tax on what you receive. Louisiana no longer collects a state inheritance tax, which means most heirs pay nothing to the state. Whether you owe anything at the federal level depends on the size of your parents’ estate, and for the vast majority of families, the answer is still nothing.
Louisiana Has No State Inheritance Tax
Louisiana does not tax inheritances at the state level. Act 822 of the 2008 Regular Legislative Session repealed the inheritance tax law after the federal government eliminated the state death tax credit that Louisiana’s tax was built around. Today, no Louisiana law requires heirs to pay inheritance taxes on assets they receive from parents or other family members.
This matters if you are comparing what other states do. Several states still impose their own inheritance taxes, including Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. If your parents owned real estate or other property in one of those states, that property may be subject to those states’ rules even if you are a Louisiana resident. For Louisiana-based estates, the state does not impose this tax.
Federal Estate Taxes: Who Actually Pays Them?
The estate pays the federal estate tax before assets are distributed to heirs, meaning this tax does not come directly out of a beneficiary’s pocket. It only applies when the total estate value exceeds the federal exemption threshold, and because that threshold is now quite high, the vast majority of families will never encounter it.
As of 2026, the federal estate tax exemption is $15 million per person, a figure made permanent by legislation signed into law in 2025 and indexed for inflation going forward. For married couples, the exemption can effectively double to $30 million through portability, which allows a surviving spouse to claim any unused portion of the deceased spouse’s exemption after the first death.
Here is what to know about how the federal estate tax works:
- Only estates exceeding $15 million per person are subject to the tax
- The tax applies only to the value above the exemption, not the full estate total
- The top federal rate on amounts above the exemption is 40%
- Married couples can often shelter up to $30 million combined through portability
For most Louisiana families, federal estate tax is not a realistic concern. Where it becomes relevant, typically for estates with significant business interests, investment portfolios, or real property, early planning makes a substantial difference in what heirs ultimately receive.
Income Tax on Inherited Assets
Even when no estate or inheritance tax applies, inherited assets can have income tax consequences when you sell them. This is where the step-up in basis matters.
When you inherit an asset, its tax basis is reset to its fair market value on the date of your parent’s death, not what your parent originally paid for it. This rule is covered under IRS Publication 559.
Here is a practical example: if your parent bought a home for $80,000 and it was worth $300,000 at the time of death, your basis becomes $300,000. If you sell the home for $310,000, you only owe capital gains tax on the $10,000 difference, not on the full $220,000 of appreciation that built up during your parents’ lifetime. This rule applies to most inherited assets, including real estate, stocks, and investment accounts.
What If Your Parent Gave You Money or Property Before They Died?
Gifts made during your parents’ lifetime are treated differently from inheritances. They do not receive the step-up in basis, and large gifts may reduce your parents’ federal lifetime exemption. The federal gift tax exclusion allows a certain amount to be given per year to each recipient without triggering gift tax. Amounts above that annual limit count against the lifetime estate and gift tax exemption.
If your parents made significant transfers before they passed away, a professional can help you work out how those gifts affect what you may owe.
Talk to Estate Attorneys About Your Louisiana Succession
Losing a parent is hard enough without sorting through legal and tax questions on your own. At WJ Blanchard Law, our attorneys help Louisiana families work through the succession process from start to finish.
Contact Our Louisiana Estate Planning Law Firm For Help Today
If you are planning for the future or need guidance with wills, trusts, or probate in Metairie, Louisiana, contact the experienced estate planning attorneys at WJ Blanchard Law to schedule a consultation and protect your family’s legacy today.
We proudly serve New Orleans, Jefferson Parish, and the surrounding areas:
WJ Blanchard Law
2800 Veterans Blvd Suite 257
Metairie, LA 70002
Phone: (504) 313-7478
Hours: Mon-Fri 09:00-17:00
Our firm is located near you. We have an office in Metairie
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