There are more than one type of tax on assets when a person dies.  They can be confusing.  Here is a simple definition of the different types of taxes. 

1. Estate Tax and Gift Taxes.  This is a tax on the transfer of wealth and are typically paid out of the estate.  The current tax exemption limit is $11.7 million but after 2025 this limit is scheduled to drop to $3.5 million.  At this time this tax is to tax the transfer of wealth for the very rich.  The same rate apply for estate tax and gift tax, because if property is gifted it is not in the estate and therefore not subject to estate tax.
2. Capital Gains Tax.  This is a tax on the profit one gets when they sell an asset.  The difference between the basis (price the asset was acquired) and the sales price.  Capital gains tax rates can be from 15% to 20%.  Inherited property can qualify for a “step up in basis” which may reduce the tax bill.  The basis is “stepped up” to the value as of the time of death.  Not all assets qualify for capital gains treatment suc as retirement accounts, 401kK’s and IRA’s.
3. Income Tax.  The principal which is inherited usually is not taxed as income.  However, there are exceptions.  Money which is withdrawn from retirement accounts it taxed as regular income.  Whoever makes the withdrawal (the owner or the heir) must pay the income taxes.  Currently the Federal Income Tax rate is from zero to 37%
4. Property Tax.  Upon the transfer of real property the property transferred is reassessed under proposition 13.  Meaning the property taxes will usually go up when there is an inheritance.  After February 15, 2021 the only exception to that is when the property is a primary residence and the child lives on the property after the death of the parent the property taxes are only increased on any assessed valuation over $1,000,000.
5. Sales Tax.  There is no Sales Tax on estate property because this usually involves the purchase of personal property.  This tax is usually paid by the purchaser of the property.