An inheritance included in the gross income of the person receiving it is included in the gross income on the final tax return of the person who died. Is it subject to the federal estate tax? Who pays the federal estate tax?
1) The inheritance is subject to the federal estate tax and is paid by the estate of the person who died.
2) The inheritance is subject to the federal estate tax and is paid by the person receiving the inheritance.
3) The inheritance is not subject to the federal estate tax.
4) Cannot be determined based on the given information.