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Inheritance Tax Specialists Here?

Discussion in 'General' started by britx303, Aug 28, 2021.

  1. britx303

    britx303 Boomstick Butcher…..

    I know very little on the subject, but apparently an Uncle that died last year that hated all of us, had an estate get divided up and we each are getting a little something, I’m now finding out. Turns out the guy was literally a millionaire in cash/liquid assets alone. I’m not getting that much nor did I expect or want it, I’m not a money grubber. Anyhow, don’t we pay taxes on inheritance cash? All I’m seeing online is it varies state by state, and also depends on what state the deceased was living in at time of death. Surely there’s a tax expert here………Thanks
     
  2. Ducti89

    Ducti89 Ticketing Melka’s dirtbike.....

    You will. The feds take their cut followed bu the state. Also, there is an Executer fee which they may take from the estate if one was established.
     
  3. beac83

    beac83 "My safeword is bananna"

    Not a tax guy, but having handled estates as an Executor: A very high level view:

    The estate will pay a federal estate tax if the estate is worth over ~$11 Million. Each state has different levels where state estate taxes kick in, and these are in addition to federal estate tax.

    The estate will pay income tax on any income the estate has from the date of death until the assets are distributed to those who inherit them. (Interest, capital gains, dividends, ongoing business operations, etc.)
    If stocks are inherited, they are inherited at the value they had at the date of death. You won't pay capital gain tax on stocks inherited that the decedent would have paid, but will pay for any earnings/gains after the date of death.

    Your state laws may also have additional tax burdens.

    Good luck. Hopefully your uncle had good estate planning and had selected a competent Executor.
     
    britx303 and Ducti89 like this.
  4. Yzasserina

    Yzasserina sound it out

    All beac said is correct. You, as a beneficiary, do not pay tax on what you inherit just because you inherited it, at the Federal level, and in all but six States.

    There are two separate taxes: estate tax, which your uncle's estate pays at the Federal and State level under certain circumstances, and inheritance tax, which is a State tax levied on benificiaries by IA, KY, MD, NE, NJ and PA. Unless you live in one the six States and the amount you're inheriting is sizeable, the answer is no, you're not going to pay any tax.
     
    Last edited: Aug 28, 2021
  5. auminer

    auminer Renaissance Redneck

    Do you trust your wife?

    [​IMG]
     
    acorn27, Chino52405 and britx303 like this.
  6. britx303

    britx303 Boomstick Butcher…..

    It’s me I don’t trust:crackup:
     
  7. britx303

    britx303 Boomstick Butcher…..

    From how I’m reading the states that tax, do so if the money is coming from within those tax states. But the funds are coming from a state that does not have them, which makes me “think” I don’t pay any further taxes after estate taxes are paid?????
     
  8. Yzasserina

    Yzasserina sound it out

    What state are you a resident of? What state was your uncle a resident of? I'll look it up later today. Estate tax and inheritance tax are two different things.

    Not an attorney, not a tax preparer, but I quarterbacked a lot of estate planning in my career as the CFO for a wealthy family, so it's rare I get tangled up in my underwear...
     
    L8RSK8R, beac83 and Gino230 like this.
  9. jrsamples

    jrsamples Banned

    Kitty cat is impressing me. :bow:
     
    Kev59 likes this.
  10. britx303

    britx303 Boomstick Butcher…..

    I’m in MD. Uncle was Florida
     
  11. Yzasserina

    Yzasserina sound it out

    OK will revert back later today. Also confirm you will receive cash, no other assets. Shouldn't change the answer but I don't want to pepper you with a bunch of follow up questions.
     
  12. rd400racer

    rd400racer Well-Known Member

    Interesting, because I'm in KY dealing with my mom's estate and that the first I've heard of us having to pay any taxes period. While mom wasn't ultra wealthy, her estate will still be 7 figures by the time were done and we've been told by our attorney that there will be no tax issues.
     
  13. Yzasserina

    Yzasserina sound it out

    It always depends. The size, the relationship of the legatee (I suspect this is the answer for you, she was your mother). I'm sure your attorney knows what he/she is doing...
     
  14. britx303

    britx303 Boomstick Butcher…..

    Cash only
     
  15. Yzasserina

    Yzasserina sound it out

    As her child, you are a Class A beneficiary and are therefore exempt from inheritance tax from her estate.

    That'll be $1,000, please. :cool:
     
    Britt and rd400racer like this.
  16. StaccatoFan

    StaccatoFan My 13 year old is faster than your President

    Brit. Talk to a CPA. Call my Brother in Minnishitholia if you want and ask. Tell him I sent ya. He will answer your questions.

    Names Brad. Itascatax.com.
     
  17. Yzasserina

    Yzasserina sound it out

    No inheritance tax for you, as your uncle neither was a MD resident nor did he own MD real estate (you can confirm the last part). Interestingly, MD residents and non-residents alike receiving bequests from MD residents or MD domiciled assets are subject to inheritance tax (which the estate usually pays and you get your bequest net of the inheritance tax), as the trigger for the tax is the residency of the decedent's assets. Be glad your dearly departed uncle was in FL.
     
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  18. StaccatoFan

    StaccatoFan My 13 year old is faster than your President

    britx303 likes this.
  19. Yzasserina

    Yzasserina sound it out

    I don't understand why you posted this. The article you linked to is irrelevant to his question, and gives some fluffy answers to questions he didn't ask. Whether or not the money was taxed previously is also irrelevant, as estate and inheritance taxes are effectively transfer taxes, not income taxes; they are determined based upon the value of the assets on a specific date. This is what @beac83 was talking about earlier; the beneficiary gets a step-up in basis because the beneficiary is determined to have inherited an asset that has already been taxed for its appreciation in value. Irrelevant to cash, very relevant to all other assets.

    If he invested the money he inherited in some CD to park it before he sent his kid off to college and earned $100.38, he would pay income tax on those earnings, just like he would have if he had socked away the cash through his regular job, there is no difference.

    So, let me be clear. @britx303 , based on the facts and circumstances known to the Beeb, provided your uncle did not own any real property in MD, you absolutely are not subject to inheritance tax, there is no may about it.
     
  20. L8RSK8R

    L8RSK8R Well-Known Member

    "so it's rare I get tangled up in my underwear..."

    Brilliant :)
     

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