state of massachusetts. 6 kids will inherit. do they pay or does dad's estate pay?
2006-10-12 15:27:21 · 8 answers · asked by guybee99 1 in Business & Finance ➔ Taxes ➔ United States
On the federal side, no tax is due unless the estate exceeds $2 million. For Massachusetts tax, no tax is due unless the estate exceeds $1 million.
2006-10-12 17:12:24 · answer #1 · answered by NotEasilyFooled 5 · 0⤊ 0⤋
Federal Estate Tax:
If all the decedent owns is the house, and they never filed a gift tax return, then there will be no estate tax paid by the estate. The people who inherit stuff never pay estate tax...only the estate does. Estates valued at less than $2,000,000 (for 2006) owe no federal estate taxes.
Federal Inheritance tax:
People who inherit stuff only pay tax on that part which they need to include in income. The only thing I can think of is retirement plans like Traditional IRAs and 401(k)s. The amount in these is taxed as ordinary income to the recipients. No additional 10% penalty is applied regardless of the age of the decedent or recipient. Everything else (cash, possessions) transfers to the recipient tax-free. The house will become the property of the recipient at the fair market value upon death. If the house is not used by the recipient, (if the people who inherit it don't live in the inherited house) and if the house is sold before the recipients move into it, then the house is treated like investment property. What does that mean? You may owe tax or get back tax depending on your profit or loss on the house. You take the sale price of the house and subtract its value when you inherit it, and subtract the selling costs (fees to realtors, fees on the HUD form), and subtract costs to visit and upgrade/prepare the house for sale. If you have a gain, you claim that as long-term capital gain. If you have a loss (most people do), then you can subtract that as a long-term capital loss.
State Inheritance and State Estate taxes are not something I am familiar with in Mass. Sorry.
Hope this helps :)
2006-10-12 15:51:39 · answer #2 · answered by TaxMan 5 · 1⤊ 0⤋
If there no will the State get it! Ha!!! Well, actually it have to go through probate and the State get some money that way. Taxes will vary by State and I not live there. Here it can be $300-1000 per year on every $100,000 of home value per year, depends on County, City or Country home. The kids can pay or it can come from the Estate. Either way, debts will have to be claimed in a certain amount of time for them to be legit. Depends on who he owed and how much. Many have a Death Deal, where it paid if they die. TAXES WILL be paid........remember we never own anything, we just buy the rights to lease from the Government normally called Taxes, you not pay and they Repossess/Evict.
2006-10-12 15:39:07 · answer #3 · answered by Snaglefritz 7 · 0⤊ 0⤋
In 2006 - 2008 an individuals estate has to be greater than $2,000,000 to be subject to estate taxes. Here is a link to some more info, http://www.smartmoney.com/estate/index.cfm?story=estatetax You can also find more info at the IRS website http://www.irs.gov
Before liquidating any assets, I would recommend consuling a tax professional that has experience with estate tax returns.
2006-10-12 15:48:10 · answer #4 · answered by Steve 3 · 1⤊ 0⤋
If that's All he owns, then maybe zero tax. However, that is not likely all that he owns. Estate taxes go up to about 50%
2006-10-12 15:30:15 · answer #5 · answered by rockEsquirrel 5 · 0⤊ 0⤋
If the estate is being put through probate any and all taxes will therein be paid and the amounts paid to heirs will be non-taxable to them.
2006-10-13 04:12:02 · answer #6 · answered by acmeraven 7 · 0⤊ 0⤋
Our house cost 54,000 and we pay 1750 each year for tax. It does depend on your area, though.
2006-10-12 15:35:03 · answer #7 · answered by PsychoPsychoSarah 2 · 0⤊ 2⤋
well it zero tax
2006-10-12 15:31:49 · answer #8 · answered by gracita s 2 · 0⤊ 0⤋