2006-12-02 12:47:39 · 9 answers · asked by mike m 1 in Business & Finance ➔ Taxes ➔ United States
Hi mike!
California may charge you tax if the monies were from a deferred tax type of account such as an IRA or 401K. (The IRS will also.) Your best bet is to check with a CPA in your area. You can also get information from the California Franchise Tax Board at www.ftb.ca.gov. This source however, assumes you know tax law and is really confusing even to those of us who do know something about taxes.
Since you aren't specific as to the type of funds which comprise your inheritance, it is hard to give you a more specific answer. PLEASE, PLEASE see a
CPA (not your buddie's g/f who can keep books but a bona fide Certifide Public Accountant) and inquire with him/her. Take all the documents relating to the inheritance with you to the meeting. You may be happily suprised and not owe any taxes at all, but it will be worth the small fee to be sure.
Peace
2006-12-02 13:03:50 · answer #1 · answered by jeannie 7 · 0⤊ 0⤋
Looks like you need some OFFICIAL information to be sure. Probably best to call the IRS information line. Also, I found a good article and listed the address below. There are many articles on line, but most are very confusing. Basically, the feds are gradually phasing out inheritance taxes..they wil be gone by 2012. Right now there is an exemtion for the first $1,500,000 (as of 2005), then you pay a percentage. Also, you can go to irs. com and click on "contact us" to submit a question.
2006-12-02 13:24:17 · answer #2 · answered by Anonymous · 0⤊ 0⤋
First, congrats!
Secondly, it depends on what you inherited and how much. (Disclaimer: please consult your own tax advisor as individual situations vary.) You probably will end up paying the feds, california, and the locals.
But, if you inherited cash versus real estate versus a trust what you owe may vary. Many trusts are structured to avoid taxation up to an amount set by the state (Calif. in this case I think is close to 1.5M dollars.) Real estate inheritances can be challenging too with the value of it now being your basis (what its worth.) Also, some inheritance take some time to resolve themselves as some states have it go through "probate". So you might not see the inheritance for sometime...
Basicly, its probably worth sitting down with your account and/or tax advisor. Most will do this service for a preset fee ($1K is what it is in my state, unless the inheritance is contested.)
Good luck!
PS Go to the libray and check out Investing for Dummies for E. Tyson, too.
2006-12-02 13:00:53 · answer #3 · answered by korax777 2 · 0⤊ 0⤋
No, estate and inheritance taxes are paid by the estate not by the person receiving it.
2006-12-02 21:15:36 · answer #4 · answered by waggy_33 6 · 0⤊ 0⤋
Yep...doesn't matter where you live. You'll have to pay federal and state, plus local if your city collects a local tax.
Good luck!
2006-12-02 12:49:13 · answer #5 · answered by QueenChristine 4 · 1⤊ 0⤋
You have to report it as income. It becomes part of your total income for the year and as such it is taxable.
Don't "forget" it because there is all kinds of paperwork attached to it. If you try to overlook it, believe me, sooner or later they will find you. But look on the bright side. It's more than you had before, eh?
2006-12-02 12:57:31 · answer #6 · answered by keepsondancing 5 · 0⤊ 1⤋
There is no tax on an inheritance.
2006-12-02 12:49:19 · answer #7 · answered by Barkley Hound 7 · 0⤊ 2⤋
you pay tax only if its more than 500,000 anythings less is not tax
2006-12-02 12:56:52 · answer #8 · answered by roy40372 6 · 0⤊ 0⤋
ok, is yourr problem man.
2006-12-02 12:51:42 · answer #9 · answered by Abdurrahman 5 · 0⤊ 3⤋