Is there a tax on an inheritance when the receiver is not a family member?

Answer 1

At the federal level their really is no such thing as an inheritance tax. Rather, there are the highly complex statutes regarding transfer tax (i.e. gift and estate taxation).

So, depending on a whole host of issues, it may be the case that an estate tax return (form 706) was required; and consequently, estate tax paid.

The recipients of the property that formed the estate do NOT report it as income, and therefore do not pay INCOME taxes.

So from that viewpoint, there is no tax on inheritance. Then again... fact is, your inheritance may be that much less as a consequence of the estate tax. For estates that have to pay estate tax (generally >2.5 million in estate assets), it is the executor who is liable for their payment. Where does he/she get the dough to pay the tax-man? Why, the estate assets, of course! Which assets specifically? The decedent's will (if it is an effective will) should specify this. Otherwise, the laws pertaining to intestacy in the state of jurisdiction combined with statutes of the federal tax code will guide the judgment of the executor.

So by now, you probably have an understanding as follows: tax questions are hard! Only a detailed examination of the issues by qualified professionals should answer a question regarding your specific circumstances.

But if this were merely an academic exercise, I would say to you: do not worry, take your inheritance and owe no taxes on it. It does not matter whether the recipient is a family member or not.

Answer 2

Rules for state inheritance tax vary by state. It's not unusual for there to be different tax rates when the heir is an immediate family member compared to if they are not.

Answer 3

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Answer 4

only if it is $10,000 or higher

Answer 5

im almost possitive