My brother was killed in a car accident and a few years later we were awarded money through the insurance company the car was carried under.
A percent of that money was taken out for inheritance tax's.
Is this money we were awarded for wrongfull death really requarded as an inheritance?
It don't make sense to me.
2007-08-09 07:08:17 · 6 answers · asked by whocares_3076 1 in Business & Finance ➔ Taxes ➔ United States
The amount awarded was $50,000, through the auto insurance company. And this money was awarded in 2003.
2007-08-09 07:19:52 · update #1
I talked to the firm today in which represented us. And they said it was for inheritance tax's.
The amount taken out for this was $5000.
This is what the paperwork states:
"To be paid the the Estate of xxxxxx (decendent) and distributed through the probate process according to the laws of inestate succession, as damages under the Pennsylvania Survival Act"
2007-08-09 07:33:07 · update #2
How much money are we talking about? It's not an inheritance tax, by the way, it would be an estate tax, and life insurance or other insurance proceeds are a part of an estate. For 2007 an estate would have to exceed $2,000,000 in net worth (assets minus liabilities, and state taxes) to be taxable.
2007-08-09 07:12:01 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Your Q was ..."Is this money we were awarded for wrongfull death really requarded as an inheritance? ".
The wrongful death claim was made by the Estate of Your Brother. The insurance was paid to the Estate of Your Brother. It was a part of the estate of your brother. As such, it is taxed in your brother's estate.
The tax paid was and estate tax levied against your brother's estate. It was not an inheritance tax levied against you.
What you received was your share of his estate, after taxes, as provided for in his Will, or the state's intestacy laws.
This is a classic case of why everyone 18 years or older should have a Will. You may not perceive you have an estate but you never know how you will die and whether someone else will be responsible.
2007-08-09 07:20:06 · answer #2 · answered by CPA/PFS 2 · 1⤊ 0⤋
They could not have withheld money for inheritance taxes. There is no such provision in tax law for that.
If the money was paid to his estate and if the estate was subsequently then worth more than the Estate Tax exclusion amount then some of it would be lost to inheritance tax. If the money was paid directly to his survivors then no inheritance tax would be due.
Since the settlement was due to physical injury it is not taxable income to the recipients. If a portion of it was for punitive damages that portion would be taxed.
2007-08-09 07:23:31 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 1⤋
Yes.
Depending on the state you live in, once the total assets of the estate are over a set amount, then you pay inheritance tax.
It doesn't matter what the circumstances of death were, when you die your heirs pay.
2007-08-09 07:17:32 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Pennsylvania's solution to taxing the rich. Tax EVERYBODY! Even if they're dead!
I'm not trying to sarcastic or funny. I too, live in Pennsylvania.
2007-08-09 08:13:30 · answer #5 · answered by Barry auh2o 7 · 1⤊ 0⤋
they do no longer might desire to. Obama continues to be making excuses to the groupies why he would not refuse to sign any bill with earmarks, he ,made 2 years in the past. All he has to do is refuse to sign expenditures that have them, like he promised.
2016-11-11 20:55:12 · answer #6 · answered by ? 4 · 0⤊ 0⤋