if someone gets an inheritance, how will this affexct them tax wise..will it be considered income..for instanc

Question

if you make 30,000 a year and inherit 100,000 will this make your income 130,000 and your taxes will be much higher...or do they take some estate tax from the inheritance before giving it to you.

oh he lives in Indiana and said something about they take 42 taxes but he is thinking of moving to another state or country to save this he said.

oh he lives in Indiana and said something about they take 42 taxes but he is thinking of moving to another state or country to save this he said.

I think the amount I may inherit is somewhere between 50,000 and 200,000 but could be as low as 7000..he is vague.

Answer 1

At the Federal level there is no tax. There is a Federal Estate Tax however it is paid by the estate. If you are the sole heir, $100k is well below the Federal Estate Tax exclusion of $2,000,000 so no tax would be due at all.

At the state level there might be an inheritance tax as a few state do still have them -- PA is one that I'm aware of. It's usually paid by the estate, though. The executor of the estate can advise you if there are any unpaid State Inheritance Taxes.

Addendum:

Here are the details on the Indiana Inheritance Tax.

http://www.finance.cch.com/pops/c50s15d170_IN.asp

Answer 2

If you inherited $100,000 it is tax free to you (unless you live in Pennsylvania). Inheritances are not taxed federally, but I do understand that Pennsylvania does tax an inheritance. I don't know about other states, and don't know what state you would be talking about. And if there are any taxes involved with an estate, they are taken out before the inheritance is paid out.