Is there a way to avoid tax on inheritance?

Answer 1

if the estate is substantial then a good lawyer and a good accountant would be in order. they would procure smooth sailing for you.

if you are an administrator then you could probably nurture a growth of your own.

Answer 2

There is no federal tax on inheritance. There is a Federal Estate Tax that is the responsibility of the estate. Once the estate is wrapped up and all outstanding bills and taxes are paid, the distributions to the heirs are tax free. There's one exception to that, however. If part of the distribution is an IRA set up by the decedent, you will have to pay income taxes on the funds that you remove from it. That's because the money went in tax-free so it must be taxed now coming out.

A few states do still levy an intheritance tax. PA comes to mind as one that does. In most cases the tax would be paid by the estate but that's not always the case. The executor of the estate can tell you what taxes were paid and what were not. You'll have to take it form there.

Answer 3

1. Any thing (money and property) you receive as gift or inheritance, you (the receiver) don't pay any federal tax. Exception: If you inherit a traditional IRA, you are called a beneficiary. Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive.

2. For any State tax liability check at your State's web site. For most of the States there is no tax.

3. If you inherit a property, your cost basis is the valuation (Fair Market Value) of the property at the date of the decedent's death or the FMV (Fair Market Value) on the alternate valuation date if the personal representative for the estate elects to use alternate valuation.

4. If you sell the inherited property at a price up to your cost basis you don't have any taxes due. However, if you sell the property at price more than the cost basis to you, then you pay the taxes on the profit (sale price minus your cost basis).

Answer 4

There isn't any federal tax on estates under $2 million. If someone has that much money, they should be talking to a good estate planner, not asking on Yahoo Answers.