Inheritance Taxes?

Question

I just got an inheritance and I live in NYC. What is the percentage of taxes I would have to pay the IRS?

Answer 1

I agree with v b. I have been licensed to prepare taxes more than 18 years and have watched the legislation change on this. If you inherit a house, for example, and rent it out you have rental income, which is taxable. The same case would be if you inherited a house that was already a rental and you continued to rent it. The most important thing to know on whatever you inherit is what is the fair market value at date of death. The value at date of death (typically) is the valuation you use when you dispose of whatever you inherited. The fair market value is defined by IRS as "the value that a willing buyer would pay a unrelated willing seller, neither being under force to buy or sell".

So, if you inherit a bunch of Microsoft stock that the deceased has held for a long time, you use the stock value at date of death to calculate the gain or loss on disposition. There is a small potential of an estate tax (IT"S NOT A DEATH TAX) which is a tax on the estate that is left after someone dies. It happens rarely that there is any estate tax due but the politicians have used this phrase as a club.

So if you inherit property and sell it soon after the date of death there would probably be little if any, federal tax due. I am not familiar with the NY state tax rules, however.

Answer 2

At the federal level, inheritances are generally tax free.

HOWEVER, what did you get? If you inherited and IRA or some other tax-deferred asset, you get to pay the income taxes when you take the money.

How long ago did the person die? If the estate has earned money on the estate's assets (say there was money sitting in a bank account that continued to earn interest), the income is taxable either to the estate or to you. Ask the executor if you will be receiving a "1041 schedule k-1"--if you are, they will be some taxes.

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

You (the heirs) don't get hit with property taxes - the valuables does, beforehand of distribution of the materials to the heirs. The benefit is which you will inherit even though you inherit at a stepped-up fee foundation (honest industry fee as of his loss of existence). He needs to get expert suggestion from an property lawyer.

Answer 5

Only estates over $2 million are subject to federal estate tax. And if this one was, the estate would pay the tax, not you as the heir.

Answer 6

None-there is no Federal Inheritance tax that you are obligated to pay.

Answer 7

0%. There is no Federal inheritance tax. Any estate taxes were paid by the estate -- and for most esates there aren't any of them anyway.

Answer 8

Bostonia has it correct. You will have no tax, unless NYC has some arcane tax. But there will be no federal taxes, and likely no state taxes either.

Answer 9

Ermm.. I'm from the UK...