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Gulp, Inheritance/death taxes?

Glowpun

Glowpun

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Hello,

My cousin's mom passed away last year and he and his 2 siblings inherited $160,000.00 total. Would anyone out there know if some kind of tax is due on the monies and if so what is the percentage?

thanks,
 
Unless there is more and the total assets are much more, then nothing is due to the Feds. The states vary though.
 
Glowpun said:
Hello,

My cousin's mom passed away last year and he and his 2 siblings inherited $160,000.00 total. Would anyone out there know if some kind of tax is due on the monies and if so what is the percentage?

thanks,
Click to expand...

It depends on exactly what they inherited but probably not.

In general, when someone dies and transfers cash to beneficiaries there is no taxable income to that beneficiary. If, however, they inherited an IRA or an annuity that may change things. On the whole it is rarely the beneficiaries that owe anything on an inheritance as pretty much all taxable activity takes place at the estate level.
 
Last edited:
Glowpun said:
Hello,

My cousin's mom passed away last year and he and his 2 siblings inherited $160,000.00 total. Would anyone out there know if some kind of tax is due on the monies and if so what is the percentage?

thanks,
Click to expand...

I'd be more concerned with lawyers getting in the mix and getting their claws into it. The family should do as much as they can cooperatively and civilly - their mom would want it that way.
 
Glowpun said:
Hello,

My cousin's mom passed away last year and he and his 2 siblings inherited $160,000.00 total. Would anyone out there know if some kind of tax is due on the monies and if so what is the percentage?

thanks,
Click to expand...

Don't claim I was your accountant to the IRS, but that's not enough to worry.

Q:I have a question on the recently passed changes to the federal estate-tax laws for 2013. What are the exemptions for estates?

—P.O., Reed City, Mich.

A:The basic federal estate-tax exclusion amount for estates of people who die in 2013 is $5,250,000, the Internal Revenue Service announced recently, up from $5,120,000 in 2012.

Estate-Tax Exemption for 2013 - WSJ.com
Click to expand...
 
Not even close to the threshold as far as the feds go. The state in which the decedent died could have estate taxes but I am skeptical they would have them at $80K--most states opted into the fed system just to take a chunk of the fed amount collected from their state to avoid having to have an estate tax division.
 
As far as I know, the inheritance has to be considerably more than that for inheritance taxes to apply. Not sure about the state level, but I know that here, inheritance isn't taxed as a rule.
 
Glowpun said:
Hello,

My cousin's mom passed away last year and he and his 2 siblings inherited $160,000.00 total. Would anyone out there know if some kind of tax is due on the monies and if so what is the percentage?

thanks,
Click to expand...

It depends on how they inherited it actually. If the money first became part of her estate, and was then disbursed to her children, then the estate should have paid any taxes which might be due before the money was given out, and they'd only owe money if it was over the threshold for federal or state estate taxes, which it probably isn't. If, however, they inherited it directly (for example if she had an IRA or some other type of retirement account, and they were listed directly as beneficiaries so that it didn't go into the estate) then they might owe some taxes. That money would simply be listed as part of their income on their taxes, and they'd pay whatever income tax rate applies to them on it.

They might want to consider hiring someone to do their taxes. We did last year when all of my wife's parents' inheritance was part of our tax situation, since we owed taxes on some parts of it but not other parts. It only cost us about $400 I think.
 
Glowpun said:
Hello,

My cousin's mom passed away last year and he and his 2 siblings inherited $160,000.00 total. Would anyone out there know if some kind of tax is due on the monies and if so what is the percentage?

thanks,
Click to expand...


i'm sure the money grabbing government will find a way to take some of it.
 
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