QUESTION
I received inheritance and paid inheritance taxes. Do I owe federal taxes?
Asked on Mar 24th, 2013 on Taxation - California
More details to this question:
In 2011, I received an inheritance. I paid inheritance taxes. Now the lawyer for the estate is telling me I owe Federal taxes. Do I owe Federal taxes?
7 ANSWERS
Bruce Givner
California does not have an inheritance tax. California only imposes a tax on an estate when there is a Federal tax. So if you paid a tax to California that means, by definition, that there is a Federal tax.
Answered on Mar 25th, 2013 at 3:37 PM
Probate Attorney serving St. Louis, MO
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Edward L. Armstrong, P.C.
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First of all, I'm not sure what state you paid "inheritance tax" to but Missouri has no inheritance tax. As far as Federal Estate Taxes go, it depends on when the person who left you the inheritance died. If it was recently, the exemption from the Federal Estate Tax is $5 Million. That was true for 2011, and 2012 and is now the permanent exemption. This person you were given the inheritance by would have to have been fairly wealthy.
Answered on Mar 25th, 2013 at 3:32 PM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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California has no inheritance tax and no estate tax. To whom die you pay inheritance tax? What federal tax might you owe? Did your benefactor have an estate worth over $5 million? Sounds fishy from the little you say.
Answered on Mar 25th, 2013 at 3:32 PM
Elder Law Attorney serving Hollister, CA
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Charles R. Perry
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This seems odd. California abolished its inheritance tax a number years ago. Thus, if the decedent and you are both California residents, there would have been no inheritance tax. It is very difficult to believe that you would owe an estate tax after the distribution. It is possible that you owe federal income tax on some or all of the money you received, provided that that money was in a tax-free IRA or similar account where the decedent had not paid taxes on it. I would talk to an independent tax advisor about your situation, and get a second opinion on the subject.
Answered on Mar 25th, 2013 at 3:31 PM
You might owe Federal Taxes. It really depends on what type of money or property you received. I would need to analyze your inheritance in detail to fully answer your question.
Answered on Mar 25th, 2013 at 3:31 PM
Generally no, the estate usually is responsible for federal estate taxes if there are any. However, the estate may distribute to you items that are "income in respect of a decedent" and you would have federal income taxes associated with that.
Answered on Mar 25th, 2013 at 3:31 PM
Estate Planning Attorney serving Wilmington, DE
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Reger Rizzo & Darnall, LLP
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First of all the Estate is responsible for paying inheritance tax and federal estate tax. YOu may be responsible for paying federal income tax.
Answered on Mar 25th, 2013 at 3:31 PM