RE: IOWA Inheritance Tax (not Income Tax!) - IOWA ANSWER ONLY
It is important to know who is to receive property and the value of the property, because the Iowa inheritance tax is based upon each share of the estate. The tax is based upon a person’s (beneficiary’s) right to receive money or property which was owned by the decedent at the date of death.
The entire amount of property, interest in property, and income passing solely to the surviving spouse, lineal ascendants, lineal descendants, and stepchildren and their lineal descendants (for deaths on or after July 1, 2016) is exempt from tax. Lineal ascendants include parents, grandparents, and great grandparents. Lineal descendants include children, grandchildren, and great grandchildren, whether biological or legally-adopted
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State
Inheritance Tax, and Federal or State Estate Tax, are not a part of the Income Tax system.
TurboTax only supports Income Tax filings.
Inheritance Taxes and Estate Taxes are not allowable deductions, in general, on Income Tax filing
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The ONLY STATES with INHERITANCE TAX on bequests to beneficiaries are:
- Iowa - no tax assessed if decedent's estate is under $25,000
- Kentucky
- Maryland -lowest top tax inheritance tax rate pf 10%; small estates of under $30,000 exempt
- Nebraska -highest top tax inheritance tax rate pf 18%
- New Jersey
- Pennsylvania
All six states exempt spouses, and depending on state, exemption varies for immediate relatives.
If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67
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