When my mom passed she left a will and her house was sold and after certain bills got paid, the remaining balance was split between myself and two brothers. I am retired as well, do I have to put this in my tax returns when I file next year and do I have to pay Federal or state tax and how is this calculated!
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Hi gander2694,
Thank you for your question today!
The federal government doesn't have an inheritance tax. The six states that impose an inheritance tax are:
Of course, state laws are subject to change, so if you are receiving an inheritance, check with your state's tax agency. The tax rates on inheritances can range from less than 1% to as high as 20% of the value of property and cash you inherit.
I hope this answer is helpful!
Have a blessed day!
Eric
Hello,
Typically, the estate will pay any estate tax owed, with the beneficiaries receiving assets from the estate free of income taxes . There are exceptions to retirement assets like IRAs and 401(k)s. As a beneficiary, if you later sell or earn income from inherited assets, there may be income tax consequences.
I hope this answers you question.
There are six states that have an inheritance tax. The six states that impose an inheritance tax are Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania.
Each has different rules and limits.
Hi There:
For federal individual taxes- you should report a gain or loss on inherited real estate. Btw, your basis in the inherited property is the same as your mothers (Condolences) at date of death, which will help mitigate gains.
Please see link below for more information.
@gander2694 wrote:
.....how is this calculated!
For federal income tax purposes, any gain (loss) would be calculated by subtracting the basis of the house (generally the fair market value on date of your mom's passing) from the selling price (less selling expenses).
Typically, if the house is sold within a short period of time after a decedent passes, there is no gain and, in some cases, there is a loss.
Presumably, an executor was named in the will and that person should be the one handling any tax issues for the estate.
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