Joint bank accounts were created in order for the daughter to pay bills. Daughter did not contribute anything to the accounts. Daughter received sole ownership of the accounts at the death of her dad. The balances are significant. Does the daughter have to pay taxes on the account balances or does it come out of the estate? Does she or the estate have to pay gift taxes, or would it be applied to a lifetime exemption? THanks for any guidance you can provide.
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You did not ask about inheritance taxes (different from
estate or gift taxes). The last time I checked
there were 6 states with inheritance taxes (Iowa, Kentucky, Maryland,
Pennsylvania, New Jersey and Nebraska). Each state imposes their own rules,
deductibles and rates. The fact that it
was a joint account may be immaterial. For example, in Pennsylvania all joint
accounts with right of suvivorship are subject to inheritance tax.
Normally 50% of the amount of the account is taxed unless the account
was opened within a year of the death. Then the entire amount is subject to
inheritance tax. Unless you are positive that the state where she died does not have an inheritance tax, I would suggest
you go to that state’s DOR website and see if they have one. I believe my list is current, but laws change all the time.
You did not ask about inheritance taxes (different from
estate or gift taxes). The last time I checked
there were 6 states with inheritance taxes (Iowa, Kentucky, Maryland,
Pennsylvania, New Jersey and Nebraska). Each state imposes their own rules,
deductibles and rates. The fact that it
was a joint account may be immaterial. For example, in Pennsylvania all joint
accounts with right of suvivorship are subject to inheritance tax.
Normally 50% of the amount of the account is taxed unless the account
was opened within a year of the death. Then the entire amount is subject to
inheritance tax. Unless you are positive that the state where she died does not have an inheritance tax, I would suggest
you go to that state’s DOR website and see if they have one. I believe my list is current, but laws change all the time.
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