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#3
10-17-2006, 11:23 PM
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 Re: Basic inheritance question IMAFriend wrote: - quote - > Hi all.
There may be a federal estate tax due, but ONLY if the total estate is> I know there's so many variables, but I'll take any direction or > comments I can get right now. > Person in Alabama passes away and leaves part of their assets (an > amount of money) to someone in California (65+ years old). > Recipient is not working, basically gets social security only. > Does the recipient have to pay taxes? Is that considered income, and > will be taxed just as normal income? > How does that work? Any comments, direction, anything? > Thanks > DougB greater than 2 million. |
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#2
10-17-2006, 02:32 PM
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| Re: Basic inheritance question Rich Carreiro <rlcarr[at]animato.arlington.ma.us> writes: - quote - > "IMAFriend" <imafriend[at]sbcglobal.net> writes:
It also gets more complicated if the assets are in the> > Person in Alabama passes away and leaves part of their assets (an > > amount of money) to someone in California (65+ years old). > > Does the recipient have to pay taxes? > Nothing federal. There may be some state inheritance > It's a non-event with respect to income tax. form of an IRA or 401k or other forms. But if it's just plain cash (or securities) in a plain old taxable account, no, recipient pays no taxes on it. If it includes appreciated securities (or, actually, other appreciated property which has unrealized capital gains) there is actually a tax *benefit* in the form of stepped-up tax basis when the recipient gets around to actually selling the stuff. -- Plain Bread alone for e-mail, thanks. The rest gets trashed. No HTML in E-Mail! -- http://www.expita.com/nomime.html Are you posting responses that are easy for others to follow? http://www.greenend.org.uk/rjk/2000/06/14/quoting |
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#1
10-17-2006, 12:09 PM
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| Re: Basic inheritance question "IMAFriend" <imafriend[at]sbcglobal.net> writes: - quote - > Person in Alabama passes away and leaves part of their assets (an
Nothing federal. There may be some state inheritance> amount of money) to someone in California (65+ years old). > Recipient is not working, basically gets social security only. > Does the recipient have to pay taxes? taxes for the heirs to pay (as opposed to state and federal estate taxes, which are paid by the estate) - quote - > Is that considered income, and
No.- quote - > will be taxed just as normal income?
It's a non-event with respect to income tax.Nothing is reported, no income taxes are paid. -- Rich Carreiro rlcarr[at]animato.arlington.ma.us |
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10-17-2006, 11:53 AM
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| Re: Basic inheritance question IMAFriend wrote: - quote - > Hi all.
The recipient receives the money tax free. It's the donor (deceased) who> I know there's so many variables, but I'll take any direction or > comments I can get right now. > Person in Alabama passes away and leaves part of their assets (an > amount of money) to someone in California (65+ years old). > Recipient is not working, basically gets social security only. > Does the recipient have to pay taxes? Is that considered income, and > will be taxed just as normal income? > How does that work? Any comments, direction, anything? > Thanks > DougB is liable to pay estate taxes, if any. Remarkably, there is little detail needed for this question. (Had you asked when the donor's estate had to pay tax, the question gets complicated). I checked the current laws for Alabama and California, and they both indicate no tax is due. JOE |
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#-1
10-17-2006, 08:57 AM
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| Basic inheritance question Hi all. I know there's so many variables, but I'll take any direction or comments I can get right now. Person in Alabama passes away and leaves part of their assets (an amount of money) to someone in California (65+ years old). Recipient is not working, basically gets social security only. Does the recipient have to pay taxes? Is that considered income, and will be taxed just as normal income? How does that work? Any comments, direction, anything? Thanks DougB |
| Tags |
| basic, inheritance, question |
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