November 21, 2009
DH and I will be receiving a significant inheritance soon and are trying to determine how much inheritance tax we will need to pay on this amount.
I am trying to research this on-line but it is kind of confusing and I do not know how old some of the info I am reading is. Anybody have a reliable on-line resource or anyone out there with knowledge on this?
November 21, 2009 at 5:04PM
The inheritance tax in the US is, to my understanding, acutally called an estate tax and it is not paid by the recipient, but by the estate of the deceased. Some states have other taxes, but it would depend on where the deceased person lives, not on where you would live.
This year, anything less than $3.5 million, is excluded.
If Granny died, all of her estate is valued, home, jewelry, etc. The estate pays the tax, or more accurately, the administrator of the estate pays from the estate's assets.
So if Granny had $1M and all goes to you, lucky you! If she had $10M and wants it distributed to all her grandkids and some charities, say 1/10 to each of ten recipients, then the estate pays the tax and distributes the remainder, which will be less than $1M each.
But if the estate is substantial, I'll recommend that you see your own tax expert ASAP, before you actually receive the moneys.
Here's an article with some overview info.
Here is a link that might be useful: Estate tax in the US