Do I Have To Claim An Inheritance On My Taxes ?  

Estate or inheritance tax becomes payable only when the value of the estate exceeds these amounts.

In such a situation it is not incumbent on a beneficiary to claim the inheritance on his or her tax return. But the basis for this is the date of transfer or the date of death of the deceased.

If the value of investments increased by over $600 since date of death, it is incumbent on the trust to file an income tax return. The onus of filing such return will rest with the administrator of the trust. It is for the administrator to ensure that taxes on the estate if any are first remitted to the IRS before distribution to beneficiaries.

The estate tax exemption rate levels in the past few years have been as follows:

2005: First $1,500,000 in assets

2006-2008: First $2,000,000 in assets

2009: First $3,500,000 in assets

Since the tax due has already been deducted at source and paid, there is no onus on further payment by the beneficiaries. Such inheritance is considered by the IRS to be non-taxable principal.

Tax is liable by the beneficiaries only on the investment the make with the funds they receive from the inheritance. For example, a CD purchased with the distribution will not be liable for tax, but the interest it earns attracts tax.

In the case of immovable assets such as property and other investments like shares of stock, the value at death is the basis of computation of taxes for when the asset is sold

The estate might have enhanced in value between the date of death and distribution of assets. In such cases this difference is taxable to the beneficiaries.

More Articles :

WelcomeToWelcomeRocketswag

 

 

    
Do I Have To Claim An Inheritance On My Taxes
 

Federal-Tax-Inheritance-Law      Depending on your place of residence, the tax code may refer to inheritance tax, estate tax and even death duty. In the US, there is a difference between inheritance tax and estate tax. Inheritance taxes are levied on the beneficiaries of an estate; estate taxes are levied on the estate of the dead person. In other places of the world, the terms inheritance tax and estate tax are used interchangeably. More..

 


 

 

 
   
Home  • Bankruptcy Law   • Business Law  • Constitution Law • CopyRight Law   • Criminal LawEmployment Law   • Family Law   • Immigration Law   • Legal Dispute      • Malpractice   • Personal Injury   • Real Estate Law   • Tax Law   • Traffic Law   • Trust Law Legal News

Do I Have To Claim An Inheritance On My Taxes ? )
Copyright © 2012  Rocketswag.com, All Rights Reserved.