When money is changing hands, the tax man will usually want a piece of the action. Given this reality, people have questions about how taxation can impact inheritances. We will provide some answers to some of the typical questions that we hear in this blog post. Do you have to report an inheritance on your income tax returns? The answer to this question is generally no, and this is surprising to many people. An inheritance is not considered to be taxable income because the person that left you … [Read more...] about Answers To Estate Taxation Questions
As estate planning attorneys, taxation is one of the subjects that we are asked about the most, and this makes sense. The Internal Revenue Service seems to want to know about every penny that finds its way into your pocket so you would assume that this would extend to inheritances. Plus, most people have heard about the existence of estate taxes so they assume that taxation comes with the territory. In this post, we will provide some clarity, with an emphasis on appreciated assets (assets … [Read more...] about Inherited Assets Get a Step Up in Basis
When you are engaged in your estate planning efforts, it is natural to be concerned about estate taxation. Most people have heard the terms “estate tax” and “death tax” and in this blog post, we will provide some clarity about postmortem asset transfers and taxes. The Federal Estate Tax The federal estate tax is applicable in all 50 states, and sometimes people will refer to it as the death tax. This levy carries a 40 percent maximum rate so it can potentially consume a very significant chunk … [Read more...] about Will My Estate Be Subject to Taxation?