Estate taxes apply at the federal level. They're charged directly against the estate, forcing the estate's personal representative to use cash or sell estate assets to pay the tax.
Estate taxes apply at the federal level. They're charged directly against the estate, forcing the estate's personal representative to use cash or sell estate assets to pay the tax.
In the absence of language in a will or trust to the contrary,
federal estate-tax liability typically doesn't affect specific bequests of cash or property to beneficiaries. Instead, those who receive any property remaining after specific bequests are made end up receiving less than they would in the absence of the estate tax.
Fortunately, there is a relatively high exemption from the federal estate tax. Up to $11.58 million can pass to heirs without any federal estate tax, although exemption amounts on
state estate taxes in certain states are considerably lower and can apply even when the federal estate tax does not.
If the estate improperly fails to pay any estate tax due, the IRS has the power to collect from heirs. Technically, though, this isn't a tax on the heirs but rather a collection from inherited assets that should never have been distributed from the estate in the first place.
There's a lot of confusion about how things work when you receive property after someone's death. Get the facts here.
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Question
Is money received from the sale of inherited property considered taxable income?
Answer
To determine if the sale of inherited property is taxable, you must first determine your basis in the property. The basis of property inherited from a decedent is generally one of the following:
Is money received from the sale of inherited property considered taxable income?
www.irs.gov