Q:

Is inheritance money taxable?

A:

Quick Answer

TurboTax reports that as of tax year 2013, only eight states require beneficiaries to pay an inheritance tax: Iowa, Pennsylvania, Kentucky, Nebraska, Maryland, Indiana, Tennessee and New Jersey. For tax purposes, unless the inheritance, such as property or stocks, generates an income, the inheritance is not subject to income taxes.

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Full Answer

According to HowStuffWorks, other taxes, such as estate taxes or capital gains taxes, may be levied against the decedent's estate before sums are distributed to beneficiaries. There are some exemptions to these taxes which may prevent the beneficiary from paying any tax on an inheritance. For example, About.com notes that for 2013, any estate that totals less than $5,250,000 is not subject to federal estate taxes.

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Related Questions

  • Q:

    What are the Illinois inheritance tax laws?

    A:

    Illinois has no inheritance tax, according to Bankrate. However, Illinois levies a state estate tax on some estates that have estimated gross values of over $4 million as of 2015, reports Nolo.

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  • Q:

    What does the IRS charge for inheritance tax?

    A:

    The IRS does not charge an inheritance tax, but some states do, and the rates range from 1 percent to 20 percent. States that have an inheritance tax are Iowa, Indiana, Maryland and Kentucky. Nebraska, Pennsylvania, New Jersey and Tennessee also have an inheritance tax, but many people are exempt.

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  • Q:

    What are the opinions on the inheritance tax rate in Illinois?

    A:

    The state of Illinois has no inheritance tax. The death tax imposed by Illinois is an estate tax, and only estates with a value of more than $4 million are subject to it as of 2015. Even estates worth over $4 million may escape the tax due to deductions.

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  • Q:

    How much money do you have to make to file taxes?

    A:

    For the tax year 2014, taxpayers under the age of 65 who are single must file a tax return if they make more than $10,150; this figure is the total of the 2014 standard deduction plus one exemption, according to Turbo Tax. In general, if the total income for the year does not go over the standard deduction for that tax year plus one exemption and the taxpayer is not the dependent of another, then filing a tax return is not mandated under the Internal Revenue Code; however, the income threshold required also depends on age, filing status and income type.

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