Will beneficiaries get taxed on their inheritance?
Вставка
- Опубліковано 21 лип 2024
- Will beneficiaries get taxed on their inheritance?
---------------------------------------
We do estate planning. We do probate. And we do it well.
Our firm rests on three core pillars:
1. Family protection
2. Elimination of barriers to entry (we make it easy for you)
3. Estate tax reduction/elimination
If you need estate planning or probate help, we should talk. The easiest way to do that is to click the link below and choose a date and time that work for you (over the phone or in person).
Estate Planning - estatemeeting.com
Probate - pain-free-probate.com/contact
Christopher Small is the owner of CMS Law Firm LLC. He created it with one goal - help YOU live a great life and leave a great legacy.
You'll find information here on estate planning, probate, revocable living trusts, irrevocable trusts, life insurance trusts, charitable giving, wills, trusts, power of attorney, medical power of attorney, trustee selection, and everything in between.
-----------------------------
How to find me out there in the world...
instagram = / thechristophersmall
facebook = / cmslawfirm
iTunes = podcasts.apple.com/us/podcast...
youtube = / cmslawfirmllc
linkedin = / smallchristopher
Thank you for educating me on this topic greatly appreciated 🙏🏿💝
Short and to the point. Great video!
Thanks!
Great info. Thank you. What was presented here confirms what I was recently told by my family's attorney. In my situation the CPA hired by my deceased grandmother's trustee told all of us beneficiaries we owe taxes on 100% of what we received even though I know for a fact all the income that was moved from the estate to the trust was taxed. While certainly the trust earned income in the two years since my grandmother's passing there's no way it earned so much that what we received could've been all from income. I now, unfortunately, need to challenge the accountant and get an amended K1. Not sure how common my situation is but also confused as to how this CPA could've done this.
Awesome. Inheritance from deceased proceeds from sold home California. No taxes taken out yes? Accountant requested SS. And I received K 1. Thank you great help you're awesome
You're welcome!
Your videos have been really helpful.
Great! Happy to help!
Thank you so much! This is the only place I could find clear info on the reason for a K1 vs other "normal" circumstances.
My sisters and I get income from a state of Arizona retirement account that is still paying the estate due to a divorce decree giving our mom part of my dad's retirement. He is still living, so the payments continue to us until he dies. We file an estate return, then each of us is given a K1 and pays taxes. We have money going into a bank account and then give it to my dad, minus accounting fees. (We all feel he deserves it.) Each of us pays significant taxes, but his would be minimal.
I was hoping there was an easier way, but I'm not sure since it seems AZ retirement system can't change it and make the money go to him ... at least we think. (They say we can decline the money, but they can't assure us it will go to my dad. They can somewhat "randomly" give it to another family member or ??) If there's a way to handle this that doesn't cost a fortune, let us know and we'll hire you since we'd save a lot of taxes!
I appreciate your video -- not too long, but had important info! Thanks, again!
You are very welcome. And thank you for sharing. Sounds like you have it set up as best you can.
Thank you, Christopher.
You're welcome!
great video! does an inherited TOD account follow the same guidelines if cashing it out ? I was told I would receive a 1099. Doesn't that mean It would be reported income ?
Thanks for your comments
Do you provide help for people in Washington only? I'm in Texas and have some questions.
Good stuff. Any insight into designating a Non US person/foreign national as a beneficiary to my brokerage account? How complicated or what complication might I encounter? I have an account with Schwab and TSP. Thank you.
My father had dementia never took a step-up or trust on apartment building owned/lived in with Partnership with Mother and Uncle. Building was purchase in 1969 and mother died 1988. Partner uncle sold building in 2010. IRS came after my father for Capital gains and he was paying back money until 2015. Federal tax lien was issued august 12018 and father died August 11, 2018. Next of Kin was not allowed into his apartment owned by family members? His estate was not probate,too! What should we do? This is expense and complicated case?
One thing you're right about - it's complicated. I'd reach out to a probate attorney in your state to see how they can help.
Do I need to file estate taxes for any money that was left in the decent bank account
I am in a strange situation with being a beneficiary of a trust. My father passed right at the onset of covid. He had a will made up shortly before he passed and to my knowledge the executor and myself are to split the estate equally but my sister as the trustee administers it......It's a long story.....
I have many questions.
You should call an attorney in the state you are in to get it sorted out. And, sorry for your loss.
My 2 siblings and I inherited our mother's house (no mortage) and I have decided 6 months later to pay them cash for their interest in the house. I have lived in the house for 20 years while I took care of her and will continue to live there for at least 2 years after an agreement on price is made. What are the tax issues we might face with this arrangement?
First, talk to a local attorney before you do anything specifically. Second, there shouldn't be any tax issues - you will likely have to pay excise tax on the purchase (which is normal with a real estate purchase). Again, talk to a local attorney to get the lay of the land.
Thanks for the information. Question: My wife received an inheritance from her father who was a dual citizen (US and South America). He was living in South America at the time of his death. She wired the money back to US. Since he is a US citizen will 3520 still be the correct form or is there somethingelse?
No idea. I'd consult a tax attorney for that one.
My brother & sister & me inherited a house we are selling in Missouri do we owe just taxes like an income. No inherited tax was just wondering about other tax. Split 3 ways. I am on ssdi. We don’t draw enough on that to tax.
Quick scenario. Mothers property, assets, Everything is in a revocable trust. Sole beneficiary is her daughter. We all live in the same house with the mother. Throughout the mothers life she rented a room and her tax accountant depreciated luckily just the square footage of that room. for the 27.5 years. So the question is. When the house is passed to the daughter in the trust, will the daughter still have to pay back the IRS, the recapturing of the depreciation? Thanks.
I live in New Jersey, I have a brother that lives in California whose passed away there. I am going to be inheriting cash only which I should be receiving early 2022. Will there be a New Jersey Inheritance Tax I will have to pay? Since he was a residence and Passed away in California is the question about the NJ Tax. Thank you for any help!
Not sure. I'd reach out to a New Jersey probate attorney. Valerie Zametti is super good.
My father passed away 2016, and he has an inheritance worth of $2m, i and my mom relocated to Romania that was when I spend all my childhood and I came back to us in 2008, but I don’t live with my father at all before he passed away,but I’m the only child that he gave birth to and after his death I wasn’t able to claim the inheritance then, but my question is where will I start cos I don’t have any idea about the inheritance but I have went to the local attorney that in change of the inheritance couple of time and I don’t want to be screwed up so what do I do ?
Well we are told that we have to pay tax on a inhabitants and the bank that has the money is telling us that we have to pay 5000. To them and they are going to take 10000 before they wire the money to my bank in canada is this legal?
I live in a low income apt. Last year I received a inheritance from land sold when my brother was killed. It was split three ways. My question is where I live, a government housing apt they do recertification s every year asking for out bank statements can they charge me on the inheritance. It's non taxable here in Missouri, and it wasn't earned income so can they do anything?
I'm not a MO attorney, but usually they will count whatever money is in your bank account (or any other account you have) against that calculation.
Short answer is, yes, they will use that money to determine your need calculation.
And, I know this information won't help you, but it might help someone in the future - your brother should have set up a special needs trust for you (assuming you wanted to continue to qualify for these benefits).
I am the beneficiary of annuities one is Qualified and the other is Non -Qualified. I am on social security how does the pay outs effect my SSI
Thank you
You're welcome!
Is that both federal and state? I’m in California
Thank you for the video!
Quick question. Grandmother lived in the state of Washington. She passed and her two sons (California residents) inherited $60k. $30k each. After 3years the IRS is now taxing $17k for the whole $60k. The money is already spent. Does this sound right? $17k for $60k inheritance for IRS?
I don't know. Depends on where the money came from. If it was a retirement account it's possible 28% tax...
My wife and I sent in a joint tax return in April 2021. She passed away in July 2021. How do I take care of her signature on the amended return now for something that was missed on the sent in return?
Sorry for your loss. I think the answer to that question is more of an accounting question. However, they may tell you a probate is necessary to get the required authority to sign.
Which equates to no tax return. Thank you!
Hello, good afternoon. I'm in the process of completing Form 1041 for the trust and issuing K-1 forms to the beneficiaries. The estate has already been distributed, and during that process, the funds were temporarily held in a CD until all paperwork was finalized. At the end of the year, I received the interest earned by the CD, necessitating tax payment on that income. However, I've encountered an issue where two beneficiaries are reluctant to provide their social security numbers. I've read that they are legally obligated to provide this information. Could you confirm if this is indeed the case?
so what are the two states that do income tax on inheritance?
I don't know if there are just two. And technically WA and OR tax the estate, not the inheritance. A quick google search will give you that information.
Also would a individual have pay tax clearance thank you.
I have no idea what tax clearance is. :)
Hello, my mother passed away and I received an annuity fund beneficiary letter. I’m 24 and I’m not too sure what to do or who to talk to about this. It’s saying I could take a total lump sum but pay 20% income taxes. But I’m confused because it mentioned if I withdraw money before I’m 59 & a half years old then I will be taxed another 10%. What should I do or who could I talk to about it? I’m in NYC.
You should talk to a financial planner that can lay out the different scenarios for you and then you can choose the best one for you.
My unsolicited non-financial planner advice (translation = don't listen to me) - take it over a longer period of time. The older you will thank you for it. :)
I wish the video was louder .
Good info thx
I know. Always something I'm trying to figure out...
What about inheriting an IRA? Would that be taxed?
Yes. Anything coming out of an IRA owes income tax, as the investment went in before paying any tax. Talk to an accountant.
should i transfer it or wait till the beneficiary gets it. im in Florida. please answer me
The answer is you should talk to a lawyer in FL. I have a referral if you'd like. A couple minutes with them will save you potential huge consequences down the road.
My lady (we are not married so it has nothing to do with me). She inherited around150k(all cash )in 2017.she got a letter I think in 2019 stating she owed a capital gains tax(I thought it had to be a mistake)she no property to sale just the cash. I realize I lack a lot of info... So question should she have to pay capital gains on a cash inheritance. A friend that does taxes thought in the fact that the executors of the trust her sister and husband did not like my girl
There would usually be no capital gains tax on cash or inherited assets. UNLESS the cash came from an asset that appreciated after death.
I'd probably seek additional information from the taxing authority to get more info.
Do I need to put my Form 1041 Schedule K1 on my income tax return?
That is a CPA question. :)
My uncle passed away intestate. 11 nieces and nephews survived him and 9 nieces and nephews preceded him in death. Are the children of the 9 who preceded him in death heirs to the estate?
In most states there is no inheritance tax up to a certain limit that is beyond most people's reach. HOWEVER, everyone should be aware that if you inherit an IRA/401k/403b or other pre-tax retirement account, all the money you receive from that account is fully taxable at the rate appropriate for your income level. It may have been inherited, but the IRS still will demand their cut as you take distributions on the inherited accounts over 10 years.
That is true. No tax is paid when the money goes in, so it's getting taxed when it comes out.
Also, if you inherit an IRA, you MUST withdraw all of it within 10 years. Cheers.
R u talking about a will or a trust? Everyone is telling me to have my grandma change her will into a trust because I will get taxed? I live in California an she owns a house? Can u please respond back? Thanks
Hi there. I’m going to inherit a house with tenants inside. If I sell the house will there be a capital assess to it
Not sure what you mean by "capital assess," but you should get a step up in basis, which means no capital gains tax from the growth while the person that died owned it.
Living in WA, does this no income tax include trusts? Would the beneficiary pay income tax on the money given from the trust?
There is no income tax in WA state period. However, there is a federal income tax. And trusts have to pay federal income tax too...
And yes, generally tax on income distributed from a trust is paid by the person receiving the income (it passes through the trust). This is good because individual tax rates are often lower than trust tax rates.
Talk to an accountant and/or attorney to confirm.
isnt there a rule that states that inheritances are never taxed?
does this apply to California? we are expecting an inheritance this month.
Most likely, yes, though I'd consult a probate attorney in your state to make sure.
I wanted to know if I have to pay tax on an inheritance if my relative evaded taxes the he evaded over $27 thousand
It's not inheritance tax, but the estate of the decedent is responsible for those income taxes owed, most likely. I'd consult with an attorney in your state.
Do I need a bond if I am the sole beneficiary made administrator of my grandparents?
It depends on what the court says. In WA state, it probably won't be necessary.
will a beneficary of a mortgage surplus have to pay taxes?
Mortgage surplus? If it's income, yes.
Rock chalk Jayhawk!
Im sole Beneficiary to my Mothers Merrill Lynch accounts , and when the account ownership changed , Merrill Lynch held back 20% for Federal Income Tax. I was told I had to file Income Tax because those accounts are considered Income. I paid $36,000 in taxes just on one Inherited IRA that has $180,000 in it. I live in Texas and theres no Inheritance Tax . Am I entitled to receive that money i paid in taxes back? If so, how do i go about it? IRS says Merrill Lynch owes it. Merrill Lynch says IRS owes it. If i dont file an Amended tax return, i can get fined $19,000..
Where do i start?
This is income tax, not inheritance tax. IRAs usually have money put in pre-tax, which means when it comes out, tax is paid. It doesn't matter who takes it out, when it's taken out, tax is owed. You could have owed additional tax over what Merrill took if you were in a higher income tax bracket. I'd talk to an accountant and have them review.
Yes. You are correct, but i thought i only paid tax per distribution. I paid taxes on the whole amount. I sought help thru one of those tax assistants over the phone, and he hung up on me. LoL. Its not funny but i wanted to tell him," imagine how i feel!" Oh how i would very much appreciate if you could help me for a small fee, that i could write off, lol, because im still going thru the Probate Process with my Mothers Estate.
Its like the blind leading the blind over here.
Brother past away, he had $1,700 in his Bank Account. Bank released the funds. Do I pay tax on those funds?
I wouldn't think so. But I'd consult a probate attorney in your state just to make sure (it's likely a 5 minute phone call).
@@CMSLawFirmLLC Thank you !
My grandma in Cali passed away. The executor, my aunt, claims she had a savings that matured this month and so wrote me a check of 10k... I live in NM. Is receiving a large check like that considered non taxable inheritance? My dad mentioned a CD but my aunt did not...
Second question: if I put more than half of it toward an IRA, will that be something that a government program looks at? I can't touch the money really until it's time. I'm 30.
First question: I don't think it's going to be something you have to pay an estate tax on.
Second question: I'd consult an attorney on something like that and also reach out to support for any government programs you might want to participate in.
Thanks!
I have a home thats over $1M , if I were to have an LLC with my kid as the beneficiary and this LLC ownes 51% of my home and I die, will my kid be subject to no capital gains taxes as a result?
Note: My home is over $1M dollars so I will transfer 49% of my interest to my kid as a Tax Exclusion "parent- child transfer" and transfer the other 51% to an LLC that I own and have my kid as the beneficiary AND 49% member of the LLC to hopefully at least delay taxes until my death.. will that in a way be a way to avoid a CIO transfer in ownership 2X on a home thats over $1M?
correct me if im wrong. Thanks!
Couple things. 1 - LLCs don't have beneficiaries. 2. When you die and the house goes to your kids there's no capital gains tax whether in an LLC or not (you're doing extra work for no gain).
My sibling bought me out of my share of deceased parent's house. Is this taxable?
Usually no. But I'd talk to a lawyer or CPA in your state to make sure.
Intestate home passed to children in Ca. 2021, what taxes will have to be paid? some say none, some say step up basis of home, real confusion.
Hard to say. I'd contact a probate attorney or accountant in CA to make sure. However, you should have gotten a step-up in basis on the home to the value on the day the decedent died. That means not having to pay capital gains tax that likely would have accrued.
@@CMSLawFirmLLC That is great advice. Attorney stated its automatic. Waiting now for final petition to be drawn up and submitted to close probate. It will be great when it's over. Thanks for response.
I got so confused on the rentals. I own 5 rental homes, all leased. When I die, they will go to my 4 children. Will there be IRS taxes owed on them? I am in Texas.
It depends on what the total value of your assets are. With that being said, the appreciation on the houses should go away, as the kids will get a step-up in basis (no capital gains tax). However, any income that is created from renting the house would incur income tax as it is generated.
NOTE: I'm not a TX lawyer, so this is just my best guess. Talk to a TX lawyer to make sure this is correct. :)
Please help
good for you for overcoming the alcoholism in your family
Hmmmm, not sure where you got that from. :)
Rock Chalk!
Yes!
Rock chalk!
YES!!
Why is your video reversed?
nope nope nope nope. I refuse to pay t taxes on my brothers inherited house. nope nope nope
here this and I am serious. I just inherited my brothers house with a mortgage. I refuse yes you heard right young handsome man I REFUSE TO PAY TAXES TO THE GOVERNMENT. I just wont tell the IRS anything. My brother bought the house for 200 grand and now its worth 660 grand . NO way is the government getting my money. I shall just not tell anyone. How will the IRS know.?
bro you are a lawyer but can't afford a camera with good audio? what the hell
Been trying to fix this problem for a long time... sorry!
You have no idea what you are talking about!
Okay! Thanks!
You speak too fast.
Trying to fit it all in the time limits!
Just click on the gear on the top right corner and slow down the play speed