US Inheritance Taxes

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muhtar1938
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US Inheritance Taxes

Post by muhtar1938 » Tue May 10, 2011 7:50 am

Dear Group:

My wife is an only child whose widowed mother wants to leave her entire estate to her daughter. I've tried to make sense of what the inheritance law will be like after January 2011, when I understand they will go back to pre-Bush levels. But the best I can deduce is that they will be around 35% We are curious about what taxes will apply to the estate she eventually inherits. The estate is approximately $850,000.00. Thanks for any information you can pass along.

Muhtar

hsv_climber
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Post by hsv_climber » Tue May 10, 2011 7:57 am

$0 up to $5,000,000 till Jan. 2013.

Gill
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Post by Gill » Tue May 10, 2011 8:00 am

You can be quite confident there will be no Federal taxes and likely no state tax either.
Bruce

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HardKnocker
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Post by HardKnocker » Tue May 10, 2011 8:02 am

MBMiner wrote:You can be quite confident there will be no Federal taxes and likely no state tax either.
Bruce
No federal estate tax on estates < $5 million.

Depending on your state you may have a state tax.
“Gold gets dug out of the ground, then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility.”--Warren Buffett

muhtar1938
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Post by muhtar1938 » Tue May 10, 2011 8:26 am

Thank you all very much for answering so quickly. I don't post all that much on this forum, but it's like my online economics course, and much else besides. I bet I've given this site to 50 people in the past five years. It's one of those gems one comes upon from time to time and feels very, very grateful for. It would take an army of acquaintances and friends to share as much insight with, and what are the chances of finding that many. Again, thank you.

Muhtar

Bob's not my name
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Post by Bob's not my name » Tue May 10, 2011 10:45 am

HardKnocker wrote:
MBMiner wrote:You can be quite confident there will be no Federal taxes and likely no state tax either.
Bruce
No federal estate tax on estates < $5 million.

Depending on your state you may have a state tax.
I believe the only states with death tax thresholds below $1M are NJ, OH, and RI.

Don Robins
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Re: US Inheritance Taxes

Post by Don Robins » Tue May 10, 2011 1:05 pm

muhtar1938 wrote:Dear Group:

My wife is an only child whose widowed mother wants to leave her entire estate to her daughter. I've tried to make sense of what the inheritance law will be like after January 2011, when I understand they will go back to pre-Bush levels. But the best I can deduce is that they will be around 35% We are curious about what taxes will apply to the estate she eventually inherits. The estate is approximately $850,000.00. Thanks for any information you can pass along.

Muhtar
You might want to look into estate transfer expenses associated with probate. These can be minimized by advance planning.

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Taylor Larimore
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Words of appreciation !

Post by Taylor Larimore » Tue May 10, 2011 1:20 pm

muhtar1938 wrote:Thank you all very much for answering so quickly. I don't post all that much on this forum, but it's like my online economics course, and much else besides. I bet I've given this site to 50 people in the past five years. It's one of those gems one comes upon from time to time and feels very, very grateful for. It would take an army of acquaintances and friends to share as much insight with, and what are the chances of finding that many. Again, thank you.

Muhtar
Muhtar:

And we thank you for your very kind words.
"Simplicity is the master key to financial success." -- Jack Bogle

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Steelersfan
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Post by Steelersfan » Tue May 10, 2011 2:25 pm

Bob's not my name wrote:
HardKnocker wrote:
MBMiner wrote:You can be quite confident there will be no Federal taxes and likely no state tax either.
Bruce
No federal estate tax on estates < $5 million.

Depending on your state you may have a state tax.
I believe the only states with death tax thresholds below $1M are NJ, OH, and RI.
I know for sure Pennsylvania has an inheritance tax on every inherited dollar (except for spouses).

One thing to do is google your state name and inheritance tax and see what you get.

Better yet is to consult with a CPA or lawyer in your area who does inheritance taxes.

halfnine
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Post by halfnine » Tue May 10, 2011 2:45 pm

HardKnocker wrote: No federal estate tax on estates < $5 million.
Provided the deceased is a US citizen or a resident for estate tax purpose. Otherwise it's 60K. Now, I am assuming that is probably the case but just crossing the i's and dotting the t's.

Bob's not my name
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Post by Bob's not my name » Tue May 10, 2011 3:33 pm

Steelersfan wrote:I know for sure Pennsylvania has an inheritance tax on every inherited dollar (except for spouses).
Wow, yeah. 4.5%. It looks like Indiana (progressive rate after $100,000 exemption), Nebraska (1% over $40,000), and Pennsylvania are the only states with an inheritance tax that does not exempt descendants. The exemption thresholds I mentioned in my prior post are for estate tax. Thanks for the correction.

Lots of states have pending legislation to eliminate these taxes. Can't discuss that further here, just noting that this information is perishable.

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