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Colorado has no inheritance tax, and there is no federal inheritance tax. There is federal estate tax if the estate that was left was more than 2 million, however this is per person, so the actual estate of each spouse would have to be calculated. If it is less than 2 million, no need for estate tax.
There are no income taxes on inheritance. However, the only type of inherited funds that may be subject to income tax would be tax deferred type of accounts, such as pension, 401k etc. In this case, they would be taxable in the same manner to your girlfriend as they would be to the decedent.
I am sorry, I was offline when you responded.
5 million would definitely be over the estate tax limit.
Here is a link to common estate tax questions: http://www.irs.gov/businesses/small/article/0,,id=108143,00.html
The first 2 million of estate would be exempt (assuming that the entire estate belonged to the spouse who died last, and that there was no bypass trust set up).
There are some deductions for federal estate tax. The maximum percentage is 45%.
Hi, I'm not sure what your question is. Was your girlfriend given property and money, or did she inherit the money and property? You stated before that she inherited. No gift tax concerns would be necessary if she inherited. However, due to the large estate size, whoever is the administrator of the estate will need to file a Federal estate tax return and pay any necessary estate taxes before the money or property is distributed to beneficiaries. The estate tax should be paid out of the funds in the estate, not directly by the beneficiaries.