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winktax
winktax, Enrolled Agent
Category: Tax
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my grandmother died on December 3, 2012 the total value of

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my grandmother died on December 3, 2012 the total value of the estate is about 2,000,000.00$ I will inherit approximatley $140,000.00. The will stated that the farm be sold immediately at auction with 2 of my cousns recievign 1/3 of the money each and the remaining 1/3 will be divied equally among m 4 sisters and myself. The farm sold for $1,285,000.00 The house is to be sold immeditely and the money divided 5 ways equally among my sisters and me. The executor informed me it was going to sold for 54,000.00 I already recieved a life insurance check for 1,700.00 and Approximately 17,000.00 from investments she had through XXXXX XXXXX which had been divided equally 7 ways among my 2 cousins and us 5 grandaughters. I
she also left me a Certificate of deposit payable on death in the amount of 27,000.00 She also left some CD's to my siter for 25,000.00 my cousin for 50,000.00 and my mother for 140,000.00. My grandmother resided all her life in the state of Kansas as do I. Do i have to pay inheritance tax?
Submitted: 1 year ago.
Category: Tax
Expert:  winktax replied 1 year ago.

winktax :

Inheritance tax when due is paid by the Estate of deceased. An Estate tax return Form 706 is the form used to declare the value of the estate and figure the inheritance tax.

winktax :

Estate/Inheritance tax is due for deaths in 2012 for estates greater than $5,120,000. In your case the total value of the estate is $2,000,000 thus no Federal estate taxes will be paid by the estate. Heirs/beneficiaries of the an estate do not pay any inheritance taxes. They may have to pay income taxes depending on the type of assets inherited.

winktax :

Generally items that are tax deferred when inherited are subject to income taxes to the heir. These would be pensions, retirement accounts (IRA, 401k, 403b), tax deferred annuities and US Savings bonds. (Roth IRA's are not subject to income tax)

winktax :

Cash, appreciated property (land, house, farm) are not subject to income taxes to the heirs. This property is valued at the date of death and that value becomes the start point for the heirs. Any income earned on money after death is subject to income taxes on the heirs, ie. interest earned on the CD after death would taxed on the heirs tax return.

winktax :

Kansas Inheritance tax was repealed for individuals passing after July 1 2008. So no Kansas Inheritance or Estate taxes are due.

winktax :

So from your description it looks as if you are not inheriting any property that would be subject to income taxes and the value of the estate is under the taxable amount therefore no Estate taxes will be due either.

winktax, Enrolled Agent
Category: Tax
Satisfied Customers: 425
Experience: 18 years experience as an Enrolled Agent, insurance agent, stock broker and financial advisor.
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winktax
winktax
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18 years experience as an Enrolled Agent, insurance agent, stock broker and financial advisor.