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levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 29919
Experience:  Working for a large tax preparation service
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If I were to leave my 2 children and my husband (now

Customer Question

If I were to leave my 2 children and my husband (now deceased) 1 million dollars, divided equally how would the inheritance tax affect them?
Submitted: 1 month ago.
Category: Capital Gains and Losses
Expert:  levr replied 1 month ago.

There is NO inheritance tax on the federal level...

Still we have estate taxes - paid by the estate not heirs,

but the estate tax exemption in 20917 is $5,490,000 - so only large estates are subject to estate tax.

Expert:  levr replied 1 month ago.

While inheritance is NOT subject to income tax - specifically excluded by the statute,

Some income might be classified as IRD - income in respect of the decedent.

For instance if you inherited tax deferred retirement account - the distribution is taxable as if it were received by the decedent .


Please be aware that some states do have additional estate and/or inheritance tax - that is based on the residency of the deceased - not where beneficiaries are living.

Please let me know where the deceased were living - and I will verify state tax law for you.