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My Parents have passed away and I am the Trustee of their Revocable

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Trusts and the Personal Representative...
My Parents have passed away and I am the Trustee of their Revocable Trusts and the Personal Representative of their Wills. I have 2 borthers and I am to distribute the inheritance to all 3 of us equally. The entire estate is worth about $100,000. Do we have to pay federal estate tax? We all live in California. Will we also have to pay inheritance tax as individuals?
Submitted: 9 years ago.Category: Tax
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Answered in 13 minutes by:
1/3/2009
Tax Professional: Lev, Tax Advisor replied 9 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,724
Experience: Taxes, Immigration, Labor Relations
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Sorry for your loss...

Please be aware that the Revocable Trusts becomes irrevocable after your parents died.

 

There is no inheritance tax neither on the federal level nor in California. Inheritance is not taxable income and should not be reported on your tax return.

 

Assuming your parents weer living in California - California doesn't have estate taxes. Federal estate taxes are for estates with total value above $2,000,000 (for decedents died in 2008)

 

Only if the estate includes any tax deferred accounts - such as IRAs, 401k, etc - and beneficiaries would take any distributions from these accounts - the distributed amounts would be taxable income.

 

As the Personal Representative you may want to become familiar with the IRS publication 559 - http://www.irs.gov/pub/irs-pdf/p559.pdf

 

Please let me know if you need any clarification.

Lev
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