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Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My grandmother passed away in March of this year. My Dad

Resolved Question:

My grandmother passed away in March of this year.

My Dad has just learned she left him 299,000 dollars.

Its my understanding that now the thresh-hold for having to pay the IRS on estate tax is only for over 3.5 million. Is that correct?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello jmerlino,

Your understanding is correct. For deaths occuring in the year 2009, no federal estate taxes are due on estates valued at $3.5 million or less. There are some states which impose a separate inheritance tax, but Texas and Nevada have no such tax.

As long as this money that was left to your father is part of a regular bank account, then your father will owe no taxes. If the money is part of an IRA account or a 401k account or any other type of tax deferred retirement plan account, then he would be liable for regular income tax as he withdraws the funds. But if the money is simply part of a regular checking or savings account or even held in regular stocks and bonds, then he will owe no tax, and he does not even need to report receipt of this inheritance on his returns.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you jmerlino

Customer: replied 7 years ago.
thanks so much
Expert:  Merlo replied 7 years ago.
You are most welcome. Please let me know if you have more questions.

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