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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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How much inheritance tax do you have to pay on an estate worth

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How much inheritance tax do you have to pay on an estate worth
I was under the impression that we would not have to pay anything, if the estate wasn't worth more than 1.5 million.

My sister is the executor, and she disagree's with me.
There are 8 heirs.

Could you please clear this up for us.

Thank You,
Betty Greer
Hello betlou,

The United States does not impose an inheritance tax. Instead, they impose an estate tax on any estate which exceeds a certain value. For deaths occuring in the year 2009, only estates valued at $3.5 million or more are subject to federal estate tax. In 2008 the limit was $2 million.

I assume from your post that you are from the state of NC. If that is also where the decedent lived, then NC has a separate state estate tax, but it only applies to estates valued at $1 million or more.

The only way that you would owe any taxes on any of the $250,000, is if part or all of those assets were held inside of an IRA account or a similar tax deferred retirement account. Money inside of an IRA account or other tax deferred account has never been tax paid to begin with, so beneficiaries who receive such accounts are subject to regular income tax on those amounts when they are withdrawn. But money held inside of a regular tax paid savings account or checking account, or any type of regular stocks or bonds, or any property which you received, is not subject to any inheritance tax, and the value is too low to be subject to estate taxes.

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Thank you betlou

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