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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29658
Experience:  Taxes, Immigration, Labor Relations
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I inherited $71K from my parents estate - it finished going

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I inherited $71K from my parents' estate - it finished going through probate and I got a check a few weeks ago. How much should I put in escrow to pay the tax I'm going to get hit with?

Lev :

Hi and welcome to Just Answer!
There is NO inheritance tax on the federal level, no inheritance tax in Florida.
Federal estate taxes are paid by the estate - not by beneficiaries - so if there were any estate taxes (that is possible for large estates above $5,000,000) - they should be already paid by the estate before the distribution - and should not be your concern.
In additional - inheritance is not included into taxable income for income tax purposes.


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Sorry - you accepted too soon - and some information was missed.
I am posting it now.

However - some income received by the estate AFTER the decedent passed away might be classified as Income in Respect of the Decedent (IRD) - and could be taxable for the estate. Examples of IRD include interest and dividends paid to the estate AFTER the date of death, distributions from tax deferred accounts (401k, IRA, annuity, etc), gain from the sale of inherited assets.
If the estate received taxable income - such income is generally passed to beneficiaries and reported on form K1. So - you need to verify if the amount of $71,000 that you received from the estate includes any taxable IRD ? That question should be directed to the executor of the estate.
Customer: replied 4 years ago.

I saw your second response that further clarified the initial answer, and took your advice. I spoke with the executor of the estate, and was told that all the taxes were already handled, and that the heirs had no responsibility for them. So thank you for the heads-up. It certainly cemented my peace of mind about the matter.