Inheritance tax questions?
I will be speaking with an atty for sure but am curious about this now. I live in Florida. My mother lived in Illinois. She passed away in September and I am the executor. She had me listed on her checking acctount, savings account and left two CD's to me as well as the money from the sale of the house once that happens.
My question is...does anyone know what taxes if any I might be responsible for? Thank you in advance for any replies
- curtisports2Lv 78 months ago
The law where she was domiciled rules here. Florida has nothing to do with it.
First and foremost, all of her final expenses and all debts of her estate must be paid before the executor may distribute anything out of the estate after it clears probate. You will have to file her will with the appropriate court in Illinois. In New York, that is Surrogate Court, but could be called something different in Illinois.
If you were named as beneficiary on those CDs, they bypass probate and become yours as soon as you provide the bank a certified copy of the death certificate. Likewise if the savings/checking accounts were Payable On Death (POD) accounts; they would go directly to you.
Illinois does have an estate tax, but it does not apply until the value of estate assets exceeds $4 million. The only taxes you would be paying are the property taxes on the house up until it is sold, and any income tax she owes on her final tax return, which is your responsibility to file - both federal and state, if she had sufficient income to require filing. Unless was still working, had a taxable pension or rental income, it's unlikely.
Should there be any tax-deferred accounts such as a traditional IRA or a company 401k that she never rolled over, those amounts ARE taxable for the beneficiary, but there are ways to minimize the tax hit. A good financial advisor can help with that.
- Max HooplaLv 78 months ago
The estate will be responsible for any taxes.
- SlickterpLv 78 months ago
If your name was on the checking and savings accounts, then that inheritance.
- babyboomer1001Lv 78 months ago
I was disappointed to learn this. In Illinois, death estate taxes start at 28 percent. Yes, you should consult a lawyer. I hope your mother had a trust.
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- JudyLv 78 months ago
Unless her estate was several million or more, there will be no estate or inheritance tax for federal or state. If any of the money was in a tax deferred account like an IRA, 401K or annuity, you'll owe income tax on it when it comes out.
- 8 months ago
As executor you are responsible for paying any debts owed by the estate before it is distributed. That will include any income tax owed by your mother for the current year. Illinois is the relevant tax jurisdiction because that is where she was resident. It has an estate tax but only for estates of over $4m in value.