Iowa inheritance tax question.
- Thread starter CadeHawk
- Start date
Liberals don't want you to keep any of it.
You SHOULD be allowed to keep it all. Unfortunately, there are those out there who feel the government deserves that money more than who the deceased wishes.
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You'll pay no inheritance tax.
If your grandma's estate totaled in the millions, it may be subject to federal inheritance tax, but that doesn't affect you.
Should be plenty of lawyers and CPA's on this board to give you an accurate answer about whether you will owe state or federal income tax. My guess to both is 'no'.
Inheritance is different from income or gift taxes. If it was a $38,000 gift, he would owe, as the max gift amount is something like $14-15k nowadays for 'tax free' gifting.
I would guess that you owe nothing as the lawyers would have been required to pay the taxes before disbursement.
This was my thought. When my grandfather died a few years ago each grandkid got $30,000. My dad was in charge of the estate and I remember him saying "after taxes and lawyer fees, this is what each grandkid/kid gets.
Might be in how the inheritance/will was set up, too. If someone plans properly, you should not owe on inheritance, as I understand it, for small amounts. Same for the 'gift tax'.
I have no idea what happened in your case, but a simple google search will show that an inheritance, no matter the size, is subject to no federal income or payroll taxes. If the total estate exceeds a certain size, then the estate is subject to the inheritance tax, not the recipient.
Someone else mentioned gifts and taxes on those gifts, similarly, the giver of a gift exceeding $14,000 is subject to the gift tax, I believe it is 20%. The recipient pays no taxes on that gift.
Again, Google is your friend. There is literally thousands of references that will say the same thing. Property or cash inherited is never subject to federal income taxes. The estate tax, in the small number of estates subject to that tax, is withdrawn prior to disbursement in most cases. I can't remember the exemption size for estates, but it is in the millions. If the estate we are talking about was not of that size, you should be given a refund of that 20%.
They probably tell everyone that, and the ones that don't do their homework just lose 20% of their money.
Just because they 'withheld it as a general policy' doesn't mean you ended up paying it; when you filed your taxes, that would have shown up as 'tax paid', and you would then have had lower tax liability when filing, or gotten a refund. If they withheld it, they HAD to have reported it to the IRS and provided you some form of 1099 document that indicated you paid that tax already.
If they are cutting a check directly to you out of a pension, 20% FIT is required. It's pre-taxed money. Someone has to pay taxes on it. I'm sure there was a way for the estate to pick up that tax, but when that company generates a W-9 at the end of the year, that money went to you and that's how it will be reported - again, unless somehow there was something in place for the estate to pick that up.
Makes sense.....it was part of an estate that hadn't been taxed already; I think this means technically 'you' didn't pay the taxes, the estate effectively did, and your portion of the inheritance is only after those pension taxes are paid. Essentially, the money in that pension was never taxed, and it is when it is withdrawn. In your case, it is being withdrawn after the pension owner died, so there are taxes that have to be paid on that element of the estate before they can be distributed. At least, that's how I'm understanding it here.
And another conservative just can't help displaying his ignorance to make a political jab.
Conservative? I voted for Obama in 08 and Gary Johnson in 12. I think the Republicans are awful on several social issues.
I just happen to think people shouldn't be slaves to taxes and can put their own money to use better than Uncle Sam can. So chill, even though you want my money I don't want yours.
If it's been probated, the taxes have been paid. For you it is all yours. Just think warmly of gramma from here on out.
You were probably listed as a beneficiary on that pension. That means the pension passes to you and not the value of the pension. You should have been given the opportunity to keep it as a pension(as CeMar pointed out, deferred income) or cash it out whereby it's treated as income. I am not certain about all of that, but it might be a question to ask the lawyer for the estate.
There will be no income tax consequences for you personally (federal or state). Its not reported on your income tax return so no income tax is due on it.
Also, the decedent's estate would have paid all required federal estate (only if over ~$5 million) or Iowa inheritance taxes already so this is your money to do whatever the eff you want.
Also, the decedent's estate would have paid all required federal estate (only if over ~$5 million) or Iowa inheritance taxes already so this is your money to do whatever the eff you want.
Estates still have to go thru probate to determine what taxes are due, etc......Perhaps there is a minimal estate size that is exempt, I can't say for sure. And Stud...unfortunately lawyers and "mumbo jumbo" are usually involved in some aspect of life.
When people say "estate" the mind tends to go to flush bank accounts, vacation homes and fleets of cars. If I die with $8 in my pocket and a backpack of clothes, I have an "estate"....it's just not one that's going to take much to deal with.
it's already been taxed a handuful of times and ways but liberals will still want their share somehow. they are always so generous with other people's money, ie tax money. good for them for stealing from working people to give to whoever the hell they deem is worthy of their "generosity."
this post is so full of right-wing crap, it's ridiculous. Most folks have none of the issues you piss and moan about...Those who do have been deferring their taxes their whole lives and at their death, the taxes are due.
Assuming the estate was set up properly and you're receiving cash this is the correct answer. There are some weird things that come up with estates but generally it's pretty simple and im sure youre fine. Nothing is more exciting for a tax accountant than death and divorce.
