Paying Tax On Inheritance

Michael Ruger - Greenbush Financial Group

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Not all assets are treated the same tax wise when you inherit them. It’s important to know what the tax rules are and the distribution options that are available to you as a beneficiary of an estate. In this video we will cover the tax treatment on inheriting a:
• House
• Retirements Accounts
• Stock & Mutual Funds
• Life Insurance
• Annuities
• Trust Assets
We will also cover the:
• Distribution options available to spouse and non-spouse beneficiaries of retirement accounts
• Federal Estate Tax Limits
• Biden’s Proposed Changes To The Estate Tax Rules
VIDEO LINKS:
Inheriting a House: • Do I Have to Pay Tax O...
Non-Spouse IRA'S: • How Do Inherited IRA's...
Spousal IRA's: • How Do Spouse Inherite...
Contact Michael Ruger with Questions: 518-477-6686 or mruger@greenbushfinancial.com
Visit our website: www.greenbushfinancial.com/
Subscribe to our channel for more financial planning tips: / @greenbushfinancialgroup
#inheritance #beneficiary #estateplanning #greenbushfinancial

Опубликовано:

27 июл 2024

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Комментарии : 90

@samjefferson5540 Год назад

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@ukuranashkoy8270 Год назад

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@Geminis3505 3 года назад

Thank you so much for this amazing video!!

@ninmoney8228 3 года назад

The best simple on this complex top.

@mbtadhl 5 месяцев назад

Great vid !

@jo-annreynolds9852 2 года назад

Great job

@NikkiJackson-vx1qs Год назад

Thank you so much.

@SuperMarioVending 2 года назад

So much good info here! Thanks very much.

@Tionaintown876 3 года назад

So much useful information!

@AC-ob7ke Год назад

With regard to the step-up cost basis six-month alternate valuation date: Must a federal estate (inheritance) tax return be filed to qualify for that option? Thanks...

@mohamadtaiem6164 Год назад

Thank you for your answer I live in Orlando Florida I have general question about a husband and wife non resident with houses as investors here in Florida both names on the titles of the houses, the husband passed away last November any taxes applicable to the wife even though her name on the titles? I will appreciate your opinion in the matter

@signedelacroix7213 2 года назад

Do you have an updated video on that?

@maryannsinopoli1751 2 года назад

What when inherit stock hdqtrs in Canada and I get taxed USA and Canada deductions from dividend. I get USA refund as low social security income but no filing in Canada. How can I get that &&& also I do not get treaty tax percentage but pay full plus more than 30 percent.

@sethagreen Год назад

I think the answer is obvious, but the gov seems to profit of anything and everything so i cant be sure. Question is, what if the property decreases in value after its inherited? Can it be claimed as a loss on my taxes? Also, your presenting the same information that most are saying. Many ranches in my area are forced to sell after being inherited because the children cant afford what's commonly called inheritance tax. I can't find any information on that.

@mihandsplitters705 3 года назад

I was wondering if the state inheritance tax is based on where I live or where my children live? We are in Michigan and one of my children live in Pennsylvania. Thank you

@greenbushfinancialgroup 3 года назад

The estate tax laws are based on where you live. But if you children are receiving distributions from inherited IRA it’s taxed to them based on the tax laws within their state of domicile (Comment is for education. Not advice)

@edennis8578 2 года назад

Yes, the tax on the inheritance, like real estate and bank accounts, is based on the state where you live, not the heirs. I just went through this. My brothers live in DC and Missouri but I live in Iowa where our aunt died. We all had to pay Iowa tax.

@CatCaregiver-ie1ej 2 года назад

I inherited about 30K from 1/6 the sale of my mother's house (Louisiana Law - if you do all the paperwork ahead of time (we did) The surviving spouse (my mother) gets 1/2 of the sale and the children of the deceased parent (my dad) split the other half - 3 kids - so we each got 1/6. None of this should be taxable at all, but my question is, should I or is there a way to report this as non-taxable income, just so the IRS knows where I got that mysterious 30K from? (assuming they poke around in people's savings accounts...which I assume they do).

@mundo30000 2 года назад

Did you get to find out the answer to your question? I’m curious

@greenbushfinancialgroup Год назад

Disclosure, I'm not an accountant but if you do not have a capital gain in the property that you inherited, you may not have to report it on your tax return because there is essentially no additional taxable income to report. The only situation where the $30K in cash deposited to your checking account could come into question is if you were ever audited by the IRS and they request bank statements. If they question you about the $30K deposit, you have a legit explanation that you inherited the house, sold it, and there was neither a capital gain nor loss on the property due to your step-up in cost basis. You just have to be comfortable that the house did not appreciate in value between your mother's date of death and when you sold the house. Any gain in value between the death of death and when the house is sold is considered a reportable taxable gain. (Comment is for education. Not advice)

@wideawake333 Год назад

How does the stepup work if your patents built the home? Like being able to prove what it cost vs a partial cash/mortgage build.

@greenbushfinancialgroup Год назад

If you are entitled to receive the step up in cost basis, you no longer have to worry about what your parents paid for the house or what they built it for because if you inherit it through their estate, and receive the step up, your new cost basis is the fair market value as of the date of death. (Comment is for education. Not advice)

@wideawake333 Год назад

@@greenbushfinancialgroup okay thank you

@sahar1usa Год назад

what about if an executor sold the house which was abroad and i receive my share of inheritance ? it is inheritance money but coming from abroad, do i have to provide paperwork to bank IRS? prior to receive or afterwards? can i receive it in cash ?

@sethagreen Год назад

I don't know what the tax situation would be in your case, but I do know that you pretty much have to report any income to the IRS regardless where it came from. Cash is often untraceable depending on how the person giving it to you handles it. There's people who use cash to evade paying taxes on it which is illegal. The government taxes every possible thing they can get their dirty hands on.

@danutamaj2115 Год назад

If you inherited COLI key employee /life insurance do you need to pay tax on proceeds ?I inherited substantial amount , employer is a beneficiary and I as surviving spouse got bulk check. There are different opinions about taxation related to COLI

@greenbushfinancialgroup Год назад

It depends on who was making the premium payments. If the key employee was making premium payments with after tax dollars then typically the life insurance is received by the beneficiaries tax-free. If the company was makling premium payments on behalf of the key employee, the life insurance proceeds may be taxable to the beneficiary of the policy. (Comment is for education. Not advice)

@flyinbryanfpv Год назад

Excellent info but the audio is rough... just fyi.

@JanetDiaz6152 2 года назад

What can i do when a sibling moves into a 1st floor apt of a 2 family home and doesn't want to pay rent ,not even utilities and just basically living rent free. Even though she owns 1 /5 of the home. The will disappeared , so we just got my nephew as the fudicary from surrogate court . Now we decided not to sell and put deed in all five sibling names .Also how can we protect each other from neither taking a loan or taking money from estae account ?

@edennis8578 2 года назад

You need to talk to a lawyer in your state. Good luck because it sounds like you need it.

@christopherdoran3608 2 года назад

What if the house/asset is in a trust?

@greenbushfinancialgroup 2 года назад

It depends on the terms of the trust, whether or not the assets in the trust would received a step up. (Comment is for education. Not advice)

@markl9839 Год назад

great video, I inherited a TOD account and received a cashout distribution. I have been told I will receive a 1099 for that distribution. Doesnt that mean I will have to report the whole amount as income and have to pay federal and state taxes on it as well? Thanks in advance

@greenbushfinancialgroup Год назад

If it a TOD account and you were the primary beneficiary of the account, in many cases, you would have received a step up in cost basis when the person passed away, which means your cost basis is the fair market value of the assets in the account as of the date of death. So you would only owe tax if there was appreciation in the value of the account between their date of death, and when you took the full cash distribution from the account. You should double check to make sure the investment firm that holds the account provided you with the step up and cost basis before processing your distribution. You could still receive a 1099 form for the dividends and interest generated by the account.(Comment is for education. Not advice)

@noel7777noel Год назад

@@greenbushfinancialgroup It you can inherit money you should also inherit debt. And no one files bankruptcy protection. Why should we socialism the loses. And privatizing the gains Why is family money only if it is not debt?

@michaelpeebles4089 8 месяцев назад

@@noel7777noel I believe all debts have to be paid first before the estate is transferred.

@rodf1021 3 месяца назад

For a house how do you know the gain/loss between the time of death and the actual sale date?

@WilliamMurphy-uv9pm 2 месяца назад

After the death, someone MUST list all assets, including their value at the date of death. That is primarily to determine if estate inheritance taxes apply to the size of the estate in question. But it forces you to get a fair value of everything including real property. In the case of real property, my GUESS is that you could get a valuation from a realtor or use your property tax assessment for a rough valuation. A probate lawyer should be consulted before trying to do all this yourself. As to the value at date of the property sale, that comes from the sale price less all the sale expenses. That's pretty easy to determine.

@carolynharvey8963 2 года назад

I am in New York Brooklyn Andy estate administrator how does taxes work do I have to do state taxes and federal because it's only $70,000

@edennis8578 2 года назад

Talk to a cpa in your state. My husband and I did that in January and he only charged us $100.

@Dushtacat 3 года назад

How are IRA's handled as far as estate tax is concerned? If I include the IRA as an asset in my taxable estate, I am also including the embedded income taxes in the IRA. In that case I'm paying estate tax on income taxes. Am I missing something?

@greenbushfinancialgroup 3 года назад

IRA’s count toward the estate exemption limit. If all you have in your estate are huge pre-tax retirement accounts, the estate would get hit with the estate taxes, and then the beneficiary has to pay tax on the distributions from the IRA. Obviously not a good situation. Please check with your accountant on this but I think there may be a provision where the beneficiary that receives the IRA receives a tax deduction for the amount to tax that was paid by the estate. If there are any CPA’s out there that are familiar with how this works, please leave a comment below. If you think you might be in this situation, strongly encourage advanced estate planning where assets have intentionally been set aside outside of the estate to pay the anticipated tax liability. This could end up being an issue for more people if they lower the estate tax exemption limits in the future. (Comment is for education. Not advice)

@Corkfish1 2 года назад

@@greenbushfinancialgroup correct. Its called estate tax deduction for IRD ( income in respect of decedent). You generally only see this for very large estates now that the estate exemption is so large.

@AttorneyFredLong 7 месяцев назад

In states with inheritance tax, like PA for example, these principles apply to all estates with an IRA, unless the decedent was 59 1/2 or younger at the time of death, in which case the IRA is exempt from PA inheritance tax.

@TheK9Shepherd 11 месяцев назад

Question about inheriting stocks and the cost basis. My wife's brother passed away in 2022. He had a single stock with a brokerage and she was the sole beneficiary (100%). Now, I understand that the cost basis is what the stock was on the date of his death. My question is if she didn't get legal control of that stock until 3 months later until 2023, why can't that be the cost basis of the stock? We had to go through paperwork and had difficulty getting a hold of someone at the brokerage. So she never got legal control of that stock until 3 months later (when she actually took possession) Now as you can probably sermise, it benefits us to have the cost basis when we received the control of the stock 3 months later because it increased in value. So when we sold in 2023, the delta was .75 cents per share. As opposed to a delta of $2.50 per share based on the date of his death. So is is possible to articulate that our cost basis was 3 months later as opposed to the date of his death? Thanks

@greenbushfinancialgroup 11 месяцев назад

The step in cost basis is always the date of death value regardless of when the beneficiary receives control of the stock. The probate process can be very lengthy, and it varies greatly state by state, individual by individual, we have seen some estates takes years to process. With so much variance, it could easily be gamed by beneficiaries of the estate to delay receipt of the assets to further push out the date of the step up in cost basis. While it might not be ideal, this is probably why they use the uniform date of death value. This is another reason why, for brokerage accounts, people should register it with a TOD (transfer on death) because then it skips the probate process and goes directly to the beneficiaries of the account. (Comment is for education. Not advice)

@crazykid-hd5kl 2 года назад

what happens if you inherited a roth that is not more then 5 years old?

@greenbushfinancialgroup 2 года назад

You would have to continue to hold the Roth IRA for the remainder of the 5 year holding period but you receive credit for the time that the decedent held it in their Roth IRA. (Comment is for education. Not advice)

@briceking669 6 дней назад

Do inherited rental properties also follow the step up basis?

@greenbushfinancialgroup 5 дней назад

As long as they were owned by the decedent when they passed or the decedent owned the LLC that owned the properties, then yes (comment for education. Not advice) #gfg

@goaretebarreto5154 4 месяца назад

If you receive $10,000 in the checking account, do you have to pay taxes on it?

@greenbushfinancialgroup 4 месяца назад

In most cases, when you inherit a balance in a checking account, no tax is owed by the recipient since it’s an after tax asset. (The comment is for education. Not advice)

@tpmartinez 2 года назад

What if the HOUSE that is being left to a child is sold by the parent three months before parent dies, are there tax consequences like Capital gains tax the estate would own? If so, it the house was sold after the death of parent, no taxes are owed due to the Step Up provision?

@greenbushfinancialgroup 2 года назад

If they sold the house before they passed and it was their primary residence, they may still qualify for the $250k gain exclusion for a single filer. So unless there was a really large unrealized gain in the house, the kids may not have to pay tax either way. But yes, if the house is sold after they pass away, the step up in basis would apply thus eliminating the taxable gain in the house (Comment is for education. Not advice)

@WilliamMurphy-uv9pm 2 месяца назад

The deceased parent's final (after death) tax return would likely be used to report the sale of the property. Property sold before death does not get the step-up at death because it was sold BEFORE death.

@aimeecatena6207 2 года назад

"Could've SWORN TAXATION already APPLIED TO THOSE LEAVING WEALTH; now you Want a SECOND TAXATION!" DEFINITELY THE PRODUCT AND DESIGN OF A "TRUST FUND BABY"

@stephenfox6090 Год назад

Beneficiary’s do not pay taxes trust pay taxes. I am a private banker with a ucc one filing with treasury

@karenjohnson9855 Год назад

What happens if they bought the house for $30,000. And now the house is worth $1,400,000.?

@greenbushfinancialgroup Год назад

If they still owned the house when they passed, the beneficiaries get the full step up in basis which means no tax when they sell the $1.4M house. (assuming they are under the aggregate estate tax limit) this is why it’s such a powerful planning tool. (Comment is for education. Not advice)

@adventureswithbrownie8678 Год назад

I’m getting a $1,000 a month from a state pension. Dad died and made me the beneficiary. As of right now I’m not paying any tax on the 1,000 a month but when I do my taxes, What’s going to happen???? I live in California. That’s my question. How much tax??

@greenbushfinancialgroup Год назад

The amount of tax that will pay on the state pension will depend on any other income that you already have combined with the pension income. You would basically take all of your income (including the $1K per month), which would be your total gross income, there are lots of tax calculators online that can show you a basic estimated tax liability. You can look at your paycheck and see what your fed and state tax withholdings are YTD and determine how much you may be underpaid. (Comment is for education. Not advice)

@adventureswithbrownie8678 Год назад

Thank you and thank you for responding

@Goat4964 Год назад

I sold my dads home that I inherited I paid tax and interest can I claim these fees

@greenbushfinancialgroup Год назад

If you are referring to income taxes paid, you can’t claim those tax payments as deductions (Comment is for education. Not advice)

@Goat4964 Год назад

@@greenbushfinancialgroup no I was charged. state, local, and county taxes as well as interest. Can I claim this when I file my tax return

@patrickkamins9765 2 года назад

My brother and I are beneficiaries of my sisters home. She passed a little more than 2 years ago. During probate we spent $ fixing up the house and paying off the mortgage and recently sold the property. We do not have an appraisal from 2 years ago but did research on comparable properties and her home sold for much more than it was worth 2 years ago. Will the $ we spent on her home reduce the "step-up" capital gains tax?

@greenbushfinancialgroup 2 года назад

You would receive the step up as of the death of death. Any capital improvements made at the property after your sister passed would be added to your cost basis. If the house has appreciated in value since your sister passed away this would decrease the amount appreciation in the house subject to capital gains tax. (Comment is for education. Not advice)

@patrickkamins9765 2 года назад

@@greenbushfinancialgroup Thanks very much...one more question. Is paying off the mortgage considered a capitol improvement and would this decrease the appreciation?

@fearlessbeast5456 2 года назад

Hi, I am from Nepal, I got email from Elizabeth williams from USA. She is suffering cancer and in last stage . Doctor said she will be no more in three month . She and her husband deposited some money in ecab bank and wants to give for charity to poor people, window women etc. But now the bank asked me I will be secondary beneficiary and for the inheritance fund transfer I have to pay 865 dollor for clearance certificate or change ownership certificate for us ministry probate courte . I don't know exactly what they are talking about ? Is scam or truth ? They said the money is in suspense account in ecab bank (Eastern Caribbean Amalgamated Bank).

@Dad-979 2 года назад

Scam

@victorguerra3498 Год назад

130,000 in my 401K, turned 70 retired and closed my 401 K, Had to pay 23 Thousand for tax on it, the 109 thousand I received... I had to pay taxes on it cause they the government said it was earn income for that year. WTF I see why people just gave up and are homeless. why save money, better to spend it then pay taxes on it. My girl work lots of over time, when taxes came around she owed more money in taxes, why work over time, spend the time at the beach.

@ThatSilverDude Год назад

what the actual fuck,, we are being robbed. Companies used to have pensions. WHY DID SOCIETY LET THEM STOP THAT

@classicsurvivor 8 месяцев назад

Let’s go Brandon

@user-fz8tj5sr1l 9 месяцев назад

What if u li e with your dad and payed rent and he die 10:59

@raymondlanier1112 5 месяцев назад

way to difficult >taxation is theft

@WilliamMurphy-uv9pm 2 месяца назад

So is failure to pay lawful taxes. Taxation is not legal theft. You got something for your taxes whether it was roads, services, or whatever. You just never realized it. It costs a lot to run efficient government and even more to run inefficient government. You, the taxpayer, are stuck with those costs, through taxation, WHETHER YOU LIKE IT OR NOT.

@raymondlanier1112 2 месяца назад

@@WilliamMurphy-uv9pm sending money to iran , ukraine ,south america africa and many other countries is not benefitting me or any american . no where in the costitution does it say i have to pay taxes .it is 100% theft