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Author: joshj Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Inheritance Taxes Date: 5/14/1997 12:52 PM
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I was wondering what the income tax situation is on an inheritance of approximately $15k. I seem to recall that anything under $600k is tax free. Does anyone have any knowledge of this situation. Thanks in advance. I live in Pennsylvania if that makes a difference.
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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20 of 121061
Subject: Re: Inheritance Taxes Date: 5/22/1997 3:34 PM
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On Wed, 14 May 97 12:52:11 -0600, joshj wrote:
<<

I was wondering what the income tax situation is on an inheritance of approximately $15k. I seem to recall that anything under $600k is tax free. Does anyone have any knowledge of this situation. Thanks in advance. I live in Pennsylvania if that makes a difference.>>

Generally speaking, the recipient of an inheritance receives the inheritance free from any tax. Any estate taxes due on the inheritance will be paid at the estate level, and any funds passed through to you will be done so free from tax.

Additionally, if you receive stock or property via inheritance, your basis (or cost, for tax purposes)is generally the Fair Market Value at the date of death. This is called a "stepped up" basis for tax purposes.

Finally, as you originally state, generally a decedent will have no obligation to file an estate tax return (or pay estate taxes)unless the net value of the estate (the total of all of the assets at FMV less the total of all of the liabilities) exceeds $600,000.

Hope this helps...
TMF Taxes
Roy Lewis

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Author: eeek Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 118302 of 121061
Subject: Re: Inheritance Taxes Date: 4/5/2013 7:29 PM
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You pay inheritance tax amounts over 5 and a half million.

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Author: irasmilo Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 118303 of 121061
Subject: Re: Inheritance Taxes Date: 4/5/2013 9:41 PM
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You pay inheritance tax amounts over 5 and a half million.

I have no idea how you found a 16 year old thread to reply to, but your answer is wrong. Federal Estate Tax kicks in at 5.5million combined lifetime taxable gifts and Estate value. Inheritance taxes are state imposed taxes which are separate from Estate taxes. Both state-level estate taxes and inheritance taxes often kick in at lower amounts ($675K in NJ for Estate Tax, $500 (yes, $500) in NJ for inheritances distributed to Class D beneficiaries [generally no familial relation to the decedent])

Simply put, estate taxes are levied on the value of an estate. Inheritance taxes are levied on the transfe of assets from an estate to certain classes of beneficiaries.

Ira

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