Certain taxes may be required for a surviving family and Beneficiaries who receive Inheritance during Probate.

Typically, these include, but are not limited to:

Income Tax

• Beneficiaries who receive Assets from the Estate are responsible to pay an associated income tax


• An Executor or Administrator will need to distribute a Schedule K-1 IRS form to anyone Beneficiaries who receives Assets from the Estate


• This form will identify how money was received given during a taxable year

Inheritance Tax
Beneficiaries who inherit money or property may be required to pay Inheritance Tax in the following six states:

• Iowa


• Kentucky


• Maryland


• Nebraska


• New Jersey


• Pennsylvania

Note:

• Beneficiaries are still required to pay Inheritance Tax if the inherited property is in one of those six states but they do not live there


• If the property is inherited by a spouse, domestic partner, or civil union partner, Inheritance Tax payment is not required


• Inheritance Tax may be required for Assets that don't go through Probate (ex: Payable-On-Death property or accounts)


• It is the Executor's responsibility to file the Inheritance Tax return; only one return is filed, regardless of the number of Beneficiaries


• There is no Federal Inheritance Tax

Gift Tax

• Required when money or property is given without receiving anything in return (or less than the value of the item gifted)

It is only required on gifts exceeding $15,000 a year, $30,000 per couple, or over $11.58 million in a full lifetime

• The gift is only per person; if multiple recipients receive upwards of $15,000 then no tax is required


• Gifting more than $15,000 in one year does not necessarily mean the tax is due


• File IRS Form 709 to disclose the gift

Because the Executor may be held personally liable by the IRS for any potential issues during this process, hiring an Estate Accountant is recommended.

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