Buffalo, NY asked in Tax Law for New York

Q: A neighbor of mine has inherited $1.5 Million. Will she have to pay income tax. What percentage?

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1 Lawyer Answer

Matthew Frank Medaglia

Answered
  • Tax Law Lawyer
  • Staten Island, NY
  • Licensed in New York

A: No, inheritance in not considered income for income tax purposes. If the inheritance is an Ira or some other instrument with special tax characteristics, then there may be tax consequences to that. Also if there are capital gains after your neighbor gets the assets, those gains are taxable on the sale of the assets. As for other taxes, it depends a bit on what state the decedent was in, 6 states have an inheritance tax that will be deducted before your neighbor gets the check. The federal government, and many states, including NY, also have an estate tax. There is not enough info to say if the estate is over the federal exemption, it would be over NY's. That would be paid by the estate however, not the recipient of the bequest.

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