Q: Hello, I will be inheriting $90,000. and live in Montgomery County Maryland will I be paying any MD or Federal taxes?
If the sum total of the Estate is only $90,000, then you are well under state and federal thresholds for estate tax. There are several other fees you may have to handle - probate fees, capital gains, income tax, all depending on the nature of the assets in the estate. Please consult a qualified CPA/attorney to assess your potential liability.
** Please note this is not to be considered legal or tax advice, and creates no attorney-client relationship. **
A: There are two types of taxes: estate taxes and inheritance taxes. Heirs do not pay estate taxes at either the federal or state level out of their distributions; rather, those taxes are paid by the estate based on he gross value of all assets. The first $11.85 million of estate assets is exempt from federal taxation, and the first $5 million is exempt from Maryland taxation. Even if taxes are owed in such a large estate, a specific bequest like $90,000 is generally not reduced by a proportionate share of the estate taxes. There is no federal inheritance tax, but some heirs pay a Maryland state inheritance tax. That is deducted from your inheritance before it is distributed to you, so you do not actually pay it directly, but your distribution is reduced to pay it. However, immediate family members of the deceased (children, siblings, spouse, parents) and direct lineal heirs in both directions, e.g., grandchildren and grandparents, etc., are exempt from having to pay inheritance taxes. The inheritance tax in Maryland is 10% of the distribution owed to you, so if you are not exempt based on your relationship to the deceased, then your payment will be reduced by $9,000.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.