Legal Question in Tax Law in California

Re: inheritance

This question is really situation specific.... I will caution you that the following is in depth and complicated because this is not a simple question to answer. You really should allow a qualified accountant or attorney to review your situation in detail. The following is a general response and might not apply directly to your situation:

First I am assuming that you received this as a devise (meaning gifted from an estate of a deceased through either will, trust or intestacy). I am assuming this was not gifted through some device such as an irrevocable trust set up before the person in question�s death and set to pay out at the same time as their passing.

With regards to inheritance tax: That depends on how large the gross estate was and how the estate was set up. First if the gross estate was less then the applicable exclusion amount (currently 2,000,000) then most likely there is no inheritance (estate) tax due. If the gross estate was over that amount it would depend on how the estate was set up; often trusts or wills direct the trustee/executor to pay the estate tax before gifts are made out of the estate, but this is not a constant and regularly differs.

With regards to capital gains: It depends what the fair market value of the gift was at the time of the testator's (gifting person's) death was. If 100,000 is equal to or below the fair market value of the gift at the time it was made, most likely you will not have to pay capital gains.

Once again I encourage you to seek the aid of a tax professional to review your specific situation. For most people, in the situation you described, there is neither estate tax nor capital gains tax due. But due to the various issues at play, no one will be able to give you a complete answer without more information.