Legal Question in Tax Law in California
tax on inheritance, etc....
If you receive an inheritance, part is an annuity from a life insurance policy and part is from the estate, do you have to pay taxes on either of the two or both? If you do, when does the IRS learn that you have received the money, is it when you claim your taxes at the end of the year or when you get the money? If it is when you get the money, can the IRS stop you from getting the money if you owe anything, such as a defaulted student loan, etc...
1 Answer from Attorneys
Re: tax on inheritance, etc....
More detail is needed for a definitive answer. Here are some guidelines. For people who die in 2000, up to $675,000 may pass tax free to all of the beneficiaries. An estate tax return is due 9 months from the date of death. Life insurance proceeds are included in the estate unless the decedent did not own or control the policy at the time of death. Lastly, someone will need to file a final income tax return on behalf of the estate. You need a lawyer and accountant to help you with this.
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