Legal Question in Wills and Trusts in Massachusetts

Re: inheritance

Massachusetts does not have an inheritance tax and neither does the federal government. Any taxes due would be taxed to the estate of the deceased individual.

If you inherited property, you get an automatic step up on cost basis for the property. This means that if you sold the house immediately, and there was no rise or fall in property value, then you get to pocket the proceeds of the real estate capital gains tax free. If you waited to sell the property and let's say it rose in value by $5,000 from the date that you inherited it to the date you sold it, you would have to pay capital gains tax on only $5,000. If the property loss value, you can take a capital loss on your taxes.

Make sure to consult a CPA at the end of the year because it can get complicated and costly if you don't take the proper deductions and make the proper elections.

Re: inheritance

The Estate files the an estate tax return if there is any tax on an inheritance. The money distributed to you should be after tax. I suggest you contact the attorney handling the matter. If you are doing this yourself, a few questions need to be asked relative to MA and the size of the estate. You do not pay a tax on the distribution unless the estate owed the tax and the distribution was incorrectly paid by the estate or failed to pay the tax owed.

However, generally in MA an estate of less than $1,000,000 is not subject to inheritance tax. This is for the entire estate. So if the total estate less debts and administrative costs is less than $1 Million, then there is no tax due from the estate.

If you have more questions, please feel free to contact me.