Legal Question in Tax Law in Texas

Is there an inheritance tax on

Wanted to know more about the inheritance tax.

We recently sold my grandmothers house and property so

the money is be divided up and submitted out to the surviving family members. Can you tell me if there is an inheritance tax on the money which will be received? If so, is there a calculation method used to determine how much tax will be applied? Is it applied only if the sum of money is a certain amount or more? Would like to know how to calculate whether or not we will be taxed on that money and how much will be given to Uncle Sam.

Thanks,

Derek


Asked on 3/03/03, 10:46 pm

1 Answer from Attorneys
Robert Restivo Restivo Law Firm

Re: Is there an inheritance tax on

Howdy:

The estate tax doesn't apply to the beneficiaries of a will or a trust. Rather, it is assessed against the estate when the final tax returns are prepared.

If no estate tax is due, then you need not file a return ... but, you still need to file a final tax return if required. But, be sure to prepare an estate tax return and keep for your records in case the estate is audited.

Assuming the executor properly filed the returns before distributing the estate, any amount you receive as a beneficiary is tax free.

If you received an interest in real property, you get a stepped up tax basis. So, regardless of the amount paid by your grandmother, or the "book value" if it was an investment, when you sell it, the cost basis you use in computing any gain is the market value at the time of your grandmothers' death.

rkr

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Answered on 3/03/03, 11:03 pm


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