When people in Florida receive an inheritance, they commonly have questions about the kinds of taxes they might have to pay. After all, if you’ve recently received a lot of money or property, won’t the state of Florida or the federal government want to take part of that in the form of taxes?
The questions surrounding inheritances and taxes can be a little complicated, and sometimes the answers are confusing. To try to dispel some of this potential confusion, today we are going to take a look at some basic questions about paying taxes on inheritances in Florida. As with any tax or inheritance question, it’s vital that you receive personalized information from a tax or legal professional whenever you need advice. But, until you call us, here is some basic information you should understand.
Do I have to pay estate taxes on my inheritance?
An estate tax is a specific kind of tax that applies to the total value of the property left behind by a deceased person. This property, when taken together, is referred to as an estate. An estate tax, therefore, is a tax taken from, or applied to, that property.
With the estate tax, it is not the individuals who receive an inheritance who are responsible for paying. Instead, that responsibility falls to the administrator of the estate. Once the administrator determines whether any estate taxes are applicable, he or she is responsible for using estate property to pay the appropriate tax amount. So, you, as an individual inheritor, will never be responsible for paying an estate tax.
As with all taxes, there are both state and federal estate taxes that can apply. The federal estate tax applies to all the states in the country, but only those that are over a specific dollar amount. Your attorney will explain to you whether you need to worry about the federal estate tax applying to your estate. As far as a state estate tax goes, Florida does not have a state-level estate tax.
Do I have to pay inheritance taxes?
An inheritance tax is one that applies to the property individuals receive as an inheritance. As with other tax laws, there can be both state and federal inheritance taxes. Currently, there is no federal inheritance tax, and there is no Florida inheritance tax.
Do I have to pay income taxes on my inherent?
If you received an inheritance that provides you with income, such as interest earned from an investment, or rents earned from a rental property, you will have to pay income taxes on that income. However, you do not have to pay taxes on the value of the property received as an inheritance.