After a loved one passes, you may get an inheritance in the form of money, property, and other assets. Even though the gains aren’t calculated as income, you may still be required to pay taxes. Currently, there are six states which require you to pay a state inheritance tax including Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania (according to TurboTax). This means that if you live in any of these states, you could be required to pay.
Many states offer exemptions to beneficiaries based on the relation to the deceased. For example, spouses are exempt from paying inheritance taxes in all six states. Keep in mind that the laws can change, and you may find that your state repealed the inheritance tax—meaning you don’t owe anything. To be sure, contact your state’s revenue office or a tax professional.
Have more questions? See more answers from Alot.