Receiving Inheritance: Do I Have to Pay Taxes?
As we age or become ill, the term ‘having your affairs in order’ is often used. This means covering numerous facets for after-death planning, to include your property. With comprehensive estate planning, you can control what happens to your assets after you die, along with setting any restrictions if you are leaving an inheritance to younger family members, or perhaps those you worry might be careless with money and property. And you certainly do not need to wait until you are on your deathbed to do so. Estate planning should begin as early as possible, and depending on your situation and assets, you may want to make changes or updates throughout the years.
Careful Planning Means Beneficiaries Are Protected
Along with designating what will go to each person, with careful and responsible planning you should also be able to prepare by estimating any personal taxes that will need to be paid out of the estate as well as taking care of outstanding debts beforehand so they do neat eat up what you are planning to leave to your beneficiaries.
Beneficiaries May Wonder About Any Financial Penalties
If you are a beneficiary, you may have many questions about an impending inheritance, or one that has just been received. Taxes are usually the first question. In Georgia, while there may have been some taxes that were paid out before assets were distributed by the executor of the estate, once it reaches you the inheritance is not considered to be income, and is therefore not taxable. There are no estate taxes or inheritance taxes to be paid in Georgia; however, if you have inherited property from someone living outside of Georgia in one of the states that does require an inheritance tax to be paid, you will be responsible for paying that amount.
Capital Gains May be Owed If You Sell Property or Cash in Stocks/IRAs
Inherited real estate can also be tricky, as you may decide to sell. If you do so for a profit, expect to pay capital gains on the sale. The same usually goes for any stocks or bonds you may sell or receive profits on. If you received an IRA or retirement account in your inheritance, you will also have to pay taxes on any distributions.
Contact Us for Help
If you have questions about your inheritance and any further tax repercussions, consult with a law firm experienced in such matters like Scriber Law Group. Call (404) 939-7562 or contact us online for a free consultation.