Experts please help
This query is : Resolved
19 October 2013
Someone told me that in USA there is a Inheritance property tax? does it means that after the death of parents, son has to pay 30-40% tax in order to live in his parental property? what if son is a college going student how will he pay 30-40% tax in order live in his parents house? i also read somewhere that indian government is also planning to apply this in India.
20 October 2013
You need to consult a taxexpert of USA to get consultancy on their tax laws
20 October 2013
I read it in newspaper http://articles.economictimes.indiatimes.com/2012-11-09/news/34994180_1_inheritance-tax-stable-tax-regime-wealth-tax
24 July 2024
In the United States, there is indeed a concept of an inheritance tax, but it's important to clarify the details:
### Inheritance Tax vs. Estate Tax
1. **Estate Tax**: This tax is levied on the estate (total value of assets and property) of a deceased person before it is distributed to heirs. The estate tax rate can range up to 40% at the federal level, depending on the value of the estate. However, estates worth below a certain threshold (which is quite high) are exempt from federal estate tax.
2. **Inheritance Tax**: This tax is imposed on the beneficiaries (heirs) who inherit property or assets from a deceased person. Unlike estate tax, which is paid by the estate itself, inheritance tax is paid by the person receiving the inheritance. Not all states in the US have an inheritance tax; some have estate tax, some have both, and some have neither.
### Key Points:
- **Thresholds**: In both estate tax and inheritance tax systems, there are thresholds below which no tax is due. For example, in estate tax, the federal government exempts estates below a certain threshold (as of 2024, it's over $12 million per individual).
- **Impact on Heirs**: Heirs typically do not need to pay taxes immediately upon inheriting property. They may have a period to settle any tax liability, and often, taxes can be paid in installments or through other arrangements.
### Indian Context:
- **Estate Planning**: In India, while there's no estate tax currently, inheritance tax has been proposed and debated at various times. It's important to note that any change to tax policy in India would require legislative action and would undergo public and parliamentary scrutiny.
- **Impact on Heirs**: If an inheritance tax were to be introduced in India in the future, similar considerations would apply regarding thresholds, exemptions, and the practical implications for heirs.
### Practical Considerations:
- **Payment Arrangements**: In both the US and potentially in India (if introduced), provisions are usually made for heirs to pay taxes over time, especially when the estate includes illiquid assets like real estate.
- **Consultation**: Individuals affected by estate or inheritance tax should consult with tax professionals and estate planners to understand their obligations and plan accordingly. There are often strategies available to minimize tax liabilities through trusts, gifting, and other mechanisms.
In summary, while inheritance tax exists in some form in the US, it's not as straightforward as a 30-40% immediate tax on inheriting property. Thresholds and exemptions play a significant role, and the same principles would apply if such a tax were introduced in India. It's essential to stay informed about tax laws and seek professional advice for specific situations.
### Inheritance Tax vs. Estate Tax
1. **Estate Tax**: This tax is levied on the estate (total value of assets and property) of a deceased person before it is distributed to heirs. The estate tax rate can range up to 40% at the federal level, depending on the value of the estate. However, estates worth below a certain threshold (which is quite high) are exempt from federal estate tax.
2. **Inheritance Tax**: This tax is imposed on the beneficiaries (heirs) who inherit property or assets from a deceased person. Unlike estate tax, which is paid by the estate itself, inheritance tax is paid by the person receiving the inheritance. Not all states in the US have an inheritance tax; some have estate tax, some have both, and some have neither.
### Key Points:
- **Thresholds**: In both estate tax and inheritance tax systems, there are thresholds below which no tax is due. For example, in estate tax, the federal government exempts estates below a certain threshold (as of 2024, it's over $12 million per individual).
- **Impact on Heirs**: Heirs typically do not need to pay taxes immediately upon inheriting property. They may have a period to settle any tax liability, and often, taxes can be paid in installments or through other arrangements.
### Indian Context:
- **Estate Planning**: In India, while there's no estate tax currently, inheritance tax has been proposed and debated at various times. It's important to note that any change to tax policy in India would require legislative action and would undergo public and parliamentary scrutiny.
- **Impact on Heirs**: If an inheritance tax were to be introduced in India in the future, similar considerations would apply regarding thresholds, exemptions, and the practical implications for heirs.
### Practical Considerations:
- **Payment Arrangements**: In both the US and potentially in India (if introduced), provisions are usually made for heirs to pay taxes over time, especially when the estate includes illiquid assets like real estate.
- **Consultation**: Individuals affected by estate or inheritance tax should consult with tax professionals and estate planners to understand their obligations and plan accordingly. There are often strategies available to minimize tax liabilities through trusts, gifting, and other mechanisms.
In summary, while inheritance tax exists in some form in the US, it's not as straightforward as a 30-40% immediate tax on inheriting property. Thresholds and exemptions play a significant role, and the same principles would apply if such a tax were introduced in India. It's essential to stay informed about tax laws and seek professional advice for specific situations.
24 July 2024
In the United States, there is indeed a concept of an inheritance tax, but it's important to clarify the details:
### Inheritance Tax vs. Estate Tax
1. **Estate Tax**: This tax is levied on the estate (total value of assets and property) of a deceased person before it is distributed to heirs. The estate tax rate can range up to 40% at the federal level, depending on the value of the estate. However, estates worth below a certain threshold (which is quite high) are exempt from federal estate tax.
2. **Inheritance Tax**: This tax is imposed on the beneficiaries (heirs) who inherit property or assets from a deceased person. Unlike estate tax, which is paid by the estate itself, inheritance tax is paid by the person receiving the inheritance. Not all states in the US have an inheritance tax; some have estate tax, some have both, and some have neither.
### Key Points:
- **Thresholds**: In both estate tax and inheritance tax systems, there are thresholds below which no tax is due. For example, in estate tax, the federal government exempts estates below a certain threshold (as of 2024, it's over $12 million per individual).
- **Impact on Heirs**: Heirs typically do not need to pay taxes immediately upon inheriting property. They may have a period to settle any tax liability, and often, taxes can be paid in installments or through other arrangements.
### Indian Context:
- **Estate Planning**: In India, while there's no estate tax currently, inheritance tax has been proposed and debated at various times. It's important to note that any change to tax policy in India would require legislative action and would undergo public and parliamentary scrutiny.
- **Impact on Heirs**: If an inheritance tax were to be introduced in India in the future, similar considerations would apply regarding thresholds, exemptions, and the practical implications for heirs.
### Practical Considerations:
- **Payment Arrangements**: In both the US and potentially in India (if introduced), provisions are usually made for heirs to pay taxes over time, especially when the estate includes illiquid assets like real estate.
- **Consultation**: Individuals affected by estate or inheritance tax should consult with tax professionals and estate planners to understand their obligations and plan accordingly. There are often strategies available to minimize tax liabilities through trusts, gifting, and other mechanisms.
In summary, while inheritance tax exists in some form in the US, it's not as straightforward as a 30-40% immediate tax on inheriting property. Thresholds and exemptions play a significant role, and the same principles would apply if such a tax were introduced in India. It's essential to stay informed about tax laws and seek professional advice for specific situations.
### Inheritance Tax vs. Estate Tax
1. **Estate Tax**: This tax is levied on the estate (total value of assets and property) of a deceased person before it is distributed to heirs. The estate tax rate can range up to 40% at the federal level, depending on the value of the estate. However, estates worth below a certain threshold (which is quite high) are exempt from federal estate tax.
2. **Inheritance Tax**: This tax is imposed on the beneficiaries (heirs) who inherit property or assets from a deceased person. Unlike estate tax, which is paid by the estate itself, inheritance tax is paid by the person receiving the inheritance. Not all states in the US have an inheritance tax; some have estate tax, some have both, and some have neither.
### Key Points:
- **Thresholds**: In both estate tax and inheritance tax systems, there are thresholds below which no tax is due. For example, in estate tax, the federal government exempts estates below a certain threshold (as of 2024, it's over $12 million per individual).
- **Impact on Heirs**: Heirs typically do not need to pay taxes immediately upon inheriting property. They may have a period to settle any tax liability, and often, taxes can be paid in installments or through other arrangements.
### Indian Context:
- **Estate Planning**: In India, while there's no estate tax currently, inheritance tax has been proposed and debated at various times. It's important to note that any change to tax policy in India would require legislative action and would undergo public and parliamentary scrutiny.
- **Impact on Heirs**: If an inheritance tax were to be introduced in India in the future, similar considerations would apply regarding thresholds, exemptions, and the practical implications for heirs.
### Practical Considerations:
- **Payment Arrangements**: In both the US and potentially in India (if introduced), provisions are usually made for heirs to pay taxes over time, especially when the estate includes illiquid assets like real estate.
- **Consultation**: Individuals affected by estate or inheritance tax should consult with tax professionals and estate planners to understand their obligations and plan accordingly. There are often strategies available to minimize tax liabilities through trusts, gifting, and other mechanisms.
In summary, while inheritance tax exists in some form in the US, it's not as straightforward as a 30-40% immediate tax on inheriting property. Thresholds and exemptions play a significant role, and the same principles would apply if such a tax were introduced in India. It's essential to stay informed about tax laws and seek professional advice for specific situations.
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