Do you need to pay inheritance tax on an inherited property in Nevada
Two things are sure in life: death and taxes- and both are inevitable. However, you have to know the right tax to pay. Do you have to pay inheritance tax on an inherited property in Nevada is a good question to ask if you ever find yourself in this situation.
It is important so that you do not unknowingly run foul of any law.
Each state has its own tax laws which govern taxation. Under Nevada taxation laws, there is no provision for inheritance and estate taxes.
This means that you do not need to pay inheritance taxes for any property you inherit in Nevada. Nevada is a tax friendly state, its taxation policies are not stringent.
What you should know about Estate Tax and Inheritance Tax
Although estate tax and inheritance tax are similar in that they both apply to the estate of a deceased, there are some differences between these two forms of taxation.
Estate tax is tax levied on the estate of a deceased, however, this tax is paid before the estate is passed on to his heirs or the beneficiaries of his will. This means the tax is deducted before those inheriting it will take over the estate.
Inheritance tax on the other hand also levied on the estate of a deceased is tax paid after the estate has passed on to the heirs of the deceased or the beneficiaries of the deceased will.
It is when the money or estate passes on to the person inheriting that inheritance tax is paid. It is the person who inherits that will pay the inheritance tax.
Under Nevada’s taxation laws, estate tax and inheritance tax is not levied on a deceased estate. These taxes are alien to Nevada’s taxation laws.
The state of Nevada does not collect inheritance tax, however, federal taxation may also affect an inherited property even in Nevada.
When it comes to estate tax, there is a federal tax to be paid. However, it is subject to some exemptions.
The federal estate tax applies to properties worth over ten million dollars, but due to inflation, it is currently pegged at twelve million, six thousand dollars.
The implication of this is that where the estate of a deceased falls below the exemption limit, the federal tax will not be paid, it falls within the exemption range.
For inheritance tax, the exemption limit is also pegged at twelve million, six thousand dollars. Where your inheritance is above this limit, you are subject to a federal inheritance tax.
Taxation of Inherited Property in other States
However, if you inherit a property that is not situated in Nevada, you may be subject to pay inheritance tax if the taxation laws of such a place provide for the payment of inheritance tax.
For instance, in Kentucky, inheritance tax is paid where you inherit a property situated there.
Taxation in Nevada
Nevada generally is a tax-friendly state, there are some incomes that are exempted from tax in Nevada, an example is retirement benefits.
Property tax in Nevada is also quite low, just a meager 0.53 percent is charged. And as you already know, estate and inheritance tax is not charged in Nevada.
Final Words: We Buy Vegas Houses Companies can help with an unwanted property
Paying taxes regularly is a statutory obligation that must be complied with; however, you have to be sure of the taxes you pay so you do not make a mistake.
This is why it is crucial that you make your inquiries or hand over your tax matters to a professional who can help you in this aspect.
You can however circumvent the cumbersome process by selling your inherited property to Alex Buys Vegas Homes.