My father recently passed away. My siblings and I are trying to take care of our inheritance. The big questions I have are: what is the federal tax withholding on inheritance, does CA have a state tax on inheritance, and how do all these things get managed? I want to know what percentage of everything is going to be taxed before I do anything else in regards to distribution of funds. Can anyone help?

Missionary:

I can advise you, but I need to know how large is your father's estate.

The first $1.5 million is exempt from federal estate taxes.

There is no California inheritance tax, but there are estate/death taxes that are equal to the credit allowed under the federal estate tax for state death taxes.

In other words, California death tax is driven by the federal estate tax. Whatever you pay to California, you get a dollar-for-dollar credit on the federal estate tax. The $1.5 million dollar exemption applies to the California death/estate tax as well.

If your father's estate is less than $1.5 million, you have no filing requirement for either the federal or California estate taxes.

If the estate is more than $1.5 million, then you need to contact a California tax professional who has experience in both state and federal estate taxes. Do not do this yourself! It is not a field for amateurs.

Does the 1.5 million dollar California Inheritance tax exemption also apply when there is property involved?

Yes it does. It applies to all assets of the estate, be they cash, equities, real property, whatever.

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Originally Posted by missionary

My father recently passed away. My siblings and I are trying to take care of our inheritance. The big questions I have are: what is the federal tax withholding on inheritance, does CA have a state tax on inheritance, and how do all these things get managed? I want to know what percentage of everything is going to be taxed before I do anything else in regards to distribution of funds. Can anyone help?

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When my siblings and I receive our inheritance in Ca are we going to be taxed??
I know that NY inheritance tax is 40%...

That is sear robbery!

Thanks

Jj

What I found out about my situation (in California) was that California has not inheritance tax. It has been a couple of years since I looked into it so there may have been a change or there may be a maximum on no tax. My situation was just under one million. Hope this helps. Bob

California has NO inheritance tax?

Or did you mean that Calfornia's inheritance tax did not apply in your case due to the size of your estate?

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Originally Posted by AtlantaTaxExpert

California has NO inheritance tax??

Or did you mean that Calfornia's inheritance tax did not apply in your case due to the size of your estate??

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According to the website for the California Tax Service Center (California Tax Information Center - Special Circumstances

"California does not have a gift tax or an inheritance tax. However, California does still impose a death tax equal to the federal credit for state death taxes. This is commonly called the "pick-up tax".

In addition, the California Inheritance Tax Law provides for a generation-skipping transfer tax equal to the allowable credit amount under the federal Generation-Skipping Transfer Tax provisions. For more information, see Tax Information on the California State Controller's website."

Suggest that you look at the posting dates before answering. THREE YEARS is a bit long to wait for an answer,

What about inheritance that is coming from annuities and ira's? In california- is it concedered income or seprate?

Princess - Please do not double post the same question. You asked this question and have an answer here: https://www.askmehelpdesk.com/taxes/...ia-471687.html

Redundant question; already answered rather well by MukatA.