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    rj914's Avatar
    rj914 Posts: 3, Reputation: 1
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    #1

    Jan 26, 2010, 01:34 PM
    Gift tax
    My wife inherited a cd in the amount of $25K from her uncle when he passed away, is any portion of the 25K excluded from federal tax under the gift tax exemption?

    Thanks,

    Rj914
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Jan 26, 2010, 01:46 PM

    Your wife has no worries with respect to any federal gift tax or estate tax implications due to her inheritance. Any gift tax or estate issues would be handled by the executor of her uncle's estate. Therefore ALL (not just some portion) of what she inherited is untaxed. Although of course any interest earned on the CD after it transferred into her name is taxable.
    rj914's Avatar
    rj914 Posts: 3, Reputation: 1
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    #3

    Jan 26, 2010, 01:48 PM

    Thank you for your quick and very helpful response.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #4

    Jan 26, 2010, 01:52 PM

    You're welcome! One other thing however: you didn't ask about state inheritance taxes - a few states do have them. What state do you live in?
    rj914's Avatar
    rj914 Posts: 3, Reputation: 1
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    #5

    Jan 26, 2010, 01:59 PM

    Pa, and I have already take care of the state tax, but thanks for asking. Pa requires that you fill out an estimated tax within the qrt you receive your money, and at pay at least 90% of the estimated tax before year end.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #6

    Jan 26, 2010, 02:10 PM

    Yes - PA has an inheritance tax that is 15% for non-lineal descendants.
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