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California Inheritance Tax
I just receive a California inheritance distribution of $56,000. Also I received a W-9 form from my probate lawyer.
Here are my questtions of concern: Must I pay any withholding taxes to either the Federal or State for this amount of inheritance money? (If, yes, what percentage of taxes would I owe?) And, can I file the W-9 form when my taxes are due in April of 2007 (at the latest), instead of mailing my W-9 form back to my attorney for the estate? I don't want the requester of my Tax ID number to send this W-9 form to the IRS before April. So can I send the W-9 form back to the requester (my probate attorney) in April, even if I cashed the inheritance tax January 2007? Can I cash my inheritance check first and then send my W-9 form back to my probate lawyer a few months after I cash my inheritance check? How long do I have before I must pay, if any, inheritance taxes after I have cashed the check? |
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An inheritance is NOT subject to federal income taxes. While I am not 100% sure, I doubt that it is subject to California income taxes either.
Regardless, you are obligated by law to return the W-9 as soon as possible. You have nothing to worry about on the federal side of the equation, and I am pretty sure that California will not be looking for any income taxes as well. Any federal estate taxes or state inheritance taxes are paid BY THE ESTATE. The attorney needs your tax ID number (in your case, your SSN) for the final report to the courts and on the estate tax return to show that the money from the estate is properly accounted for. Fill out the W-9, send it and do not worry about it! |
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