Estate taxes

[rivulus]

What is the name of your state (only U.S. law)? NY


My mother passed away recently. Approximately 2.5 years prior to her death , she redeeded her home to me via a Quitclaim Deed. All of her financial accounts were as follows:

- checking account (I was sole beneficiary)
- C0-owned Annuity (in both her name and mine)
- Annuity (sole beneficiary if living , otherwise my sister)

Thus , all of the accounts automatically were mine upon her death (the annuity was reinvested after her death in my name).

My question is this: are any of these considered part of the estate? If so , what about taxes on them? (My mother did not have to file tax returns for quite a few years.) There was nothing else in her possession at the time of death.

[anteater]

My question is this: are any of these considered part of the estate?

There is a distinction to be made here when using the term "estate." Since there was a co-owner and/or named beneficiary, the accounts do not have to go through probate and, therefore, are not part of the "probate estate." Estate taxes are based on what is termed the "gross estate." In very simplified terms, the gross estate includes whatever the deceased owned. The checking and solely-owned annuity would definitely be part of the gross estate. Depending upon the exact facts and circumstances, the co-owned annuity may also be part of the gross estate.

1) For federal estate tax, the first $3.5 million of estate value is not subject to estate tax in 2009.

2) This is from memory, but I believe that the New York estate tax limits the exclusion to $1 million. You would need to check on that.

3) When your mother quit claimed the house to you, that was a gift. I believe that the annual gift exclusion was $12,000 2-1/2 years ago. The value of the gift above the exclusion should have been reported to the IRS as a reportable gift on Form 709. The amount of the reportable gift decreases the federal estate tax exclusion by the amount of the reportable gift.

I don't know how New York treats the house gift for estate tax purposes. You would need to check on that.

Overall, unless the gross estate is somewhere around $1 million (subject to checking on the NY estate tax), there are probably no estate taxes due.

[rivulus]

I will check into the issues during the coming week. The house was appraised for $60K at the last appraisal. The total on the 3 financial accounts was just over $49K.