Estate tax v. Inheritance tax?

What is the name of your state? Kentucky

I am 1 of 4 equally in an estate in KY. I am having a little difficult time getting basic facts about paying taxes if any.

I know the federal govt taxes estates but this one is small around $125K total so there will be no estate tax at the fed level correct? Do each of us then have to claim whatever we get to the IRS as "income" next year tax filing and pay taxes that way? Or is such income exempt from personal taxes?

At the state level what is paid? I downloaded a pdf format estate tax forms for my state. It doesn't say at what point an estate is taxed. It does say that I have to pay "inheritance tax" as an individual cause of the generational skipping tax law along with my bro. Says my mother and uncle do not. Do I have to pay that after the state taxes the estate or is my part of the inheritance tax the way my state taxes estates. I read somewhere that states tax the estate as a whole OR taxes each of us. But not do both.

Anyone can help me out here?

Trent

There will be no federal tax unless the decedent gave away a LOT of property before death. You do not include the inheritance in your income.

States impose either estate taxes (paid by the estate out of general funds) or inheritance taxes (imposed on the heirs but paid by the estate out of general funds). Most states do not tax the first $675,000 or $1M of an estate/inheritance. The only difference is who is responsible for the taxes if they are not paid before property is distributed, the executor or the heirs.

Estate/inheritance taxes are separate from probate fees.

Talk to the executor about the taxes. With that small an estate, I doubt you have any GST taxes, but double check with the executor. S/he is the one responsible for filing the appropriate returns & should have already sought advice from an estate tax attorney/accountant.

Thanks for your reply.

The executor is not very smart and he has no clue. So he hired an estate attorney in which we are paid $900 plus $120/hr. I had asked him about the taxes and whatnot and hasn't asked our estate attorney. Actually, my mom and bro and I hired a private attorney cause my uncle is trying to get one of his daughters in the will. So we do not have contact with him no longer or his estate attorney. Our estate attorney won't even respond back to our attorney after several attempts to contanct him via letters and phone and court orders.

Anyhoo...

I thought that $675K to $1M only applied to the federal.

As I read some estate state forms, my uncle and mother are exempt cause they are "class A" people. My bro and I are "class B." We pay inheritance tax. I am expecting to get about $25K. For that amount, I would pay $500 plus 6% of anything between $20-30K. It goes up in increments. My bro who is out of state will pay a little more. I just wanted to find out if we pay inheritance tax on top of an estate tax or is it one or the other.

I think you answer just one of them.

Trent