• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

taxed as the benificiary

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

sblue

Junior Member
What is the name of your state (only U.S. law)? Arkansas
A Relative was left a company he ran by his mother when she died. That estate is selling the company, and he is the benificiary. In the state of Arkansas, would he have to pay taxes on the money from sale of the company?
 


anteater

Senior Member
In the state of Arkansas, would he have to pay taxes on the money from sale of the company?
Strictly speaking, he would not have to pay any estate tax. If there is estate tax due, the estate would be paying it before distribution. But that is only if the value of the entire estate is greater than $2 million for federal estate tax purposes. Arkansas has no inheritance tax and its estate tax is effectively repealed by changes in the federal law.

As to any income tax liability incurred due to the sale, there are not enough facts and it could be complicated with a business involved. If there is an income tax liability, the estate could report the income and pay the tax or the estate could "pass" the income to the beneficiary and allow him to report the income and pay any taxes due.
 

curb1

Senior Member
There could be income tax due on income produced by the company from the time of death until the sale. That is probably what anteater suggested.
 

davew128

Senior Member
Either way nothing makes sense. If the "relative" was left the company, then its owned by the relative, not the estate and the estate cannot sell it.
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top