inheritance tax

[abs94]

What is the name of your state (only U.S. law)? new jersey
Hi I inherited a house from a non relative in new jersey. It has not been transfered to my name yet but will be anyday now.It has been appraised at 190,000. I understand I have to pay 15% taxes on it. I was under the impression that I have 15 years to pay off the taxes. Now someone told me I have to file a tax return within 8 months and that all taxes are due then. How can a person be expected to have 28 thousand lying around to pay taxes . Also how can I file within 8 months of death if the transfer hasn't happened yet. If I dont have the whole amount of money for the taxes what happens? Seems strange that you have to pay all at once if you inherit a house.I won't even have time to sell it to pay taxes.Hopefully the person was wrong and all taxes arent due at once. Any help you can give me I would greatly appreciate thank you

[Zigner]

Why would you have to pay taxes on it? The estate would have to pay the taxes...not you.

[davew128]

Originally Posted by abs94

What is the name of your state (only U.S. law)? new jersey
Hi I inherited a house from a non relative in new jersey. It has not been transfered to my name yet but will be anyday now.It has been appraised at 190,000. I understand I have to pay 15% taxes on it. I was under the impression that I have 15 years to pay off the taxes. Now someone told me I have to file a tax return within 8 months and that all taxes are due then. How can a person be expected to have 28 thousand lying around to pay taxes . Also how can I file within 8 months of death if the transfer hasn't happened yet. If I dont have the whole amount of money for the taxes what happens? Seems strange that you have to pay all at once if you inherit a house.I won't even have time to sell it to pay taxes.Hopefully the person was wrong and all taxes arent due at once. Any help you can give me I would greatly appreciate thank you

Assuming this person is referring to NJ's inheritance tax (there is no federal one), my guess is you need to sell the property to pay the tax if it is your responsibility. My understanding is that the ESTATE needs to file this return and pay the tax not the beneficiaries.

You should consult a NJ tax attorney.

[tranquility]

Your post is contradictory and just plain wrong. You need to see a professional. Since your role is not clear, I don't even know what type to recommend.

Are you the executor as well as the beneficiary?

[anteater]

The 15 years referred to by the OP comes from:

The return must be filed whenever any tax is due or a waiver
is needed. The tax is a lien on all property for fifteen years unless
paid sooner or secured by an acceptable bond. Interest accrues on
unpaid taxes at the rate of 10% per annum.

(10% - Ouch.)

With inheritance taxes, the liability usually runs to the beneficiaries.

[abs94]

I am not the executer. I am a non relative who inherited the house. In nj there is estate taxes over a certain amount and there is inheritance tax for anything over 500.00. The estate pays the estate taxes.The inheritance tax has to be paid by the person inheriting the money or property. My question is do I have to pay it all at once or do I indeed have the 15 years at 10 percent to pay it off. Selling house wouldn't help as the taxes would be due much sooner than anyone would be able to sell a house. Say you inherit a house worth 500 thousand your tax would be 15 percent or75 thousand. How can the state expect someone to have 75 thousand waiting around to pay on an unexpected inheritance. Only seems right they would give you enough time to sell house or otherwise find some other way to come up with the money. On all the state sites it mentions a lein for 15 years at 10 percent or until all taxes are paid. Am i wrong to see that as having 15 years of a payment plan? Thank you for all your help

[abs94]

Originally Posted by anteater

the 15 years referred to by the op comes from:



(10% - ouch.)

with inheritance taxes, the liability usually runs to the beneficiaries.

thank you i was refering to iheritance tax not estate tax. We want to live in this house but don't have 28 thousand to pay taxes all at once. My wife and i are both disabled. Regardless of our situation i don't know of mnay people who would have that kind of cash lying around ready to go.never have known anyone who lost out on a home because couldn't pay all taxes at once.i see that 15 year quote on the state site and it seems pretty clear but then again im not a lawyer thank you for your input

[abs94]

Originally Posted by zigner

why would you have to pay taxes on it? The estate would have to pay the taxes...not you.

the estate would pay estate taxes if it was over 600 thousand. The people that inherit anything over 500 dollars have to pay inheritance tax in nj at 15% thank you for your input

[abs94]

Originally Posted by davew128

assuming this person is referring to nj's inheritance tax (there is no federal one), my guess is you need to sell the property to pay the tax if it is your responsibility. My understanding is that the estate needs to file this return and pay the tax not the beneficiaries.

You should consult a nj tax attorney.

i dont want to sell property but if i have to i would. Question is how can you pay the taxes on time if it would take much longer than that to sell a house? Thank you for your input

[TinkerBelleLuvr]

If there are no other encumberances on the house, any way to borrow the $28K as a "mortgage" on the house? Would seem that the amount would be low; you would have to pay rent otherwise?

[abs94]

Originally Posted by tranquility

your post is contradictory and just plain wrong. You need to see a professional. Since your role is not clear, i don't even know what type to recommend.

Are you the executor as well as the beneficiary?

i am not the executor . My brothers and sisters all inherited cash and i got the house. We all have to pay inheritance tax of 15% percent in nj. With cash,no problem you just take it from your inheritance. With a house there is no way to get money out the house quick enough to pay the tax . Thank you for your input

[abs94]

Originally Posted by ginny j

if there are no other encumberances on the house, any way to borrow the $28k as a "mortgage" on the house? Would seem that the amount would be low; you would have to pay rent otherwise?

was thinking about getting ahome equity loan as there is 100 percent equity but we are both on fixed income right now. With credit the way it is not sure anyone would give us a loan. Was gonna try that but even so if you have to file return within 8 months of death and the title hasn't even been transfered yet at 7.5 months . How can i get aloan it would be past the due date of taxes. Thank you for your input

[LdiJ]

Originally Posted by abs94

was thinking about getting ahome equity loan as there is 100 percent equity but we are both on fixed income right now. With credit the way it is not sure anyone would give us a loan. Was gonna try that but even so if you have to file return within 8 months of death and the title hasn't even been transfered yet at 7.5 months . How can i get aloan it would be past the due date of taxes. Thank you for your input

I think that you need to get yourself a consult with a local tax professional. I don't practise in NJ, but I think that your interpretation of the NJ inheritance taxes could be a bit off. A local professional is likely to give you more accurate answers than you would recieve on an internet forum.

[anteater]

The return must be filed whenever any tax is due or a waiver
is needed. The tax is a lien on all property for fifteen years unless
paid sooner or secured by an acceptable bond. Interest accrues on
unpaid taxes at the rate of 10% per annum.

Originally Posted by abs94

thank you i was refering to iheritance tax not estate tax. ...

So am I. I just cut off the beginning of that section since you seemed to know already that the return and the tax is due 8 months after death.

A Transfer Inheritance Tax Return must be filed and the tax
paid on the transfer of real and personal property within eight
months after the death of either:
A RESIDENT decedent for the transfer of real or tangible
personal property located in New Jersey or intangible personal
property wherever situated

[abs94]

Originally Posted by anteater

So am I. I just cut off the beginning of that section since you seemed to know already that the return and the tax is due 8 months after death.

so what do you think they mean by a lein for up to 15 years or until tax is fully paid?thank you