Maryland inheritance tax question

[myaim]

I live in Maryland and am going to be inheriting money from my Uncle's estate in Florida. Do I have to pay an inheritance tax on this? Thank you in advance.

 

[FlyingRon]

Tax is only due in Maryland if he was living or owned property in Maryland when he died. Federal tax (if any is due, there's a hefty (two million for last here, 3.5 for 2009) exclusion). Florida doesn't tax estates if I understand things correctly.

 

[myaim]

Thanks for the reply. One more question below. Found this online last night:

MARYLAND INHERITANCE TAXES

(Effective for persons dying on or after July 1, 2000. Different laws apply for persons dying prior to that date.)

Property subject to inheritance tax:

1. Property passing by Will or under the laws of intestacy

2. Any interest as a joint owner (other than a surviving spouse) in any real or personal property, including credit union, bank, or other financial institution accounts

3. A material part of the decedent's property transferred by the decedent within two years of death (other than a bona fide sale) in the nature of a final disposition or distribution, including any transfer that resulted in joint ownership of property, if the transfer is made in contemplation of death

4. Property over which the decedent retained any dominion at the time of death, including a beneficial interest, a power of revocation, or a power of appointment by Will or otherwise. This includes trusts, P.O.D. accounts, annuities or other public or private employee pension or benefit plans that are taxable for federal estate tax purposes, life estates and other interests less than absolute, in trust or otherwise

Exemptions from Maryland inheritance tax::

1. Property that passes from a decedent to or for the use of a grandparent, parent, spouse, child or other lineal descendant, spouse of a child or other lineal descendant, stepparent, stepchild, brother or sister of the decedent, or a corporation if all of its stockholders consist of the surviving spouse, parents, stepparents, stepchildren, brothers, sisters, and lineal descendants of the decedent and spouses of the lineal descendants

2. Life insurance benefits not payable to the estate of the insured

3. Grave maintenance up to $500 passing under a Will for the perpetual upkeep of graves

4. Property passing to a non-profit organization which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code if incorporated in Maryland or if there is a reciprocal agreement with the jurisdiction where the organization has its principal office

5. State, county or municipal corporations

6. Property administered under a Small Estate proceeding

7. Property passing to any one person not exceeding a total of $1,000

8. Personal property of a non-resident with the exception of tangible property located in Maryland

9. Income, including gains and losses, accrued on probate assets after the date of death of decedent (However, it is reportable to the State of Maryland as estate income.) (# 9 became effective January 1, 1998.)

Lineal Tax Rate applies to distributions to lineal heirs or legatees from a decedent dying prior to July 1, 2000, and may be obtained by contacting the Register of Wills Office.

Collateral Tax Rate of 10% applies to property passing to persons or organizations not identified as exempt. If the decedent died prior to July 1, 2000, brothers and sisters are included in collateral, however, their rate varies and is determined by the date of death.

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Basically, all the assets (CD's, stocks, bonds, land, etc) will be sold and the funds divided up between the heirs. Will I be responsible for any taxes whatsoever? Thanks again.

 

[FlyingRon]

Let me put it to you again:

Where was grandfather residing when he died? Where was any real property in the state located? Where was the estate probated?

If the answer to all those questions is some state other then MARYLAND the fact that you live in MARYLAND is immaterial. The MD tax laws do not apply to this.

If the answer to all the questions is FLORIDA, and the total assets of the estate and any gifts greater than $11,000 per year given out in your uncles lifetime is less than two million, then there is NO ESTATE TAX.

 

[myaim]

Thanks a lot, FlyingRon.

Don't want to give Md anything extra. They get enough already.