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Estate & Inheritance tax (Maryland) real estate valuation and distributions

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T

taxed_enuf

Guest
state = maryland

the estate includes real estate (personal residence), mutual fund stock IRAs & cash, the fair market value of the gross estate is less than 675,000

3 broad areas needing information:

1) the state of maryland has a valuation which it uses for property tax purpose - location of database is here:

http://www.dat.state.md.us/sdat/CICS/

a) can this state property tax valuation be used to value the real estate or must an appraisal be done to reflect fair market value or does the executor have a choice? If the law allows a choice can you provide the US Code site (26 U.S.C. 2001).

2) the real estate is to be sold, given this estate is below 675,000, is it correct to think a lower valuation for the real estate would be better for the beneficiaries, since this would lower the basis used for inheritance tax? Linked to the above question what are the options for valuing real estate if not already discussed.

3) mutual fund IRA's of the decedent which list a beneficiary:

a) can the beneficiary obtain the distribution by selling the stock mutual fund for cash and obtain this cash without going through probate.

b) since the estate is less than 675,000 would there be no additional tax payable by the beneficiary? If incorrect please explain.

c) also does the beneficiary need to include the distribution on their tax return for the year in which the distribution was made (as a nontaxable distribution)?

d) since the estate is below 675,000, is it correct to think that the option to withhold 10% by the Mutual fund, is not necessary?


















 


ALawyer

Senior Member
Unless the deceased had made gifts to any one person totalling $10,000 or more in any year during his lifetime and thus used up some of his lifetime exception, you have the $675k exemption from FEDERAL estate tax. I am NOT sure if MD has a state estate or inheritance tax.

As for the IRA, the money in it has NOT been taxed. So when you withdraw it, there is INCOME tax to pay. The trustee or custodian of the IRA would normally sell the assets in it at the request of the beneficiary PRIOR to transfer.
 

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