• 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.

POD Accounts-Do you pay taxes on it?

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

What is the name of your state (only U.S. law)? Iowa

Mother is thinking of setting up a POD(Payment on Death)account at the bank for the CD's that she has. Will the persons that receive this money have to pay any taxes? The amount is $60,000. Thank You.
 


anteater

Senior Member
What is the name of your state (only U.S. law)? Iowa

Mother is thinking of setting up a POD(Payment on Death)account at the bank for the CD's that she has. Will the persons that receive this money have to pay any taxes? The amount is $60,000. Thank You.
Pay it themselves? Unlikely.

But that money will be part of Mom's gross estate. And, if the overall estate is large enough, the estate could be subject to federal estate tax. (And Iowa has its own estate tax which is designed to pick up the credit for state estate taxes paid. Since that federal credit is repealed - at least through 2010 - effectively, there is no estate tax in Iowa right now.) In 2009, only estates greater than $3.5M are subject to federal estate tax. How that may change in the next few years is anybody's guess.

Iowa also has an inheritance tax. Whether inheritance tax is due depends upon the relationship between the deceased and the beneficiaries. Assets passing to beneficiaries who are lineal ascendants or descendants of the deceased are exempt form the inheritance tax.

(And I bet you thought there was a simple answer.)
 
Last edited:

Find the Right Lawyer for Your Legal Issue!

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