Will I be taxed on an inheritance from my aunt after she dies? 16 Answers as of December 12, 2011

You will not be taxed. However, a gift of more than $13,000.00 per year will reduce your aunt's life-time exemption by $37,000.00.

Gifts and inheritances are not taxable income to the recipient under Section 102 of the Internal Revenue Code. Either way they are not taxable to you. However, if she lives for one year from the date of the gift, there is no PA inheritance tax on the gift. If you receive the gift at her death there is a 4.5% PA Inheritance tax that must be paid. It is usually paid by the estate and not by the recipient of the gift.

Under federal law, almost always no (although she may have to file an informational IRS return). Under some state laws, yes, and under some state laws, no. See a CPA or lawyer in advance.

Utah abolished its inheritance tax around 2005. However, there are still federal estate taxes that you should be aware of. It is possible to minimize your tax rate by doing a gift before her death. Because of the implications in determining any tax liability, it is important to speak to a competent legal tax professional. You should contact a tax attorney to discuss further the various tax rates as they are complicated without a full understanding.

There is no tax to the receiver of an award from an estate.

No, but she potentially could be.

You will not be taxed on it. Your aunt will have to file a Gift Tax Return and only if her estate if over $5,000,000 will she owe any estate or gift tax. Gift and Estate tax is paid by the person giving away the money.

If your aunt gives you cash, you will not be taxed. If she gives you appreciated property which you sell for more than what she paid for it, you will be taxed on the difference as either a short term or long term capital gain depending on how long it is owned before you sell it. If your aunt gives you $50,000.00, she probably will incur a gift tax obligation. She can make the first $13,000.00 portion of the gift as exempt (and up to $26,000 if a spouse joins in the gift with her) and can use a lifetime exemption to cover the rest of the $50,000.00. In addition, if she makes such gifts in two parts, one in 2011 and the other just after the first of the year, she can use the annual exclusion for both.

If she gives it to you before she dies, it is not inheritance, it is a gift. She will need to file a gift tax return and depending on the total prior gifts she made, she may owe gift tax.

Generally, there are no taxes imposed on inheritances such as you have described.