FAQ Friday: Inheritance Tax

At our FAQ Friday on April 9th, 2021, Mr. Berger discusses what to do if in the following situation: "I had received $10,000 as a gift from my Uncle as a part of his Will. Now I received a tax bill for the $1,000. I thought gifts under $15,000 were not taxed."

Maryland is one of six states with Inheritance tax. The rate is 10%. There are a lot of exemptions, so it only applies to those aren’t exempt. Another tax is Maryland estate tax which is 16%. The person receiving the gift, pays the tax unless the Will states that they pay the tax.

There are some exceptions: life insurance. If estate is less than 50k, there would be no inheritance tax on the estate. The Maryland tax of 10% applies to persons that are not direct descendants or a spouse.

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