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I'm not sure that there is one. It depends on the transaction and the life estate, which can take many forms and cover many things.

Any beneficiary of a life estate has to pay taxes on what they inherit. It is based on the value of the estate at the date of death.

Life estates and taxes is an extremely complicated issue and there is no quick universal answer. You need to speak with a CPA (or two) for a professional opinion. See the information in the link provided below for a good discussion of the many aspects of taxation relating to life estates.

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13y ago
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15y ago

This depends on the state and its particular inheritance tax laws. But it is possible there are inheritance tax laws which make inheritance of a life estate taxable. The amount of the tax is tricky to figure out though and often is a subject of a compromise. To begin with, keep in mind that when one person owns the life estate only, another person ( called a remainderman) owns what is called the remainder interest. Both people may have to pay an inheritance tax on the VALUE of their respective shares. The tax laws use what are called mortality tables to determine these values. These tables estimate the average life expectancy of men and women of certain ages. Then there are corresponding percentage tables which are used to calculate the relative values of the life estate and of the remainder interest. Using an estimate of the life expectancy of the life tenant, the tables will give a number expressed as a percentage. This percentage represents the percentage of the house that the life tenant owns. Note that it is not simply 50% for each person. This percentage is then multiplied by the dollar value of the house with the product representing the dollar value of the life interest. Once the dollar value of the life interest is determined, that amount is subtracted from the actual dollar value of the property itself. The remaining amount is the value of the remainder interest. The inheritance tax obligation for the life tenant and the remainderman will be calculated separately by applying the appropriate inheritance tax rate to the dollar value of their respective interests. Then they each pay their share to the government. The value of a life interest differs according to the age of the life tenant. The value of a life tenancy of a 20 year old person is greater than the value of a life tenancy given to a 70 year old person. This is because the 20 year old presumably will have many more years to live in and make use of the home than the 70 year old person based on average life expectancies, even though there is no guarantee the 20 year old will reach the life expectancy in the table. And, even if the 20 year old pays a tax calculated on his living the full time, there is no recalculation of the tax should he die prematurely. The government will not return any money because the decrease in the value of the life tenant who dies early is exactly set off by the increase in the value of the remainder interest. Nor does one party reimburse the other if things do not work out according to the averages.

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Q: Do you have to pay inheritance taxes on a life estate?
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Does the estate pay taxes?

Estates pay taxes on income and may have to pay inheritance taxes.


Do you pay taxes on a trust inheritance?

Depending on where someone lives depends on the need to pay taxes on any inheritance they get from a living trust. The beneficiary of an estate from inheritance will need to pay taxes to take possession of assets.


Who is required to pay inheritance taxes?

In many jurisdictions the estate pays inheritance tax.


Will you have to pay taxes on your inheritance of 900000 in Texas?

As far as Federal income taxes are concerned, inheritance is not taxed on your 1040 return. The Estate itself may be required to file an Estate Tax Return and possibly pay Estate Taxes depending on the total value of the estate in total and the line of inheritance. As far as State taxes in Texas, I am not familiar with that but I doubt very seriously if any income tax is due on a State basis either.


Do I have to pay estate taxes on inheritance property?

Yes, you will have to pay estate taxes on inherited property. In the United States an estate taxes is always imposed on the transfer of the "taxable estate" of a deceased person. Have already paid state taxes for CA. in FEB. Are there going to be more? I've paid taxes, is there aditional taxes included.


Do you have to pay federal taxes on money you get from an estate?

No. Estate taxes are paid by the estate of the dead person. The person who receives the property or money does not pay the tax.Were it as easy as that!Frequently, especially when the inheritance comes from a 401k or other plan, the amount is taxable. There may be an estate tax ( and may not) dependning on the size of the estate, and some taxes mat be a credi against others (like gift taxes against inheritance taxes). There are many taxes involved in any inheritance, estate &/or gift.On something like a 401 k you would have a beneficiary. In that case the 401 k does not become part of the estate, unless the estate was named beneficiary.


Do family members have to pay inheritance taxes?

Generally, inheritance taxes are paid by the estate. However, under present federal tax laws estates under $2M are not taxed. There may be state inheritance tax consequences but those limits are also high and if taxes are due they are paid by the estate.


Do you have to pay capital gains taxes on an inherited property that was sold and inheritance taxes were already paid on the estate?

On the amount the property went up in value from the value used in calculating the estate tax


If a parent adds a child to a deed does the child have to pay inheritance taxes?

No, inheritance taxes are not paid until after someone dies. But the parent may have to pay a gift tax and may see the amount he can leave to his heirs free of federal estate tax reduced.


Do you have to pay taxes on money inherited from parents estate?

Inheritance is not taxed for income tax purposes. However, if you acquire property through inheritance like a house or stock, and sell it later, you may have an income tax situation. There is a tax called estate tax, which must be filed and paid by the parents estate. This would depend on the entire value of the parents estate to determine if an estate tax return is necessary.


Do you have to pay income taxes on inheritance?

no


Can a life tenant stop paying property taxes on a life estate?

No. Paying the taxes is their legal obligation and they may lose their life estate if they fail to pay. That action would provide the fee owner or remainders a reason to take the life estate to court for termination.No. Paying the taxes is their legal obligation and they may lose their life estate if they fail to pay. That action would provide the fee owner or remainders a reason to take the life estate to court for termination.No. Paying the taxes is their legal obligation and they may lose their life estate if they fail to pay. That action would provide the fee owner or remainders a reason to take the life estate to court for termination.No. Paying the taxes is their legal obligation and they may lose their life estate if they fail to pay. That action would provide the fee owner or remainders a reason to take the life estate to court for termination.