Having trouble finding a solid answer: Is the limit for the inheritance tax

[luvwinnie]

now $1 million? Thanks to anyone who knows.

 

[BunsenH]

The threshold for 2006 is $2M and will increase $500K/year until 2010.

 

[luvwinnie]

Thanks so much.

 

[Heather Smith]

I think you're referring to the estate tax. The Federal Gov't does not have an inheritance tax, though some states do. These are two very different taxes.

 

[luvwinnie]

The "estate" in question is nowhere near a million so we are ok.

 

[Dan Murphy]

The individual Federal estate tax exemption is $2 million is 2006-2008, $3.5 million in 2009, the tax is repealed in 2010, and in 2011, back to $1 million, as stated in the 2001 tax bill sunset provision.

(not to be taken as tax advice)

 

[Tinkim]

The individual Federal estate tax exemption is $2 million is 2006-2008, $3.5 million in 2009, the tax is repealed in 2010, and in 2011, back to $1 million, as stated in the 2001 tax bill sunset provision.

(not to be taken as tax advice)

Dan ~ I have a question for you. I know you have a disclaimer about tax advice so I promise this won't be construed as "tax advice." A friend of mine had a house that belonged to DH and his ex-wife. The DH passed away and the house had to be sold. Since my friend didn't technically own the property the lawyer said she didn't have to pay any tax on the sale of the house as far as real estate (which I believe you don't have to pay anyway if you are selling your primary residence). Anway the lawyer said it was considered an inheritance but since the house sold for the same amount it was valued at technically the profit was "zero" and no taxes would be assessed. She received only a small amount of money for the sale of the house and she is worried that she will be taxed on that and someone else told her she would be taxed for the whole amount of the "sale price" of the house. I know she will have to talk to a professional when she gets her paperwork together but she is worrying herself to death over this. If you have any insight to set her mind at ease until she makes an appointment I would appreciate it.