Inheritance Tax

[aclov]

My MIL who passed away last year had a $5k life insurance policy, the insurance company mentioned having to pay inheritance tax. Is this something we would have to claim on our taxes? I went online and its stating 1% but that seems to low to me. I'm in Indiana. Thank you!

 

[barkley]

check with a cpa in Indiana, but from what I've just read on-line your state did some retroactive changes to inheritance taxes for deaths back to 2012.

I've had to deal with administering 3 different estates in 3 different states (a will, a trust, and one intestate-nothing written up), and none of them had the kind of complex individual and estate taxations laws your state appears to have in place. that said-for federal taxes I can say that for life insurance to a private party it's almost always non taxable, and from what I just read on-line it looks like the law change in Indiana made it non taxable to the state as well.

check with an Indiana cpa to be sure.

 

[LorieDisneyLover]

My MIL who passed away last year had a $5k life insurance policy, the insurance company mentioned having to pay inheritance tax. Is this something we would have to claim on our taxes? I went online and its stating 1% but that seems to low to me. I'm in Indiana. Thank you!

Normally before any taxes are due you are able to deduct the costs of burial, etc. I would think $5K didn't begin to cover the expenses you may have incurred.

 

[aclov]

Normally before any taxes are due you are able to deduct the costs of burial, etc. I would think $5K didn't begin to cover the expenses you may have incurred.

We paid out of pocket for funeral and burial expenses, she was in a nursing home so had no other assets. We were going use this money for her headstone which she still needs. We didn't even know still she had this policy until my younger BIL received a letter stating they were looking for her relatives.