For the most part, the news is good when it comes to taxes on inheritances. You do not have to claim a direct inheritance on your regular income tax returns, and this includes insurance policy proceeds.
Inherited appreciated assets get a stepped-up basis. The person inheriting the asset is not responsible for gains that accumulated during the life of the decedent. They would be on the hook for future appreciation if and when they realize a gain.
On the bad news front, there are estate taxes to contend with, and there has been a change to an important Connecticut state estate tax detail for 2021.
Higher Exclusion
The exclusion is the amount that can be transferred tax-free before the estate tax would be applied on the remainder. In 2020, the estate tax exclusion in seminar page, and when you identify the session you would like to attend, follow the simple instructions to register.
Mr. Nirenstein is licensed to practice before the courts of the State of Connecticut and the United States District Court. He is a member of the Connecticut and Hartford County Bar Associations, and the Estate and Probate, Elder Law, Business Law and Real Estate Sections of the Connecticut Bar Association.
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