I am a resident of North Carolina, and I am 1 of 20 beneficiaries of a probate estate and trust. The person that passed away lived in Minneapolis. I got a letter in mail that I will receive just under $10,000 from trust and just under $10,000 from the estate. What taxes from north Carolina and federal taxes am I expected to report?
The BIDaWIZ Team's Answer:
The monies you directly inherit will not be taxable to you since the federal and North Carolina estate tax exemption is $5.12 million for 2012. If property or investments are sold after you inherit it, you may be subject to capital gains taxes. Also, if you're inherited a retirement account such as a 401K or IRA, you could be subject to taxes and restrictions.