Video Summary
How are taxes handled with trust? Will my beneficiary owe taxes when they inherit? First, you need to determine whether you have sufficient assets to be taxed by the federal government. The State of Florida has done away with their estate tax law or estate tax. The federal government has raised the estate tax exemption to a little under $14 million. So if you have assets of less than $14 million, there is no tax federal estate tax. If you have real estate outside the state of Florida, that state may tax your estate upon your death as far as the benefits under your beneficiaries receive the dated death value of your assets, so it limits their tax liability. An example of that is if I purchased a piece of real estate for $200,000 during my lifetime, say in 2000, and then I die in 2025 and the property is worth twice that much or $400,000, well, if my beneficiary sell the property for $400,000, there’s no tax since their basis or step up in basis is $400,000. If they sell it for more than what the date of death value is, they only must pay long-term capital gains. So that’s a huge income tax benefit for inheriting property rather than receiving it during the party’s lifetime. So, if you have any questions, give me a call at (727) 847-2288.