In this presentation, we will look at a number of different taxes. Learn more about taxes in this presentation.

1. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
DO I PAY TAXES WHEN
SOMEONE LEAVES ME MONEY?

2. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
TAXES ON INHERITANCES
You may wonder about the taxes that you
may face if you receive an inheritance.

3. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
In this presentation, we will look at
a number of different taxes.

4. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
INCOME TAXES
Since the IRS wants you to report all sources of
income, you may assume that you have to
include an inheritance when you file your returns.

5. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
In fact, an inheritance is not
considered to be taxable income.

6. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
CAPITAL GAINS TAX

7. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
The capital gains tax is applicable when a
gain is realized

8. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
You realize a capital gain when you
sell an asset that appreciated while
it was in your possession.

9. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
STEP-UP IN BASIS

10. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
Inherited assets get a step-up in
basis for capital gains purposes.

11. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
This means that the inheritor would
not be responsible for the gains
that took place during the life of the
decedent.

12. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
The capital gains tax could be
applicable in the future if the assets
continue to appreciate while they
are in the possession of the
inheritor.

13. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
FEDERAL ESTATE TAX

14. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
So far, the news has been good, but now we
have to look at the other side of the coin.

15. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
There is a federal estate tax that
can enter the picture, and it carries
a 40 percent maximum rate.

16. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
Fortunately, most people do not
pay the tax, because it is only
applicable on transfers that exceed
$5.45 million.

17. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
MARYLAND STATE
ESTATE TAX
There is another advance directive for health care
that should be executed called a durable power
of attorney or health care proxy.

18. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
We practice in Maryland, and our
state has an estate tax on the state
level.

19. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
This tax can be applied on the
portion of an estate that exceeds
$2 million in 2016.

20. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
STATE LEVEL
INHERITANCE TAX
Maryland also has a state level inheritance tax.

21. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
This tax can be applied on transfers
to each nonexempt inheritor.

22. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORFHowever, close relatives are exempt.

23. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
TAX EFFICIENCY
STRATEGIES
Maryland also has a state level inheritance tax.

24. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
There are tax efficiency strategies
that can be implemented when an
estate is subject to taxation.

25. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
The ideal course of action will
depend upon the circumstances.

26. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
OUR FIRM CAN HELP

27. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
We can help if you would like to
discuss your objectives with a
qualified estate planning attorney.

28. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
Feel free to send us a message if
you would like to set up a
consultation.

29. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
If you are ready to get started,
contact us to set up a consultation.

30. ANNAPOLIS • MILLERSVILLE • BOWIE • WALDORF
Or visit our website
www.sinclairprosserlaw.com
Nicole Livingston
Jon J. Gasior
Colleen SinclairProsser
Victor A. Lembo