Anytime a beloved person dies it is an unfortunate event. However, the grieving process may become even more complicated when having to deal with stressful inheritance issues. While possessions, monies, and estates have been passed down from generation to generation, the process has become more complicated over time. It is advisable to hire a tax accountant or an attorney skilled in inheritance taxes because this process can become very complex and overwhelming. By having an expert present in the decision-making and allotment - the process of inheritance becomes easier to deal with.
In the USA, there are two different types of inheritance taxes - estate taxes and inheritance taxes. The main difference between the two is that estate taxes are levied on the representatives of the deceased person, but inheritance taxes are levied on the beneficiaries of an estate. Currently, the IRS has a universal method for determining whether or not there is an inheritance tax due to properties or monies received by the left-behind beneficiaries.
There are four steps needed to be done before any determination for inheritance taxes be made. The initial step is to calculate the exact fair market value of the deceased's entire estate/possessions. This includes but is not limited to all cash, cash items, stocks and bonds, insurance, home property, other real estate properties, and bank accounts. When all of these items are assessed for their respective market value worth, they are then given the name of Gross Estate.
The second step in this process is the adjustment of the Gross Estate. Here is an example of this adjustment - if a deceased person did not paid-off the remaining balance of their home, the Gross Estate would need to be used to settle all the remaining payments.
The third step and final step is called the Special/Marital Deduction. Martial deduction is used to refer to money and possessions given to the surviving spouse. When all of these steps are completed, then whatever is the remaining balance is considered taxable by the IRS. The calculation of the inheritance tax is based on the remaining net value of the property and how much is given as taxes is based on the IRS's tax exclusion guidelines which are revised yearly.
When a beloved one dies, it's a terrible moment in the lives of those left-behind. However, with education and help - the inheritance process can become more bearable.