Is a beneficiary taxed on an inheritance?

Asked on December 2, 2011 under Estate Planning, Wisconsin


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Good question. A beneficiary under a Will, trust or intestate succession is not taxed personally on the inheritance he or she may receive if an individual. Rather the deceased person's estate files an estate tax return for both federal (Internal Revenue Service) and in the state where the person resided when he or she passed away.  

If a person makes a gift to an person while alive exceeding the maximum amount allowed per year under Internal Revenue Service rules ($13,000 maximum per year), the person making the gift would be taxed for gift tax purposes for the amount exceeding $13,000 per year per each person.

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