What is the Estate Inheritance Tax in NYC

New York State taxes all property in an estate (cash, stocks, bonds, real estate, art, jewelry, etc.) ABOVE one million dollars. In other words, the first million $ is estate tax free. The estate pays the tax, although heirs may have to liquidate property to pay the tax. It is not technically an "inheritance" tax. I am not a tax professional, just someone who has been through this recently.

Generally speaking, estate taxes are due 9 months after the person died.

Inheritance and Estate Taxes
There is no inheritance tax. Regarding the estate tax, if the date of death is on or after January 1, 2004, the estate must file a New York State estate tax return if any one of the following conditions are met: (1) The decedent was domiciled in New York State at the time of death and the total of the federal gross estate, federal taxable gifts and specific exemption exceeds $1 million; (2) The decedent was not domiciled in New York State at the time of death and the estate includes real or tangible personal property with a situs in New York State, and the total of the federal gross estate, federal taxable gifts and specific exemption exceeds $1million; or (3) The decedent was neither a resident nor a citizen of the United States, the estate includes real or tangible personal property with a situs in New York State, and the estate is required to file a federal estate tax return.

And for 2010 and 2010 only, there is no federal estate tax. Isn't that great? I wonder which bozo let the estate tax expire.

The bozo's would be the current congressional majority who neglected to take action, or even attempt to take action.

They did it for Steinbrenner, Uncle Sam is a Yankee fan and it was his "thank you" for taking home another Series in 2009. A mere $500 million that his family now gets to keep...

There's the old line about being born on 3rd base and thinking you hit a triple - for the Steinbrenners I would add that after being born on 3rd, they were balked home.

Good for the Steinbrenners.

wistletown- there is no limit on how long you can hold the property. It has to be appraised as part of the estate, and if you can pay estate taxes without selling the property, then you can hold it as long as you want.

All estate valuations are as of date of death

If you arrange to die before the end of this calendar year, it will be the trade of a lifetime (assuming you care about your heirs). Cheers.

You can get creamed with capital gains tax, though.

Let's say a parent's estate is mostly a $2,000,000 apartment.

If parent died in 2009, the $2M is under the limit, so no estate tax. Child inherits apartment. Child's basis is $2M. If child sells, no capital gain.

If parent dies in 2010, still no estate tax on the $2M. But, the child's new apartment's basis is whatever the parent paid for it x years ago. If, say, $200K, if child sells there's a $1,800,000 capital gain.

So, it all depends.

NWT, good point. Hard to imagine someone with 2 million apt. and no other assets, but, heck, you never know. Consult your tax advisor and Kevorkian and plan it wisely. If you were smart enough (or dumb enough, that depends on the quality of the heirs) to QPRT the RE years ago, the RE cap gns thing wouldn't be an issue. but who can read the future, as to what the tax laws will be in subsequent years. Consult your tax advisor and plan your death or whatever, wisely.

ph41
All estate valuations are as of date of death

no. All estate valuations are as of date of death or, in the alternative, the valuation 6 months after date of death.

Isn't the estate tax in concept to tax assets that a parent might have held for a long time and have appreciated? Or is it strictly to strip away wealth and become a source of revenue for the gov't?

Using NWT's example: What happens if a parent buys a 3 million dollar house in cash and dies 2 years later when it is worth 2 million? Does the child get the cost basis of 3 million?

Or if they cash out 5 million in stock paying all taxes on any gains and then they die? Or if they reinvest that money and the portfolio is worth significantly less at the time of death?

Seems like the money is being double taxed in those cases. Of course it is "new" money to the heir and i guess that is the reasoning behind it. Crazy.

I would imagine that Mrs. Steinbrenner got a large chunk of Mr. Steinbrenner's assets, making the absence of a federal estate tax less significant. Unless Big Stein had terrible estate planning...

Valid point for capital gains though.

In 1970, Steinbrenner only put down $168k of the $8.7 million in 1973. About 2%.