California Inheritance Tax

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What Is an Inheritance Tax?

An inheritance tax, sometimes called a "pick-up tax" or, incorrectly, an "estate tax," is a tax paid on a gift you received from someone who has died. Currently, under federal law, these taxes only take effect when an estate is worth more than $1.5 million.

Does California Currently Have an Inheritance Tax?

No. When the federal government enacted the Economic Growth and Tax Relief Reconciliation Act in 2001, many state’s inheritance taxes were phased out. Additionally, California requires a majority vote by its residents before enacting new legislation. Therefore, California has not directly taxed an inheritance since 2005. However, keep in mind that federal income tax law still applies.

To summarize:

Where Is Inheritance Tax Collected?

Below is a list of states who still collect an inheritance tax:

*As of May 8, 2013, Indiana signed into law an act that retroactively repealed their state inheritance tax.

How Can the Inheritance Tax of Another State Effect My Inheritance?

If a person who left you money lived in one of the above states during a period of time where an inheritance tax was valid, you may still owe tax on that gift.

Should I Seek Legal Help?

Estate Planning and Inheritance law is extremely complex and it only becomes more complicated as you add other areas of law, such as state and federal income tax. If you have a question regarding your tax liability, you should contact an experienced attorney as soon as possible.

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Last Modified: 08-23-2016 10:00 PM PDT

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