What taxes do estate beneficiaries have to pay?

The good news is Florida does not have a separate state inheritance tax. Even further, heirs and beneficiaries in Florida do not pay income tax on any monies received from an estate because inherited property does not count as income for income tax purposes.

Alex: I'm a beneficiary of an estate that hasn't divied up the funds yet.

Attorney Tom Olsen: Got it.

Alex: I know about the limitations that you spoke to about the federal tax and the state tax. How about the beneficiaries? When they receive the money, is that a taxable event for the beneficiary?

Attorney Tom Olsen: No. If there are any estate taxes due, it will be paid by the estate before it is given to the beneficiaries. The only tax that a beneficiary might have to pay would be if you were the beneficiary of your parent's traditional IRA.

Alex: Got it.

Attorney Tom Olsen: Did that make sense to you Alex?

Alex: I really appreciate your show. You guys cover a lot of great topics. Thank you so much.

Attorney Tom Olsen: All right, Alex, thank you for calling