Inheritance Tax in New Jersey ?

Question

Ok my parents are looking to buy my grandmothers house in New Jersey. (they also are residents of new jersey). My question is " Is their inheirtance tax in NJ and how much is it ?" (the house is worth around 350k). Also, I know their is capital gains tax and estate tax. Are these the same thing ? What are their rates ? Thank you please help

Answer 1

There is no federal inheritance tax, but NJ does have one. There is a federal estate tax. That said, if your parents are buying your grandmother's home, inheritance taxes or estate taxes will not be involved in the purchase.



There may be a capital gains tax for your grandmother to pay if her gain is more than $250,000 (and she's single) or if she did not occupy the home as her principal residence for at least 2 of the 5 years prior to the sale. The rates of CG tax would vary from 0% to 35% depending upon the facts, none of which are given in your question.



Estate taxes are assessed on the value of an estate in excess of the exclusion amount. The current exclusion is $5,000,000. The tax is currently a flat 35% of the excess value of the estate. They would have nothing to do with your grandmother selling her home, to your parents or anyone else for that matter.

Answer 2

not sure what you mean about your parents buying the grandmother's house, that is not inheritance

if they buy it they buy it

if the house is left to them by the grandmother, it is not taxable for IRS, NJ may have other inheritance laws of which you can probably find on the state's website

the estate tax is paid by the estate, ie, the estate will pay all taxes that are due and anything that is passed on to relatives is their inheritance

the capital gains tax is assessed when one sells capital assets for a gain

Answer 3

350K is under the inheritance tax limit. Your question begets more questions as inheritance has nothing to do with capital gains and/or estate tax. Go to IRS.GOV and download a free Pub 17 or order one so you can acquire more tax knowledge and so on.

Answer 4

It is said that The Transfer Inheritance Tax applies to the transfer of all real and tangible personal property located in New Jersey and intangible personal property wherever situated in estates of resident decedents. In estates of nonresident decedents, the tax applies to real property and tangible personal property located in the State of New Jersey.



Thanks for sharing..