If you inherit property from a Nebraska resident or a person who owned property in Nebraska, you may be subject to the Nebraska state estate tax. This tax is assessed on the property that passes to the beneficiaries and is different from the federal tax that is charged on the decedent’s net estate. There are exemptions in your relationship to the deceased. The closer your relationship, the higher the amount exempted from tax, the higher your income will be.
Exemptions
According to Professor J. David Aiken, writing for the University of Nebraska in “Cornhusker Economics”, Nebraska’s inheritance tax exemptions and effective rates were changed before January 1, 2008. According to the law, the surviving spouse is completely exempt from inheritance tax.
Relatives including deceased parents, grandparents, brothers, sisters, children and grandchildren, both biological and adopted, and the spouses of any of these relatives are entitled to a $40,000 exemption and they are subject to a 1% tax on the value of the inheritance in excess of that amount.
Other beneficiaries who are related to the decedent’s aunts, uncles, nieces, or nephews, by blood or by legal adoption, and any stock of these persons are entitled to a $15,000 exemption, with a tax of 13% on the excess.
Beneficiaries who are not related to the deceased have an exemption of $10,000 and are subject to tax at the rate of 18% of the excess assets equal to the value of the transfers. But they are transferred to organizations that work exclusively for religious, charitable, public, scientific, or educational purposes, they are exempt from exemption for alimony is $7,500 for a surviving spouse domiciled in Nebraska. If there is no surviving spouse, any minor or ward of the deceased is entitled to the allowance divided by the number of children.
An exemption is allowed for the value of furniture, automobiles, furniture, tools, equipment and personal effects up to $5,000 if this property is deducted from the probated or unprobated estate of the surviving spouse. If there is no surviving spouse, the exemption applies to adult or minor children.
Family support payments up to $9,000 are exempt if the decedent was a resident of Nebraska and supported a surviving spouse and minor children. These foods can be paid without order court-order”>court either in a lump sum or in installments. The family below time management of the farm.
Other deductions that can be taken are mortgage payoff and other debts, federal estate taxes on Nebraska property income tax, income and property taxes up to the date of the deceased’s death, the medical expenses of the last illness of the deceased, which occurred within six months from the date of death, funeral expenses, administrative expenses including commissions and fees of executors and administrators; and their reasonable fees.
After removing exemptions and deductions, the gross value is calculated for each beneficiary’s share of the estate. Beneficiaries are subject to inheritance tax to the extent that the portion of their net inheritance exceeds the amount of each exemption.
Credit can be obtained for a Nebraska estate by a decedent who received property from another person who died within five years of the decedent’s death. This credit is applied against the sum of the inheritance tax”>, which must be paid from the assets of the deceased’s estate. It is apportioned according to each the recipient’s portion of the Nebraska estate is subject to the inheritance tax.
Filing and payment
The executor or administrator of the estate must file an inventory of the estate with the Court of the country that has jurisdiction within three months from the date of appointment. Inheritance tax returns must be filed within 12 months of the deceased’s death, and any taxes owed must be paid. Town Treasures below this same time. If the taxes are not paid, the interest will be from the end of the twelfth month until the balance.
Sources:
Basha – NSBA probate form 500: http://probateforms.bashasys.com/nebraska
CCH Financial Planning Toolkit – Nebraska Estate Taxes: www.finance.cch.com
Nebraska Department of Revenue – Budget and Tax Basic Nebraska Inheritance Tax Laws: www.revenue.ne.gov/tax
University of Nebraska Lincoln – Cornhusker Economics – 2007 Legislature Repeals Estate Tax and Reduces Inheritance Tax, by Professor J. David Aiken: www.agecon.unl.edu
Report:
- Basha – NSBA approved form 500: probateforms.bashasys.com/nebraska
