The passing of a loved one is a difficult and emotional time for anyone. Amidst the grieving and mourning, there are also practical matters that need to be addressed, such as taxes. If your loved one owned property in New York and has passed away, you may be wondering about estate taxes and what needs to be filed. In this blog post, we'll discuss the basics of estate taxes in New York and what you need to know after the passing of a loved one.
What Are Estate Taxes?
Estate taxes, also known as inheritance taxes, are taxes on the transfer of property and assets after someone passes away. In New York, estate taxes are imposed on the estate of a deceased person if the value of their estate exceeds a certain threshold. This threshold is currently $5.93 million for deaths occurring on or after April 1, 2020. This means that if the total value of your loved one's estate is less than $5.93 million, there will be no estate taxes to pay.
Personal Taxes for the Deceased
When someone passes away, their personal taxes still need to be filed for the year of their passing. In your case, since your mother passed away in 2021, her personal taxes for that year will need to be filed. This includes any income she received, such as pensions and Social Security payments. As the administrator of her estate, it is your responsibility to file her personal taxes on her behalf.
If your mother has a will, you will need to file her taxes as an individual. However, if she did not have a will, you will need to file her taxes as a part of her estate. It is important to consult with a tax advisor or accountant to determine the best course of action for your specific situation.
Estate Taxes for the Sale of a House
In addition to personal taxes, you mentioned that the estate also sold the house this year. This means that there may be estate taxes to pay on the sale of the property. In New York, real estate is considered part of an individual's estate, and therefore, subject to estate taxes if the total value of the estate exceeds the threshold mentioned above.
However, there are certain exemptions and deductions that may apply to reduce the taxable value of the estate. It is important to consult with a tax advisor or accountant to determine the exact amount of estate taxes that may be owed on the sale of the house.
Seeking Guidance from a Tax Advisor
As you mentioned, you have reached out to your personal accountant for guidance. However, if they have not responded, it may be beneficial to seek the advice of a tax advisor who specializes in estate taxes. They will be able to provide you with personalized guidance and help you navigate the complex tax laws and regulations in New York.
Furthermore, if you are the administrator of the estate, it is important to understand your legal and financial responsibilities. A tax advisor can also assist you in fulfilling these duties and ensure that all necessary taxes and filings are completed accurately and on time.
The passing of a loved one is never easy, and dealing with taxes can add to the stress and burden. However, by understanding the basics of estate taxes in New York and seeking guidance from a tax advisor, you can ensure that all necessary taxes and filings are done correctly, allowing you to focus on honoring your loved one's memory. Remember, every situation is unique, so it is always best to consult with a tax advisor for personalized advice.