A Quick Guide To Estate And Inheritance Taxes In California
There is no inheritance tax in California. Since California was one of the states that saw their inheritance taxes phased down, the federal government passed the Economic Growth and Tax Relief Reconciliation Act.
That said, although you don't have to pay for inheritance tax, there might be taxation on other estate properties you or your family owns.
Even though, as previously stated, California did not have a state income tax in 2019, federal income tax legislation continues to apply. Also, the California legislature attempted to enact legislation that would have reintroduced the state's estate tax recently.
Instead, starting January 1, 2021, it imposed a new gift and generation-skipping tax on California residents.
To know more about property and asset taxation in California, consult with one of our prescreened Newport Beach Estate Administration Attorneys.
What Is The Difference Between California Estate Taxes And Inheritance Taxes?
Many individuals mix up an estate tax with an inheritance tax since they appear to be the same thing. The most important distinction between the two taxes, however, is who pays them.
When an estate tax is imposed, the tax is paid by the person who owns the estate. The person who inherits the property is liable for paying the inheritance tax.
This means that the estate owner is responsible for paying the estate tax, whereas the heir is responsible for paying the inheritance tax.
Between inheritance taxes and estate taxes, there is another distinction to be made. Both determine the fair market value of a decedent's property on the date of death, which is usually the day of death. Here's how they differ, though:
Before the estate's assets are distributed, an estate tax is imposed.