09 Aug Beneficiary: Will I owe inheritance tax?

Q. I recently inherited an IRA from my brother who died a month ago. He lived in Maine and I live in New Jersey. What do I have to pay inheritance taxes on? I received an IRA worth about $60,000.
— Beneficiary

A. We’re sorry to hear about the loss of your brother.

In terms of taxes, we have good news.

If your brother was not a resident of New Jersey and was a resident of Maine, the estate is not subject to New Jersey inheritance tax unless he owned real or tangible property in New Jersey, said Patricia Daquila, a certified public accountant with Lassus Wherley in New Providence.

“Only estates of decedents who are residents of New Jersey or estates of decedents who own property in New Jersey may be subject to the New Jersey inheritance tax,” she said. “Therefore, his IRA would not be subject to New Jersey Inheritance tax.”

If your brother was a resident of Maine, then his estate could be subject to Maine estate taxes, Daquila said.

However, Maine has not yet determined what the estate tax exemption will be for 2018, she said.

“In 2017, the taxable estate would have needed to be over $5.49 million dollars to incur an estate tax in Maine,” she said. “If his estate is under the $5.49 million dollars as of Jan. 1, 2017, then there would be no estate tax.”

Plus, there is no inheritance tax in Maine, she said.

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