My mother-in-law passed away. Do we have to fill out inheritance tax forms?
Q. My mother-in-law passed away last December and left a small estate to share with the family. After reading the tax forms, I’m not sure if the estate requires a deposit. All beneficiaries are class A. Gross assets are classified as personal property according to Schedule B-1 for a total of approximately $ 32,000. The most important asset was his mobile unit, which was sold in March 2021. Estate settlement costs were approximately $ 9,000 as permitted in Schedule D, including funeral costs. , medical expenses after death, debt settlement, court costs, valuation of personal property costs and real estate agent’s commission. So, is the filing of inheritance tax mandatory?
– To try to understand
A. We are sorry to hear of your loss.
Here’s what you need to know.
There is no inheritance tax when all the beneficiaries are Category A beneficiaries, which include a spouse, domestic partner, grandparents, parents, children, grandchildren and stepchildren, said Catherine Romania, estate planning lawyer at Witman Stadtmauer in Florham Park.
When a return is required, she said, you file Form IT-R, New Jersey Residents’ Inheritance Tax Return within eight months of the date of death, or within 14 months if validly extended, although extensions can only be requested if they are timely filed before the due date for the declaration.
One of the reasons that a return may be required is to obtain a waiver the privilege the state has over a deceased’s estate for any potential tax owed, she said.
“In the case of immovable property, the waiver may be obtained instead by depositing Form L-9, Property Tax Waiver Affidavit; Deceased resident“Romania said.” Financial institutions are authorized to disburse funds to Category A beneficiaries upon receipt of Form L-8 – Self-executing waiver – where all the funds in the account are remitted to category A beneficiaries. “
Waivers are not required for personal property such as household goods and automobiles, she said.
Romania said a mobile or prefabricated home is taxed as real estate when it is attached to land by a foundation and connected to utility systems. Otherwise, a mobile home is titled and treated the same as a motor vehicle.
“Presumably, the mobile home in your mother-in-law’s estate was not treated as real estate because the buyer did not request the waiver,” she said. “In summary, the IT-R form is not necessary if all beneficiaries are Class A beneficiaries – and not confident – and if exemptions are not required or if the L-8 and L-9 forms are sufficient.
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Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com‘s weekly electronic newsletter.