Being a resident of Arizona and wondering if you have to pay an inheritance tax is normal. Does Arizona have an inheritance tax? The simple answer is no. An Arizona resident does not have to pay an inheritance tax in the state. While there was an Arizona inheritance tax previously, the government permanently signed a bill and removed all inheritance, gift, and estate tax from the state.
However, it is important to remember that if a resident’s parents lived in a state where inheritance tax is legal, such as Pennsylvania and Kentucky, they might receive a tax bill from the particular state after confirming the inheritor. Also, don’t miss any tax deadlines in the future. Use Beem tax filing assistance to file all federal and state taxes across all filing statuses.
Do I Need to Pay Taxes on Inherited Property in Arizona?
Residents of Arizona who inherit family property from their parents are not required to pay inheritance property taxes. No matter the situation, whether they intend to sell the property or keep it for themselves.
Hence, residents can manage inherited wealth more freely without worrying about paying extra taxes.
Do Other States Impose Inheritance Taxes?
A few states have to pay inheritance tax after inheriting the property. Therefore, whether or not the inheritance will be taxed depends on where the person who died lived, not where the person who gets the inheritance lives. For example, if someone in Arizona gets an inheritance from their parents who also lived in Arizona or a state without inheritance tax, they won’t have to pay any tax on it. But if their parents lived in a state with an inheritance tax, like New Jersey, the person in Arizona might get a tax bill from that state after getting the inheritance.
States that impose inheritance tax are:
- New Jersey
Are There Time Limits for Selling Inherited Property in Arizona?
Arizona has no specific time limit for selling an inherited property. The inherited property can be sold whenever the probate process is concluded and the legal inheritor is formally recognized. This gives people who inherit property in the state the freedom to choose the best time to sell. It also allows inheritors to handle the sale of inherited property at their discretion after the probate process is concluded.
Are There Any Taxes on Gifts in Arizona?
No, there are no taxes on gifts in Arizona. Therefore, Arizonans can give gifts to others without worrying about paying extra taxes because the state does not impose one. Gifting amounts exceeding these limits to a single individual in a given year can impact your lifetime exemption of $12.92 million. This means that going beyond the yearly exemption may reduce the total amount you can gift throughout your lifetime without facing federal gift taxes.
Which States Have No Inheritance Tax?
All U.S. states except Lowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania do not have an inheritance tax. Therefore, individuals inheriting property in states other than those above six do not need to worry about paying additional taxes on their inherited assets. This lack of inheritance tax allows residents to manage inherited wealth without the financial burden of additional taxation.
In Arizona, residents benefit from not being required to pay inheritance, gift, or estate taxes. If you plan to move to Arizona, you can enjoy the significant advantage of not dealing with these taxes. However, it’s crucial to ensure that your parents are residents of Arizona or a state without inheritance taxes. Use Beem to file your taxes without any hassle and get the maximum refund on your returns.