How Much is Inheritance Tax in Nevada?
Taxes are often characterized as being in the same unavoidable category as death, but this is not always the case. If you live in Nevada, you shouldn’t worry too much about the issue of inheritance tax, because the Nevada Revised Statutes do not have provisions that allow such taxation.
Years ago, state legislators in Nevada moved to change the previous stance of what was known as a sponge tax. Prior to 2005, the Nevada used to impose a tax that was collected from assets individuals owned at time of death. The sponge tax was similar to an estate tax, but it was actually collected from a portion of the federal death taxes collected by the IRS.
Sponge taxes were also called pick-up taxes; they collected amounts indicated on IRS Form 706, which is used as an estate tax return. If filing this form indicated a credit, the revenue collection agencies of some states moved to apply the pick-up tax based on this amount. It is important to note that Form 706 has been amended and no longer has a section to figure out a tax credit. Therefore, sponge taxes have been eliminated.
Inheritance tax differs from estate tax in the sense that beneficiaries are expected to pay assessments for the gifts and assets they receive. Estate taxes are paid by administrators, executors or personal representatives appointed by the decedent or by the court. Inheritance taxes, on the other hands, are paid by heirs and survivors who benefit from wills.
The Economic Growth and Tax Relief Reconciliation Act did away with the sponge tax. In 2010, the Tax Relief Act extended the provisions that made the sponge tax go away five years earlier, and tax analysts do not believe that this specific form of taxation will return during a Donald Trump presidency.
As the situation currently stands, Nevada does not collect inheritance tax or estate tax. This makes the Silver State one of the friendliest for retirees; moreover, certain statutory provisions such as irrevocable trusts make this state one of the most ideal for state planning, asset protection, and wealth management.
For any of your legal needs from inheritance taxes to help with probate in Las Vegas, contact us via our website or call (702) 337-3000 for more information.