Is There an Inheritance Tax in Florida?

Are There Other Tax Concerns Despite No Florida Inheritance Tax?

Yes, there are tax concerns for those who receive an inheritance in Florida in addition to the federal inheritance tax guidelines. Beneficiaries need to be mindful of the following situations:

Selling Inherited Assets:

When it comes time to sell inherited assets, there are taxes to consider. While the person receiving the property does not pay taxes at the time of inheritance, they are responsible for taxes on any appreciation from the date the asset was received.
For example, let’s assume you inherit a property that is worth $20,000. A year later, you decide to sell it for $25,000. You are responsible for the appreciation of the assets you inherited. In this case, $5,000 of the sale is treated as taxable income.

Inheriting from non-US citizens

Inheriting an estate from a non-US citizen can be tricky. The estate must go through probate in the country where the deceased lived. Once that process is complete, the estate will go through probate administration in the state of Florida.
Withdrawing funds from retirement accounts
Withdrawing funds from inherited retirement accounts creates a taxable event. Just as the deceased person was responsible for taxes on their retirement accounts, the person inheriting those assets is also responsible once they are sold. One exception to this rule is assets held in a Roth IRA. Any funds in a Roth account are not subject to taxes.

Receiving income from the estate

Any income received from the estate before the property is transferred and treated as federal income. For example, if a tenant pays rent on an inherited asset before the estate is settled, the rent is treated as taxable income.
For more information on how to best navigate Inheritance Taxes in Florida, schedule an appointment with one of our Instrumental Wealth specialists today.

A 401(k) is an investment account, typically acquired through your employer. A fixed amount of tax-deferred income is deducted from each paycheck and added to your retirement savings. In many cases, your employer will match your investment up to a predetermined amount. With a 401k plan, your retirement funds are finite. When you use up the money in your 401(k) account, there is no more.