When an individual dies, his/her estate will be subject to asset inventory, which will determine his/her total assets and the value of these assets. This procedure is necessary for taxation purposes. In the event that an individual’s estate exceeds a certain value, it may be subject to estate tax when it is inherited. This depends upon the state in which the deceased individual lived prior to death. It may also be necessary to file a tax return on total assets.
The laws and regulations regarding estate taxes vary from on state to another. Therefore, it is important that an individual review the taxation laws in his/her state. In addition, an individual may also need to file a federal tax return on total assets, depending upon the value of the deceased individual’s estate.
In the United States, if the estate of a deceased individual exceeds $2 million, a federal tax return on total assets must be filed with the Internal Revenue Service. In 2010, laws regarding estate taxation lapsed, and therefore, a federal Estate Tax Return is not necessary for the estates of individuals who die in 2010.
Other taxation regulations vary by state. For example, if a deceased individual lived in the state of New Jersey, and his/her estate is valued at more than $675,000, then it is necessary to file an Estate Tax Return for New Jersey. Therefore, a deceased individual’s total assets will be assessed. This includes all property, such as motor vehicles, real estate, jewlery, personal property, pensions and funds located in savings accounts, banks accounts, retirement funds.