Tax Question, re: Inheritance & Paid Taxes

For the past 3 years my inheritance has been coming out little by little, from Kentucky. Each year taxes are paid to Federal & Kentucky, and my attorney conveniently skips NC, so I always have to pay them back at tax time for income.

My question is, at tax time should I be filing a Kentucky return too? I've been paying them taxes but haven't been filing any returns. Anybody ever been in this situation?

 

Never been in that situation but I'm pretty sure you should get a credit toward your NC taxes for what your pay to KY

 

First off let me say that death taxes stink and should be repealed. I am unfamiliar with Kentucky's tax code. If they have a higher rate than NC you may not have to pay anything in NC. Typically you should not have to pay tax in two different states on the same income. One should be a credit against the other. If you have been paying tax in both states I would question your accountant about it and if he does not have a good answer go to someone else.

 

So is this money in a brokerage account that has a Kentucky address? That what it sounds like. If so, are you taking distribution from that account and having taxes withheld at the brokerage firm where they would report them for you (Fed and State)?

 

I hired an estate attorney in Kentucky to handle everything for me when my Aunt died and left me named as executrix & sole heir. My Uncle (her brother) disowned me and threatened to contest the will (money-grubbing millionaire asshole that he is) and I had the estate sealed up tight to ensure he couldn't touch it. He (my Uncle) hasn't done anything, and my attorney is anxious to get me off his books, so he's been distributing the estate little by little, from the estate account.

Inheritance taxes, federal taxes & Kentucky state taxes have been paid (many times over in some cases where her 401K's were concerned) on the full estate and it's able to come out fully at any given time, except I know my Uncle and I still don't trust him. Long story there, but since he's a blood sibling, there's no statute of limitation in KY for his contesting the will.

So, yes, I guess. The monies are coming from an account in KY, and my attorney has been filing and paying the proper taxes. I'm pissed that I also get dinged with income taxes on top of all that, but there's nothing I can do about it except suck it up.

I'm just curious if I'm supposed to be filing a KY return since I'm paying into KY. It only makes sense...someone un-ban Wossa...I need an accountant.

 

I am an accountant but unfortunately this is not an area I am familiar with. I can recommend a guy who is pretty good if you want. Send me a PM if you want me to do that.

If you are paying in taxes to Kentucky then you probably need to file an annual return. You might get some money back from them.

 

That would be the main reason to file, if you are entitled to a refund, youre going to have to file a return in Kentucky to get it. They arent going to send you a letter telling you they owe you money.

 

Got a call from my attorney's office, and they're now sending me tax return papers to file with KY for 2006...so what about the taxes I paid in 2005 and 2004 that they didn't send me the return papers to file for?

I think I need a new attorney, apparently this one hasn't been doing all of his due diligence

 

you should be able to file those as well. those forms can probably be found online by doing a search.

as for the attorney, he/she wouldnt me mine any longer either.