Get Ia 706

Iowa does have an inheritance tax, which beneficiaries are responsible for paying on their inheritance. There are a number of categories of inheritor for the inheritance tax, but only two are relevant for individuals: Tax Rate B: This is for siblings, half-siblings and children-in-law.

For purposes of computing the tax, all property includible in the gross estate must be valued at the time of the decedent's death. The fair market value of an item of property, both real and personal, that is included in the gross estate for inheritance tax purposes is expressed in the property's monetary equivalent.

$0-$12,500 has an Iowa inheritance tax rate of 5%. $12,501-$25,000 has an Iowa inheritance tax rate of 6%. $25,001-$75,500 has an Iowa inheritance tax rate of 7%. $75,001-$100,000 has an Iowa inheritance tax rate of 8%.

Other relatives are exempt up to $15,000 ($40,000 in 2023) and unrelated heirs up to $10,000 ($25,000 in 2023). Prior to 2023, the tax rates above those exemptions are 1%, 13%, and 18%, respectively. Starting in 2023, those rates rise to 1%, 11%, and 15%, respectively.131415.

Exemptions From Iowa Inheritance Tax If the deceased person's "net estate" (discussed below) is worth $25,000 or less, no inheritance tax is due. (Iowa Code Ann. § 450.4.) Additionally, no inheritance tax return is required if the inheritors are exempt from inheritance tax.

The following relations owe no inheritance tax when they inherit money from a deceased relative: parents, grandparents, great-grandparents, children, stepchildren, grandchildren, great-grandchildren and any other lineal ascendants or descendants.

Estate and inheritance taxes are taxes levied on the transfer of property at death. An estate tax is levied on the estate of the deceased while an inheritance tax is levied on the heirs of the deceased.

If the decedent's estate has been probated, the personal representative (executor or administrator) must file the return with the Iowa Department of Revenue. If the personal representative fails to file the return or if the estate is not probated, the beneficiary must file the return.