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The IRS evaluates the estate tax exemption annually. The federal estate exemption was $12.92 million in 2023, increasing to $13.61 million in 2024. Estates valued at less than these thresholds aren't subject to federal taxes, although individual states have their own rules.
Capital Gains Tax: Capital gains tax is imposed when you sell the house, not while inheriting it. The IRS (Internal Revenue Service) authority levies the tax on a stepped-up basis. Hawaii imposes the standard capital gains tax at a flat rate of 7.25%.
The Hawaii estate tax exemption, like the federal exemption, is a tax exemption that reduces the amount of estate taxes that must be paid. At the state level, the exemption is $5,490,000; in other words, you will pay no Hawaii estate tax on estate transfers up to that value.
Hawaii does not levy an inheritance tax. Inheritance laws in other states may apply to you, however, if you receive an inheritance from someone who lives there. Kentucky, for instance, applies its inheritance tax to all property inside the state, even if the inheritor is living out of state.
You must file monthly if you will pay more than $4,000 in GET per year. You may file quarterly if you will pay $4,000 or less in GET per year. You may file semiannually if you will pay $2,000 or less in GET per year.
Form A-6 may be used to get both a state tax clearance and a federal tax clearance. If you need to get a tax clearance from both agencies, you should submit a separate Form A-6 to each agency. (By appointment only. To make an appointment, please call 844-545-5640.)
Hawaii Estate Tax Exemption At the state level, the exemption is $5,490,000; in other words, you will pay no Hawaii estate tax on estate transfers up to that value.
In Hawaii, the first $5.49 million of the estate is not taxed. On the portion that exceeds $5.49 million, the estate tax rate ranges from 10% to 20%. (Compare these rates to the current federal estate tax rate of 40%.)