Quiz: The Ultimate Inheritance Quiz: Howstuffworks
The Ultimate Inheritance Quiz
4 Min Quiz
Image: refer to hsw
About This Quiz
2010 and 2011 have been the most exciting years in a long time for estate law. Depending on the time of death and the condition of their wills, the deceased's families had to deal with all kinds of changes -- some of them permanent, many only temporary. Now more than ever, it's important to know what you're dealing with when it comes to inheritance. Test your knowledge with our quiz!
What's the upper limit on a spouse's inheritance before it's subject to taxes?
A spouse who's a U.S. citizen may now inherit any amount tax-free. The problem only kicks in when the inheritance causes the spouse's estate to grow so significantly that their children can no longer inherit without taxes kicking in.
Distributions from an inherited IRA will incur how much of an early distribution penalty?
No matter how old you are, you don't have to pay a penalty on early distributions from an inherited IRA.
How soon do you have to return money borrowed from an inherited IRA before paying taxes or penalties?
For your own IRA, that period is 60 days. For an inherited IRA, all withdrawals are taxed.
How long do you have to disclaim a bequest?
You can disclaim up to nine months from the time of the bequest. That means either the time of death or when you turn 21.
How should you file your qualified disclaimer with the IRS?
Disclaimers are not a reportable transfer according to U.S. tax laws, but it's a good idea to file an "information only" return so everybody's on the same page.
How do you go about deciding who gets your inheritance if you disclaim it?
A major condition of a qualified disclaimer is that you have no say in where the inheritance goes after you opt out.
Before 2010, how much did the IRS's estate tax lawyers find owed to the government every hour, on average?
Before the Tax Act and IRS layoffs, the estate tax lawyers at the IRS made up its most productive division, finding an average of $2,200 in owed taxes for every hour of work.
Before the 2010 Tax Relief Act, how much could you leave your beneficiaries before taxes kicked in?
One million dollars was the limit on bequests -- over and above tax loopholes and shelters -- before 2010. The confiscatory tax could be as much as 55 percent in the highest bracket.
After the 2010 Tax Relief Act, when will taxes revert and the increases return?
Unless Congress acts before Jan. 1, 2013, the tax increases suspended in 2010 will come back automatically.
What interesting bequeathal did Shakespeare make to his wife?
Shakespeare's will hardly mentioned his wife, but he did leave her his "second best bed," for reasons on which we can only speculate.
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