NJ Transfer Inheritance Tax is a “beneficiary” tax, and is based on who specifically receives a decedent’s assets, and how much each beneficiary received. The Estate Tax is based on the size of the entire estate, and does not break down the distribution of assets beyond exemptions for spouses and charities.
Transfer Inheritance Tax Overview
When someone dies, the assets he/she owns must go somewhere or to someone. When these assets are transferred from the name of the person who died (“the decedent”) to someone else (“the beneficiary”), the State of New Jersey may impose a tax on this “transfer” of ownership.
The amount of tax imposed depends on several factors:
- • Who the beneficiaries are and how they are related to the decedent;
- • The date of death value of the assets (and debts) that the decedent owned;
- • What kind of assets the decedent owned;
- • Whether the decedent lived in New Jersey or another state.
Note: Where the beneficiaries lived is not a factor.
There are two types of Inheritance Tax, resident and non-resident. This is based on where the person legally lived when he/she passed away.
Resident Decedents
Someone who died as a legal resident of New Jersey.
Almost anything a decedent owned can be taxed, depending on who inherits the decedent’s property.
This can include:
- • Houses or real estate;
- • Bank accounts;
- • Stocks;
- • Bonds;
- • Cars; and
- • Other Tangible Personal Property.
- • Source https://www.state.nj.us/treasury/taxation/inheritance-estate/filingrequirements-inheritance.shtml
