Income in Respect of Decedent adds to the heirs' other income for the year involved. As such, it is taxed at the heirs' marginal tax bracket, and can even push them into a higher income tax bracket. Let's consider three kinds of accounts that might be inherited and consider the impact on the net inheritance. In Summary The above chart shows the possible depletion of assets for a person with a modest income. Careful planning could mean that your heirs enjoy more of the fruits of your labor.
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