There are tons of things to keep in mind when it comes to real estate besides choosing a suitable property. Find out more regarding taxes in North Carolina:
What Is the Estate Tax?
The estate tax is a levy against the estate of an individual who is recently deceased before the money is transferred to their assigned beneficiary. This is assessed by the federal and state governments. Rather than being calculated on what the deceased person originally paid for their assets, these are calculated depending on the estate’s fair market value. The state in which the person was living at the time of their demise levies the tax. Some states have a federal estate tax and a local estate tax.
North Carolina and Estate Tax
Before 2013, if a North Carolina resident died with a large estate, it could’ve owed federal estate tax and a North Carolina estate tax. The federal estate tax had a state exemption amount tied to it, which meant that if an individual died in 2012 and owned estates worth up to $5.12 million, it would be exempted from federal and state taxes. However, if an estate went over the allotted amount, both taxes would be applicable.
There was also a marital deduction law. Property that was left to the surviving spouse was exempt from the state estate tax.
However, after being repealed in July 2013, North Carolina eliminated its estate tax. This repeal retroactively applied to all deaths from January 2013 onward. This means North Carolina residents only owe estate taxes to the federal government. As of this year, the federal estate tax exemption is $11.58 million, estates that are larger than this amount will owe federal estate taxes.
Federal Estate Tax
Although North Carolina doesn’t have any estate tax, the federal estate tax still applies.
In 2017, the tax law took effect, which is why in 2018, the federal estate tax exemption increased to $11.18 million. Before 2014, North Carolina had a progressive income tax; now, it’s at a flat rate of 5.499%.
This state also has the 21st-lowest property tax rate at 0.86%. Based on the county, the sales tax in the state ranges from 6.75% to 7.5%.
Real Estate in North Carolina
When dealing with a large estate, having the expertise of a professional can be helpful.
If you’re looking for an experienced and reliable real estate agent, Phillip Fehler, a Broker of Fathom Realty, is the one for you. His high-quality real estate services in Fayetteville and housing service in Fort Bragg, NC, Phillip can make the whole estate tax situation less stressful and more manageable.