When a South Carolina resident dies, the estate may have taxes deducted from its value before distribution to beneficiaries. These may include federal estate taxes, South Carolina estate taxes, death taxes in other states or nations, and federal and state income taxes. The size of the estate or the amount of income usually determines what taxes must be paid.
The filing requirements for the federal estate tax return are based on the total estate value for federal tax purposes. This is called the "gross estate". The gross estate is total assets located in South Carolina and elsewhere. A value of more than $600,000.00, then a federal estate tax return must be filed. Both the federal and South Carolina returns are due nine months after date of death. Even when a federal estate tax return will be required, no federal estate tax or South Carolina estate tax is imposed on property passing to a surviving spouse. An estate tax return does have to be filed in South Carolina if the estate is larger than $320,000 South Carolina estate taxes would have to be paid on all assets over $320,000 if none of them passed to the surviving spouse.
In addition, other states or other nations may have a legal right to impose a tax equal to their proportionate share of the state death tax credit allowed by the federal government.
Finally, income taxes also must be paid. The executor or administrator of the estate must file the decedent's final income tax returns with federal and state authorities and pay the taxes due. If the property in the estate continues to produce income, for example, from bank accounts or stocks, in excess of $600 per year, the executor or administrator of the estate may have to file additional returns for the estate on that continuing income. All income earned, whether by an individual before death or his estate after death, is reportable on the appropriate federal or state income tax return.
Failure by the Personal Representative of an estate to pay the proper income or estate taxes can result in the personal rep having to pay the money out of their own pocket.
It is thus quite important to get proper advice of what taxes may be due and when they are due.
This information was prepared to give you some general information on the law. It is not intended as legal advice about any particular problem. If you have questions about the law you should consult a lawyer. If you do not know a lawyer, you can call the South Carolina Bar Lawyer Referral Service weekdays between 9 a.m. and 5 p.m. The number is 799-7100 in Richland or Lexington Counties, and 1-800-868-2284 from other parts of the state.