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What Are Estate and Trust State Intangible and Real Estate Taxes?

Instead of income taxes, some states have intangible taxes on assets such as stocks and bonds. If you are administering an estate or trust, check to see whether your decedent’s state has intangibles taxes. If the estate or trust owns real estate, you must pay real estate taxes annually. Real estate, or property, taxes are based on the assessed value of the property. Challenge any property assessments that seem unfair.

State intangibles taxes

Some states have intangibles taxes rather than income taxes. Intangibles are those items of property that you can’t readily hold in your hand, such as stocks and bonds. With an intangibles tax, the market value of these items is tallied up once each year. Then the tax is calculated using a percentage of the market value. Check to see whether your decedent’s state has intangibles taxes.

Real estate taxes

If the trust or estate you’re administering owns real estate, you must pay the real estate taxes every year, either by paying the city or town directly or by making sure that you’re paying into an escrow account maintained by the bank that holds the mortgage on the property, if any.

Real estate taxes, also called property taxes, are calculated based on a property’s assessed value. This value is subject to reassessment at various times, including whenever the property changes hands or when the city or town in which the property is located decides to update all of its property assessments.

Don’t accept your new assessment if you feel it’s unjust. You’re entitled to question it. If the new assessed value seems unfair, submit your grievance, in writing and within a very short period after you’re notified of the change, to either the city assessor or town clerk.

Who you send your grievance to depends on the rules of your city or town, which should be clearly spelled out and sent with the new assessment. In some cases, a citywide reassessment might be, at a later date, completely thrown out as unusable if the valuations for similar properties vary widely and the assessor can’t provide adequate documentation for the valuations.

But in these cases, the overall assessment might only be questioned after the flood of grievances is received at city hall.

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