Community Property Inheritance

CFA Level III
#1

Do you NOT have to pay inheritance tax if you inherit by community property inheritance when your spouse dies?

I am talking about 2015 AM Exam Question Number 7. It seems like Jack didn’t have to pay tax on community property, but had to pay tax on additional bequest…

I am a bit confused why Jack doesnt pay inheritance tax for community property, but pays inheritance tax when his wife actively bequeathes additional amounts to him…

#2

Because it is clearly stated that inheritance under community property is tax free. The biggest challenge in AM is carefully read all facts in question and distinguish from irrelevant ones.

#3

Thanks.

#4

I have a problem with part B of the same Q- I took the after tax amount of the salary and deducted the living expenses and tuition from it. I am wondering why the taxes are not deducted in the answer here?

#5

bump