According to the Comptroller of Maryland, four residents were recently identified as entitled to more than $564,000 in unclaimed property. Comptroller Peter Franchot publishes the list annually and this year it contained more than 80,000 unclaimed property accounts amounting to more than $61 million.
Maryland residents net big checks in unclaimed property
Each of the four individuals has been identified as the beneficiary of an account left through the estate of a family member. One, a woman from Baltimore, is due an insurance account holding more than $241,000. A man from Baltimore was discovered to be entitled to an account holding $80,000. A La Plata man is the recipient of a $157,200 account. The fourth recipient is to receive a disbursement of more than $85,000 from an account that his late father left to his late mother, who passed away earlier in the year.
The unclaimed property list is published and searchable by residents and any other curious people. The Comptroller’s Office goes a step further, however, by taking to the tax records to try to locate property owners who likely do not know about the funds. The office also makes appearances at events like the Maryland State Fair to allow people to search their database. Since January of this year, more than 33,000 claimants have recovered over $51 million. By the end of 2016, the Comptroller’s Office processed more than 43,000 claims topping $62 million.
Where does unclaimed property come from?
After any property has gone unclaimed or shown no activity for more than three years, the law requires financial institutions, businesses, or insurance companies to notify the Comptroller’s Office.
The most common sources of unclaimed property are bank accounts, stocks or dividends, wages, life insurance policies, or the contents of safe deposit boxes. Sometimes the unclaimed property is physical property rather than money and under state law, the items are appraised and sold on Ebay, with the proceeds being held for the owner.
Tax considerations regarding unclaimed property
When money turns up in an unclaimed funds database search, it is common to treat it as a windfall. Windfall or not, there can be tax implications to this found money.
When the funds are from income, such as a paycheck that was never picked up, the income is still taxable – income is income even if it was issued years ago. If the money is from a life insurance policy, it often is not taxable. When it comes from forgotten securities, the money may or may not be taxable. In short, a claimant should speak with a tax law professional to determine whether taxes are due on what can sometimes be a substantial treasure pot.
Comply with tax laws in Maryland
Newly found money can be the answer to an urgent need or simply a nice bonus, but either way, it may be subject to state and federal taxes. At Rosenberg Martin Greenberg, we specialize in how tax laws affect you. To discuss the income tax obligations of newly-discovered funds, call today to speak with dedicated Maryland tax attorneys.
Additional “Unclaimed Property” Resources:
- Comptroller of Maryland, Four Marylanders Discover More Than $564,000 in Unclaimed Property, http://comptroller.marylandtaxes.com/Media_Services/2017/08/09/four-marylanders-discover-more-than-564000-in-unclaimed-property/
- The Balance, 7 Places to Look for Unclaimed Money, https://www.thebalance.com/places-to-look-unclaimed-money-2388380