k37814
Jan 28, 2008, 06:57 AM
My husband received inheritance inthe form of money (no real property). Does this money have to be reported on our tax return? Was less than $100,000.
k37814 Jan 28, 2008, 06:57 AM My husband received inheritance inthe form of money (no real property). Does this money have to be reported on our tax return? Was less than $100,000. ScottGem Jan 28, 2008, 07:00 AM AtlantaTaxExpert Jan 28, 2008, 12:13 PM Scott: If the estate sells ANY asset in order to distribute money rather than the asset itself, the ESTATE pays any capital gains by filing Schedule D with a fiduciary return (Form 1041). While the heirs may requst a copy of that fiduciary return, it in no way affects their tax return. They get the distribution completely and totally tax-free UNLESS the executor screws up and fails to pay the required estate taxes. Then (and only then) will the IRS or state go to the heirs for any of the taxes that are due from the estate. MukatA Jan 29, 2008, 08:52 AM Any thing (money and property) you receive as gift or inheritance, you (the receiver) don't pay any federal tax. Exception: If you inherit a traditional IRA, you are called a beneficiary. Beneficiaries of a traditional IRA must include in their gross income any taxable distributions they receive. For any State tax liability check at your State's web site. For most of the States there is no tax. If you received the inheritance from foreign sources, then you may need to file the form 3520. AtlantaTaxExpert Jan 30, 2008, 08:28 AM I forgot about the traditonal IRA exception. But, other than that and the possibility of the executor NOT paying estate or inheirtance taxes, inheritances are normally FREE of income taxes. Copyright ©2005-, Ask Me Help Desk
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