A pal of mine is freaking out about a 1099-R he got. He inherited an IRA and his understanding is that inheritance is not taxable until you get to mega-amounts, which I believe is true. The amount is $91K. He is confusing estate and income taxes. Estate's must exceed a specific size (depending on the tax year and previous gifts) before estate taxes are due. It is independent of how much a single individual inherits. Most inherited assets receive a new basis. The new basis could be higher or lower than the cost. An inherited IRA does not receive a stepped up basis. Most contributions to a traditional IRA are pre-tax. It isn't likely, but he could ask the executor if there were after tax contributions to the IRA. The IRA administrator does not have that information.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Ra