Message Font: Serif | Sans-Serif
No. of Recommendations: 2
crre:so what is an early inheritance?
For tax purposes, there is no such thing.

Peter is correct, of course, but I've also heard the term thrown around loosely, in "as if" or "sort of" type terms.

Gifts and inheritances are different events, in that gifts happen during the donor's lifetime, and an inheritance occurs at death.

In the simplest terms I can think of, "Inheritances", and all other transfers at death, regardless of the means, by will or otherwise, are subject to the estate tax if the amount if high enough. And the amount is pretty high right now - over $11 million. BUT - that amount also includes the donor's taxable lifetime gifts, in excess of the annual exclusion amount of $15,000. So lifetime gifts can make the eventual estate tax, if there is one, higher. And gifts over the annual exclusion are reported on a gift tax return, but are not immediately payable, until the total exemption is used up. And on gift tax returns, you keep a running tab on that number.

So that's how terms like "advance inheritance" come into play, though not technically accurate.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.