Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Getting back to the original question -

Generally an inheritance is not taxable income to the recipient.

The main thing that IS taxable is an IRA or other retirement plan. A Roth IRA would retain it's tax-free nature, but will have required minimum distributions once inherited. For these retirement accounts, the taxable amount is the amount withdrawn from the plan, not the value of the account.

Pretty much everything else that you ordinarily see - houses, cars, investment accounts, cash, jewelry - those are not taxable income when inherited. I don't know all of the state income tax laws, but I'm not aware of any that include an inheritance as taxable income.

This is a separate question from an inheritance or estate tax. There is still a Federal estate tax, but it doesn't affect estates which are worth less than about $11 million. I believe a couple of states still have an estate or inheritance tax. These are based on the value of the estate or inheritance received. So you might want to check any state laws.

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.