Do you pay federal income tax on an inheritance? 8 Answers as of April 26, 2013

In my aunt's will, she left me $10,000. The estate was approximately 1MM. The attorney for the estate gave me a check for $8200 and said the rest, $1800, went to pay my income taxes. Is this right?

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Musilli Brennan Associates PLLC
Musilli Brennan Associates PLLC | John F Brennan
Something appears to be not here, generally you do not pay income tax on a gift or inheritance. However, I would have to look into details, as it is actually the provisions of the will or trust which will control whether or not any individual share might be assessed for taxes are paid by the estate.
Answer Applies to: Michigan
Replied: 4/26/2013
Kokish & Goldmanis, P.C.
Kokish & Goldmanis, P.C. | Bernard H. Greenberg
No, that is not correct unless your distribution was something known as "Income In Respect of a Decedent".
Answer Applies to: Colorado
Replied: 4/26/2013
Irsfeld, Irsfeld & Younger LLP | Norman H. Green
If you owed back taxes and have been dealing w/IRS, maybe. Otherwise: Did you get a Schedule K-1 that shows that this was withheld? In that case, you can file a return and get a refund or full credit for the $1,800 taxes having been paid? Are you sure he said income tax? Maybe it was estate tax? You have a right to an accounting; ask for a copy if you have not already gotten one. (Of course, if you waived it, then you may be SOL!
Answer Applies to: California
Replied: 4/26/2013
Arthur H. Geffen, P.C.
Arthur H. Geffen, P.C. | Arthur Geffen
Unless your share of the taxes of the estate were $1800, there should not have been anything withheld from your inheritance. An inheritance is generally not taxable in the recipient's income. On the other hand, the estate could owe income tax or estate tax and your share of that could be that $1800. I would need more information to give you exact advice.
Answer Applies to: Texas
Replied: 4/26/2013
Robert E. Giffin | Robert E. Giffin CPA
No this is not right unless IRS put a levy on the distribution.
Answer Applies to: Ohio
Replied: 4/26/2013
    Law Office of Nathaniel Landman | Nathaniel Landman
    In general most inheritances are free from income tax. Exceptions apply if the asset that is being inherited is a qualified asset like an IRA or annuity. Distributions from those types of qualified accounts can be subject to income taxes.
    Answer Applies to: Missouri
    Replied: 4/26/2013
    Reger Rizzo & Darnall LLP | Kathleen DeLacy
    Normally you would get a K-1 for the income only of the gift and normally specific bequests do not get this, only residuary beneficaries. I would check with your accountant to verify then contact the attorney back for the remainder of your bequest.
    Answer Applies to: Delaware
    Replied: 4/26/2013
    Vandervoort, Christ & Fisher, P.C. | James E. Reed
    No. Inherited money is not taxable income.
    Answer Applies to: Michigan
    Replied: 4/26/2013
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