Question

I received some money (cash) from the passing of a relative. I live in a state that taxes inheritance. Where do I enter that money in TurboTax on the state form?

Forum|Forum|7 years ago
June 5, 2019
6 replies
0 views

I realize that the Federal tax doesn't count inheritance but I live in Iowa and they do. I am not seeing where in the TurboTax website that I can enter income that comes from inheritance.

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ScruffyCurmudgeon

Employee

Inheritance Taxes, nor Estate Taxes, are part of the Federal Income Tax system.

If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67 NOT INTUIT EMPLOYEE USAR 64-67 AIS/ASA MOS 9301 - O3 - Just donating my time**Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.

J

jbarndAuthor

Hi, thank you for your reply. If you read my question carefully I am asking about the State form, not federal.

ScruffyCurmudgeon

Employee

Yes, understood, but added to reinforce to other readers who may come across this correct answer that inheritance tax is not related to income tax - unfortunately a very common misconception and therefore common question

If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67 NOT INTUIT EMPLOYEE USAR 64-67 AIS/ASA MOS 9301 - O3 - Just donating my time**Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.

ScruffyCurmudgeon

Employee

Inheritance Taxes such as in Iowa have nothing to do with income tax and TurboTaqx supports filing income tax returns only.
If you were to do a simple search of Iowa taxation you would find:
<a rel="nofollow" target="_blank" href="https://tax.iowa.gov/sites/files/idr/forms1/IA706Instructions%2860066%29.pdf">https://tax.iowa.gov/sites/files/idr/forms1/IA706Instructions%2860066%29.pdf</a>
<a rel="nofollow" target="_blank" href="https://tax.iowa.gov/sites/files/idr/forms1/IA706%2860008%29.pdf">https://tax.iowa.gov/sites/files/idr/forms1/IA706%2860008%29.pdf</a>
These form are meant to be filled out by hand!

If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67 NOT INTUIT EMPLOYEE USAR 64-67 AIS/ASA MOS 9301 - O3 - Just donating my time**Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.

ScruffyCurmudgeon

Employee

RE: IOWA Inheritance Tax (not Income Tax!) - IOWA ANSWER ONLY

It is important to know who is to receive property and the value of the property, because the Iowa inheritance tax is based upon each share of the estate. The tax is based upon a person’s (beneficiary’s) right to receive money or property which was owned by the decedent at the date of death.

The entire amount of property, interest in property, and income passing solely to the surviving spouse, lineal ascendants, lineal descendants, and stepchildren and their lineal descendants (for deaths on or after July 1, 2016) is exempt from tax. Lineal ascendants include parents, grandparents, and great grandparents. Lineal descendants include children, grandchildren, and great grandchildren, whether biological or legally-adopted

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State Inheritance Tax, and Federal or State Estate Tax, are not a part of the Income Tax system.

TurboTax only supports Income Tax filings.
Inheritance Taxes and Estate Taxes are not allowable deductions, in general, on Income Tax filing

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The ONLY STATES with INHERITANCE TAX on bequests to beneficiaries are:

Iowa - no tax assessed if decedent's estate is under $25,000
Kentucky
Maryland -lowest top tax inheritance tax rate pf 10%; small estates of under $30,000 exempt
Nebraska -highest top tax inheritance tax rate pf 18%
New Jersey
Pennsylvania

All six states exempt spouses, and depending on state, exemption varies for immediate relatives.

If this posted response is useful to you, please click on the upraised hand in the lower left of this post. Thank you. Scruffy Curmudgeon--PFFM/ IAFF, retired FireFighter/Paramedic - Locals 718/30, Veteran USAR O3 AIS/ASA '65-'67 NOT INTUIT EMPLOYEE USAR 64-67 AIS/ASA MOS 9301 - O3 - Just donating my time**Say Thanks by clicking the thumb icon in the lower left corner -it means nothing but makes those than answer feel wanted.

D

DanaB27

The inheritance tax won't be included on your state income tax return. You will have to file an Inheritance IA 706 Return 60-008. See An Introduction to Iowa Inheritance Tax for detailed information.

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J

jbarndAuthor

Hi, thank you for your response. Looks like a Schedule K-1 form was submitted by the estate attorney. Would that be sufficient for reporting of income? I also read that grand children are exempt from inheritance tax in Iowa.