Question

Is inheritance taxable? Received 1099-R from financial institution as my 25% inheritance of my mothers retirement funds. I used $ to open an IRA. with $

Forum|Forum|4 years ago
April 3, 2022
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TurboTax Deluxe Online

No, an Inheritance is not considered income for federal tax purposes, whether you inherit cash, investments, or property.

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S

SweetieJean

Employee

Since you received a 1099-R, it is considered to be "income in respect of a decedent." You must report it and pay taxes on it.

Further, if an inherited traditional IRA is from anyone other than a deceased spouse, the beneficiary cannot treat it as his or her own. This means that the beneficiary cannot make any contributions to the IRA, or roll over any amounts into or out of the inherited IRA.

Please clarify what type of retirement income your mother had, and whether you had your own earned income to qualify for an IRA of your own.