Question

We had an inheritance of roghly $300K in 2016, does this need to be filed on our taxes as it is under the threshold?

Forum|Forum|7 years ago
June 6, 2019
2 replies
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Employee

For the most part, an inheritance is not taxable or reportable on any tax return. There are exceptions (such as an inherited 401(k) from which you took a distribution). But for any exceptions you would have received some kind of tax reporting document by now, such as a 1099-R.

S

scottinphx

Also received 1041. What makes this a taxable event?

S

SweetieJean

Employee

You are confusing Inheritance tax (paid by the Estate) and Income tax (paid by you, the beneficiary). Income in respect of a decedent (IRD) is money (such as a retirement plan) was due to the deceased person, and passesl pass through to the recipient. The recipient (beneficiary) must declare the money as income in respect of a decedent (IRD) for any year in which income is received. It that sense, it is different than other inherited assets, such as a house, car, personal property, etc. https://taxmap.ntis.gov/taxmap/pubs/p559-004.htm