Do You Have to Report an Inheritance as Taxable Income?

You may be concerned about taxes that your loved ones may have to pay when they receive their inheritances. We will examine some taxes that can come into play, but first, we should look at regular income taxes. There is usually very little good news to pass along with regard to taxation, but this case is an exception. In fact, an inheritance is not considered to be taxable income, so your loved ones would not have to report their inheritances when they file their returns. Plus, appreciated assets that are passed along at death get a step-up in basis for capital gains purposes. An inheritor who inherits appreciated assets would not be required to pay capital gains taxes on the gains that took place during the life of the decedent. Going forward, the capital gains tax could come into play if the assets continued to appreciate and the inheritor was to realize a gain. Estate Tax Though income taxes will not be a problem, the federal estate tax can be applied on large asset transfers. Ther
http://www.norcalplanners.com/report-inheritance-taxable-income/

Advertisements
Standard

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s