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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10109
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Receiving an inhertitance in sections. Have about $330 in

Customer Question

receiving an inhertitance in sections. Have about $330 in previous years taxes due. presently working with IRS through an attorney. Would like to protect inheritance
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

...

First, an inheritance MAY not be subject to taxes at all ...

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The executor/trustee/other fiduciary should file a 1041 (Estate's income tax return) only if the estate has $600 or more in TAXABLE income.(OR if there is a non-resident beneficiary)

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If there ARE no items of taxable income (rents' dividends, interest) then what's being transferred to you is simply principal (not taxable)...

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IF there are items of income, then the fiduciary has the choice of having the ESTATE pay the taxes on the 1041 OR distrributing to the beneficiary (you) and having you (at the much lower income tax rates) pay the taxes on that income.

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Only the estate, OR YOU, pays the taxes ... not both.

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Now, if the estate is worth more than $5,430,000, then there could be estate taxes... But those taxes are borne by the estate, not the benefiiaries.

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Hopefully this provides a foundation ... let me know your questions from here...

...

Lane

...

Expert:  Lane replied 1 year ago.
Hi,
….
I'm just checking back in to see how things are going.
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….
Lane
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