Have a Tax Question? Ask a Tax Expert
To address your main question - if you realize the taxable income - it will be included into your gross incomeWe may not avoid that by purchasing another property.As soon as funds from 401k are distributed - that amount becomes taxable.
So - what we may do - estimate your possible tax liability.For 401k distribution - the full distributed amount is taxable as regular income
For mutual fund shares - we need to estimate a gain
The basis for inherited assets is the fair market value of shares when your mother passed away.
Then we adjust the basis by any reinvested dividends and distributions.
The gain is calculated as (selling price) MINUS (adjusted basis)
I appreciate if you take a moment to rate the answer.
Experts are ONLY credited when answers are rated positively.
If you still have any doubts, need clarification - please be sure to ask.I am here to help you will all tax related issues.