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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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Why is the money receive from my parents estate reported on

Customer Question

Why is the money receive from my parents estate reported on a schedule k-1 being consider gross income?
Submitted: 6 months ago.
Category: Tax
Customer: replied 6 months ago.
Is There something I am doing wrong? I thought money from an estate in not part of your gross income?
Expert:  Lev replied 6 months ago.
While inheritance itself oi snot taxable - distributions from retirement plans received AFTER the person passed away - are classified as IRD - income in respect of the decedent - and are taxes the same way as received by the decedent were he/she alive.So that distribution is TAXABLE for you as a recipient.Examples of IRD include interest and dividends paid to the estate AFTER the date of death, distributions from tax deferred accounts (401k, IRA, annuity, etc), gain from the sale of inherited assets.Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. Income in respect of a decedent realized AFTER the death is taxable the same way as it were taxable for the decedent.
Customer: replied 6 months ago.
I am worried because I am on disability income, does this affect my monthly income?
Customer: replied 6 months ago.
are you there???
Expert:  Lev replied 6 months ago.
That will affect your TAXABLE income,but that is NOT your earned income - so your eligibility for disability benefits would NOT be affected.
Expert:  Lev replied 6 months ago.
However if you are receiving need based benefits - Medicaid, food stamps, etc - these are affected...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 with all tax related issues.

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