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I received some money from my mother when she died this year(80,000).

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Will I have to pay...
I received some money from my mother when she died this year(80,000). Will I have to pay taxes on this as income or? , and should I put the money in an IRA , or some other type of account ?
Submitted: 7 years ago.Category: Tax
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Answered in 1 minute by:
1/1/2010
Tax Professional: Merlo, Accountant replied 7 years ago
Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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HelloCustomer

 

Can you please tell me if the money your mother left you was in a regular savings or checking account, or was it part of an IRA or other tax deferred account such as a 401k plan?

 

Also, what state do you and your mother live in?

 

 

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Customer reply replied 7 years ago
the money came from her estate which had various investments, but I think the check I recevied was from a checking account used to distribute the funds to us children. we live in Oregon.
Tax Professional: Merlo, Accountant replied 7 years ago

Hello againCustomer

 

There is no inheritance tax at the federal level. Instead, the IRS imposes estate taxes on any estates which exceed a certain value. That value is currently set at $3.5 million. If your mother's entire estate was valued at less than that amount, then no estate taxes are due. The state of OR does have a separate inheritance tax, but it does not apply to estates with a value of $1 million or less.

 

If your mother's estate exceeded the allowed federal or state limits, then the estate itself would pay taxes and the remaining assets would pass to the beneficiaries without further tax being due. The only exception to this would be if the money you inherited came from a tax deferred retirement plan such as an IRA account. If that were the case, you would have to pay regular income taxes when you withdrew that money.

 

However, if you received a check from the estate for these funds, then it is not likely that this money was part of a retirement fund. But check with the executor of the estate to make sure of the original source of those funds.

 

If this was helpful please press the Accept button. Positive feedback is also appreciated.

 

Thank youCustomer/p>

 

 

Merlo
Merlo, Accountant
Category: Tax
Satisfied Customers: 9,783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
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