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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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My mother won a settlement award in a mesh case injury

Customer Question

My mother won a settlement award in a mesh case injury lawsuit. Unfortunately she passed away before the case was finalized and the award was distributed so the award became part of her estate. My mother had no insurance or any other assets. In fact, I had to pay for her funeral out of my pocket. The final amount of the award after all the lawyers fees and costs, was around $58,000. We live in Texas where I believe there is no inheritance tax. My question is, will we be responsible to pay taxes out of this inheritance.
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

For INCOME tax purposes inheritance is not taxable income in the US regardless the amount - as a recipient of inheritance you do not need to claim it as income.

There is no any amount limit.

Please see for reference IRS publication 525 -

http://www.irs.gov/pub/irs-pdf/p525.pdf

Gifts and inheritances. In most cases, property you receive as a gift, bequest, or inheritance is not included in your income. However, if property you receive this way later produces income such as interest, dividends, or rents, that income is taxable to you....

Not to mention that the settlement award because of personal injury is not taxable for your mother's estate.

Any questions?

Expert:  Lev replied 1 year ago.

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