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Mother owned a property she sold and is carrying the note, I…

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Mother owned a property...

Mother owned a property she sold and is carrying the note, I will inherit this note if mom passes, do I pay income tax only on the interest still owed.

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Mother owned a property she sold and is carrying the note for 20 years. I will inherit the note if she passes. Do I pay income tax only on the uncollected interest?

Submitted: 10 months ago.Category: Tax
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9/25/2017
Tax Professional: Richard, Tax Attorney replied 10 months ago
Richard
Richard, Tax Attorney
Category: Tax
Satisfied Customers: 57,213
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Tax Professional: Richard, Tax Attorney replied 10 months ago

Good afternoon. Yes, that is correct. The principal amount is an inheritance and pursuant to Section 102 of the Internal Revenue Code, gifts and inheritance are not income and are not taxed as income. Only the interest would constitute income which would need to be included on your income tax return.

Thank you so much for allowing me to help you with your question. I have done my best to provide information which fully addresses your question. If you have any follow up questions, please ask! If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service as Good or Excellent (i.e., 4 or 5 stars)(hopefully Excellent/5 stars!). Otherwise, I receive no credit for assisting you today. I thank you in advance for taking the time to provide me a positive rating!

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Tax Professional: Richard, Tax Attorney replied 10 months ago

Good evening. Just following up. My screen indicates that you have not reviewed my response. Please let me know if you did not receive it so I can re-send it if necessary. Thank you! Richard

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