Small Inheritance - Tax Liability?
#1
Small Inheritance - Tax Liability?
As many of you know, I lost both of my parents last year, Dad at the end of January and Mum in September. Well, I got a small inheritance from my Dad (half of his 50% of the home they lived in) to the amount of a little under $40,000.
This was transferred from the UK by the solicitor to my bank account and it showed up today. My question is, will IRS have ant interest in the for of tax or, as it's an inheritance, is there no tax liability?
We intend to save as much as possible and convert some of it into IRAs, but would like to know so that come next April, when it's all been 'dispersed', there are no nasty surprises!
We've always been relatively poor. Not paycheck to paycheck, but not well planned for the future, so I'd love to hang on to as much of it as possible and for as long as possible!
This was transferred from the UK by the solicitor to my bank account and it showed up today. My question is, will IRS have ant interest in the for of tax or, as it's an inheritance, is there no tax liability?
We intend to save as much as possible and convert some of it into IRAs, but would like to know so that come next April, when it's all been 'dispersed', there are no nasty surprises!
We've always been relatively poor. Not paycheck to paycheck, but not well planned for the future, so I'd love to hang on to as much of it as possible and for as long as possible!
#2
Re: Small Inheritance - Tax Liability?
I had a more substantial inheritance from my aunt in Germany several years ago and no, IRS was not interested in the amount. Did not have to list it on tax forms. Only interested earned on those funds during the tax year was taxable.
#3
Re: Small Inheritance - Tax Liability?
As many of you know, I lost both of my parents last year, Dad at the end of January and Mum in September. Well, I got a small inheritance from my Dad (half of his 50% of the home they lived in) to the amount of a little under $40,000.
This was transferred from the UK by the solicitor to my bank account and it showed up today. My question is, will IRS have ant interest in the for of tax or, as it's an inheritance, is there no tax liability?
We intend to save as much as possible and convert some of it into IRAs, but would like to know so that come next April, when it's all been 'dispersed', there are no nasty surprises!
We've always been relatively poor. Not paycheck to paycheck, but not well planned for the future, so I'd love to hang on to as much of it as possible and for as long as possible!
This was transferred from the UK by the solicitor to my bank account and it showed up today. My question is, will IRS have ant interest in the for of tax or, as it's an inheritance, is there no tax liability?
We intend to save as much as possible and convert some of it into IRAs, but would like to know so that come next April, when it's all been 'dispersed', there are no nasty surprises!
We've always been relatively poor. Not paycheck to paycheck, but not well planned for the future, so I'd love to hang on to as much of it as possible and for as long as possible!
#4
Re: Small Inheritance - Tax Liability?
Your good to go.
No liability.
I believe you don't even need to report it.
No liability.
I believe you don't even need to report it.
#6
Re: Small Inheritance - Tax Liability?
It depends potentially on the state where you live, a few levy a tax on inheritances, even though, as you have been advised above, the IRS does not. I don't think that GA (you're in GA, right? ) levies a tax on estates, but you should check.
#7
BE Forum Addict
Joined: Aug 2013
Location: Athens GA
Posts: 2,134
Re: Small Inheritance - Tax Liability?
#9
Re: Small Inheritance - Tax Liability?
Yes, I'm in Georgia and this is great news.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
#10
Re: Small Inheritance - Tax Liability?
Yes, I'm in Georgia and this is great news.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
#11
Re: Small Inheritance - Tax Liability?
Well it must certainly have made for an "interesting" marital relationship!
#12
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: Small Inheritance - Tax Liability?
Yes, I'm in Georgia and this is great news.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
#13
Re: Small Inheritance - Tax Liability?
But surely it would become a marital asset, to be split in the event of a divorce, the moment it hit a bank account?
#14
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: Small Inheritance - Tax Liability?
Not if you don't commingle it with community assets (i.e you have a bank account in your own name which many couples do) or you can trace the origin of the separate property funds. Additionally, some "high net worth" couples will address future inheritances in a pre-nup to spell out that they get treated as separate property, often so that something of value to a family can get passed down to heirs with no risk of division.
Last edited by Giantaxe; Feb 14th 2019 at 4:14 pm.
#15
Re: Small Inheritance - Tax Liability?
Yes, I'm in Georgia and this is great news.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
Interestingly, my SO was talking to a co-worker about this and she said 'Oh, when Gary got an inheritance, he said it was his money and spent it on stuff for himself'! Whilst I guess I could have done that, it was never a question as all our money has always been 'communal' an we both can use it.
We have only just finished spending the frequent flyer miles I racked up then though.