Taxes on inheritance | TigerDroppings.com

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theantiquetiger
LSU Fan
Dutchtown
Member since Feb 2005
6350 posts

Taxes on inheritance



I just inherited a good some of money, all in bonds, stocks, and mutual funds.

People keep telling me the government does not tax inheritances anymore (under $1.5M). I am guessing this only applies to cash, not stocks and bonds.

I do have to take out a minimum each year because it is not a spousal inheritance, but if I decided to cash all or some of it out, will I pay taxes on it?







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tigerrocket
LSU Fan
Member since Aug 2008
90 posts

re: Taxes on inheritance


Sounds to me like you were the beneficiary of a retirement account. If so you will pay income tax on the amount you take out of the inherited or beneficiary IRA. (Make sure this is set up correctly). If you are a non-spouse you will be required to take a minimum distribution each year based on your life expectancy. As long as the total estate is under 5 million, there should be no estate tax.





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theantiquetiger
LSU Fan
Dutchtown
Member since Feb 2005
6350 posts

re: Taxes on inheritance


quote:

Sounds to me like you were the beneficiary of a retirement account. If so you will pay income tax on the amount you take out of the inherited or beneficiary IRA. (Make sure this is set up correctly). If you are a non-spouse you will be required to take a minimum distribution each year based on your life expectancy. As long as the total estate is under 5 million, there should be no estate tax.


Thats what I thought






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rmc
LSU Fan
Zachary, LA
Member since Sep 2004
22608 posts

re: Taxes on inheritance


quote:

I just inherited a good some of money, all in bonds, stocks, and mutual funds.

People keep telling me the government does not tax inheritances anymore (under $1.5M). I am guessing this only applies to cash, not stocks and bonds.

I do have to take out a minimum each year because it is not a spousal inheritance, but if I decided to cash all or some of it out, will I pay taxes on it?


Inheritance is not generally not taxable in the state of Louisiana. If the deceased died in 2012, their estate would have to be over 5m to be taxable on the federal level.

Your last sentence leads me to believe that you are the beneficiary of some tax advantaged account which will have its own rules by law. You will want to see a CPA.






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Poodlebrain
LSU Fan
Way Right of Rex
Member since Jan 2004
15728 posts

re: Taxes on inheritance


Any taxes on the estate would have been paid before you inherited. So you owe nothing with respect to the total amount you received. However, from your last sentence it is clear that among the assets you inherited were funds in a retirement account. As you withdraw money from the account you have to pay income tax on the amounts withdrawn. This is done because the money was deposited into the retirement account without having been taxed as income to the decedent. If any estate taxes were paid on the estate, then you should be entitled to a deduction for the portion of the estate taxes paid with respect to the retirement account assets you inherited.

In other words, ask the executor of the estate for a copy of the 706 filed for the estate. This will enable your accountant, or other tax preparer, to determine whether, or not, you are entitled to a deduction for estate taxes on income with respect to a decedent.






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Tigerpaw123
USA Fan
Louisiana
Member since Mar 2007
9379 posts

re: Taxes on inheritance


What type of bonds? We just went through this with savings bonds and learned a lot of good info





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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7136 posts
 Online 

re: Taxes on inheritance


quote:

As long as the total estate is under 5 million, there should be no estate tax.


Some states have state and county inheritance taxes for non-spouses that can be pretty hefty. Fortunately Louisiana isn't one of them.






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Newbomb Turk
Navy Fan
perfectanschlagen
Member since May 2008
9961 posts

re: Taxes on inheritance


quote:

What type of bonds? We just went through this with savings bonds and learned a lot of good info


I have a friend who inherited some Series-EE bonds a few years back. More damn trouble than they were worth.






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Tigerpaw123
USA Fan
Louisiana
Member since Mar 2007
9379 posts

re: Taxes on inheritance


quote:

I have a friend who inherited some Series-EE bonds a few years back. More damn trouble than they were worth


for a small amount I could see that, fortunately for me we had a rather large amount, and while they were somewhat difficult to process, definitely worth my while






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Chad504boy
New Orleans Saints Fan
Five Oh Four
Member since Feb 2005
83818 posts
 Online 

re: Taxes on inheritance


u fricked
obama stacked.






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tigeryat
LSU Fan
God's Country
Member since Oct 2005
2561 posts

re: Taxes on inheritance


quote:

a good some of money


I think you mean sum.

I'm sorry, I couldn't help it.






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