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foutsone
New Member

I just received income from an inheritance and land that was sold. Do I have to send in extra money before the end of the year ?

I am retired and my regular income will not cover the tax
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3 Replies
pk
Level 15
Level 15

I just received income from an inheritance and land that was sold. Do I have to send in extra money before the end of the year ?

@foutsone   generally there is no tax on inheritance.  But the whole thing depends on actual facts and circumstances.     For an answer specific to your own circumstances, you need to tell us more about the situation, please.

 

I will circle back once I hear from you --yes?

 

 

I just received income from an inheritance and land that was sold. Do I have to send in extra money before the end of the year ?

It's not clear what is actually taxable.

 

Cash money that you inherit is not taxable.  If you inherit property, like stocks, land, or other investments, you don't pay tax at the time of the previous owners death.  Instead, you receive a stepped-up cost basis, and then owe capital gain tax when you sell the property or investment--you aren't taxed on the proceeds, only the gain.  And if you sell land you own, you again owe capital gains tax on the gain, not the entire proceeds.

 

Then, if you have a lump sum of income during the 4th quarter of the year (Sept 1-Dec 31), you owe a payment of estimated taxes by January 15, 2025.  You can make the payment at www.irs.gov/payments, be sure to select "2024 estimated taxes" as the reason.

 

Also be aware, that you may still owe a penalty for not paying enough during the year, due to how the law treats estimated payments and withholding.  To avoid this, you should include form 2210 with your tax return, and complete schedule AI (the annualized income method of computing the penalty).  This form shows the IRS that your income was "lumpy", not spread out over the year, and your payments were correct for the amount of income in each quarter. 

I just received income from an inheritance and land that was sold. Do I have to send in extra money before the end of the year ?

it is unclear whether you simply got a distribution from the estate and it will pay the income taxes on its income making what you got tax free or that the estate will issue a k-1 to the beneficiaries requiring them (including you) to report the income and pay the taxes.

only the trustee can answer this question. 

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