DanielV01
Expert Alumni

Retirement tax questions

@frugal 2021.  While inheritances themselves are not taxable, what gets filtered through an estate or a trust can be.  And that can be complicated.  The most typical form of reporting is that the estate reconciles what will be distributed, pays applicable tax at the estate level, and then passes the income through to the recipients via Schedule K-1, which will report anything that would be taxable at the personal level.  This is speaking very generally.

 

What you describe above seems to in general fit this description:  your mother's assets are being liquidated/distributed via the trust/estate set up.  If that is so, you will receive documents from the Trust/Estate that will indicate what if anything you need to report on your personal tax return.  In your case, the individual who should be in the best position to answer all of the specifics should be the Executor, who is supposed to be (but isn't always) a neutral party.  If you are going to that source, however, and are uncomfortable with the answers you are receiving, your interests would best be served by seeking an attorney, as TurboTax cannot give any legal advice.

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