Inheritance

Forum|Forum|2 years ago
July 26, 2023
2 replies
5 views

My mother recently passed and I will be receiving inheritance. Part was beneficiary on stocks/mutual funds and I was given a step up account, so until I sell, I don't have a tax obligation. Is that correct? Also, I will be given a CD and cash from a house sale. How does that affect my taxes? Is it considered income? Is there an inheritance tax?

Ask the Experts - Retirement - July 2023

Anonymous_

Level 15

I am sorry for your loss.

Only a handful of states (Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania) impose an inheritance tax and most all of them exempt lineal descendants. Further, the estate typically handles any inheritance tax issues.

All assets belonging to your mother will be stepped up to their fair market values as of the date of her passing. If an executor/administrator is handling the estate, you may receive a K-1 (1041) for any post-death appreciation and/or income.

Ksimenson

Level 6

Hello,

First sorry for your loss!!!

I am glad you are asking about inheritance. The cash from the sale of the home would not be taxable. The CD wouldnow be in your name and you would get 1099 INT statements that would be taxable now in your name from the date it was move into your account.

As far as the stocks, the cost of those stocks will now be what they were worth on the date of her passing. If you sell the stocks at a gain, then you will pay taxes only on that gain.

When you enter the sale in Turbo Tax, answer the question, that you did not purchase the stock.

Katie S.