Sorry for this, I live in colorado and my mom passed away in MA She left a will and I hired an attorney in MA the will was filed in probate court. My mom had a reverse mortgage on her home. After all bills and her reverse mortgage gets paid along with what she had in her will to go the following people. Whatever the remaining that will be left is to be split evenly between myself and two brothers. Am I required to put this in my tax returns next year and will I have to pay taxex on this. I am retired.
Sorry to hear about the passing of your mother....I hope she had a long and happy life.
Here is a good article for you to review.
Re the inhertance you received, the federal government (IRS) doesn't have an inheritance tax, and neither MA or CO have a state inheritance tax. So you are good there.
When you’re an heir receiving a piece of property you inherited, the IRS may qualify the property for a “step-up in basis” when it comes to tax liability. When you inherit property, you generally receive an initial basis in property equal to the property's FMV. The FMV is established on the date of death or on an alternate evaluation date six months after death. The step-up in basis means that the IRS will use the property’s fair market value as of the date of the Trustor’s death instead of the original purchase price when calculating capital gains when the inherited property is sold.
So, if you sold the assets at the price when she died (or within 6 months of that date), you will not have tax liability.
I hope this helps you.
Good luck,
Kelly C, CPA
Hi there
Condolences on your mother. It appears as if your mother's estate is being completely liquidated with the beneficiary's receiving a cash inheritance. If so inheriting cash in itself does not trigger a taxable event to the beneficiary. However, in future years, earnings on inherited cash such as interest and dividends will become taxable to the beneficiary.
Sorry to hear about the passing of your mother....I hope she had a long and happy life.
Here is a good article for you to review.
Re the inhertance you received, the federal government (IRS) doesn't have an inheritance tax, and neither MA or CO have a state inheritance tax. So you are good there.
When you’re an heir receiving a piece of property you inherited, the IRS may qualify the property for a “step-up in basis” when it comes to tax liability. When you inherit property, you generally receive an initial basis in property equal to the property's FMV. The FMV is established on the date of death or on an alternate evaluation date six months after death. The step-up in basis means that the IRS will use the property’s fair market value as of the date of the Trustor’s death instead of the original purchase price when calculating capital gains when the inherited property is sold.
So, if you sold the assets at the price when she died (or within 6 months of that date), you will not have tax liability.
I hope this helps you.
Good luck,
Kelly C, CPA