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Level 2
posted Jul 26, 2023 12:34:04 PM

inheritance

I did get a response, but did not understand the answer. You said in future years interest in inherited cash will be taxed. Does that mean if I receive any interest on the money I receive I will pay ttaxes on the interest only.

0 2 748
2 Replies
Employee Tax Expert
Jul 26, 2023 12:38:01 PM

Hi gander2694'

 

  Sorry that the last response did not clearly answer your question.  You are correct.  If you earn any interest, dividends or capital gains on the money that you inherit it would be considered taxable income.

 

  Hope this helps and thanks for participating in the Ask the Experts event!

 

AnthonyC_CPA

Expert Alumni
Jul 26, 2023 12:43:11 PM

Yes,  only pay taxes on interest earned. A cash inheritance, not counting retirement accounts, does not trigger a taxable event.  However earnings (only earnings) become taxable. E.G. You inherit $10,000 and earn interest of $500 on the inheritance, then only $500 is taxable.