My parents passed away in 2015 and the estate has been settled and closed. I am receiving two small checks totaling < $1,000 from the PA unclaimed property dept. I have two siblings. Are the proceeds taxable for Federal and or PA?
Thank you in advance.
For Federal tax, only any increase in value between the date of death and the date you received the funds would be taxable since the inherited portion would not be taxed an a Federal rerun.
For example, if there was a savings account with a balance of 985 on the date of death and when you were paid it was worth 1,000, you would need to claim $15 interest.
The total will be included as income on your PA return if you are a resident of PA, since that state does tax inheritances.
If you are not a resident of Pennsylvania, it may be taxable on a non-resident PA return depending on the source, although the amount may be too low to require filing.
If you are using TurboTax, the program will let you know if you are required to file a state return.
As a general rule, unclaimed property is not taxable income. do you know the source of the money like from an old bank account?
For Federal tax, only any increase in value between the date of death and the date you received the funds would be taxable since the inherited portion would not be taxed an a Federal rerun.
For example, if there was a savings account with a balance of 985 on the date of death and when you were paid it was worth 1,000, you would need to claim $15 interest.
The total will be included as income on your PA return if you are a resident of PA, since that state does tax inheritances.
If you are not a resident of Pennsylvania, it may be taxable on a non-resident PA return depending on the source, although the amount may be too low to require filing.
If you are using TurboTax, the program will let you know if you are required to file a state return.