Hi,
My wife's mom passed away in 2022. In 2023 she received several inheritance payouts as the estate was getting settled. These were deposited directly to our bank. Most were higher than the 2023 gift tax limit. I've read that the donor files a form 709 and pays any gift tax. In our case we are inheritors so gift taxes should not apply, plus the total inherited amount is nowhere near the 2023 estate tax trigger.
Am I correct in assuming that there should be no TurboTax entry of these deposits? And that there is no bank reporting of these deposits to the IRS that would in some way cause them to misconstrue these as gifts?
Thx,
Wayne
You are correct. Cash inheritances are not reported by the receiver of the inheritance on a federal tax return.
You are correct.
Inheritances are non-taxable income for Federal taxes. You do not report the income.
SOME states do tax inheritances.
@millgarten