Should inherited real property be reported on your tax return?

[giantoctopus-ver]

is it required to report a real property inheritence

[Anonymous_]

An inheritance is not typically a taxable event.

However, if the property is income-producing (such as rental real estate) or you have sold the property, then you would need to report either of those scenarios on your tax return.

[LindaS5247]

Inheriting real property should not affect your federal taxes.

For federal income tax purposes, inheritances are not considered income, even if it is cash, investments or property.

However, any subsequent earnings on the inherited assets are taxable, unless they come from a tax-free source.

As of 2023, there are six states that still have an inheritance tax in place:

• Iowa
• Kentucky
• Maryland
• Nebraska
• New Jersey 
• Pennsylvania

In states with an inheritance tax, the amount being distributed to inheritors will typically have to reach a certain threshold for the inheritance tax to apply. 

Click here for more information on inheritances.

Click here for information about inheritance taxes.

Click here for information on contacting your state's Department of Revenue.

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