Will I need to include an inheritance that I received in tax year 2024 as income when I am filing my tax return

[DoninGA]

A cash inheritance is not reported on a federal tax return.  What type of inheritance did you receive?

[LarryDonMcMillin]

which forms do I use to report my inheritance, there was no cost in acquiring my inheritance

[LarryDonMcMillin]

property / land

[LarryDonMcMillin]

I recieved cash for sale of property

[LarryDonMcMillin]

my proceeds came from the property sale

[LarryDonMcMillin]

thanks for your time......any profit from the sale of an inheritance has to be reported, the inherited property in itself is not subject to income taxes, and will not be as long as the beneficiary does not sale the inherited land.  maybe I will send intuit my resume"

[MayaD]

Inheritances aren't considered income for federal tax purposes, however any gains when you sell inherited investments or property are generally taxable, but you can usually also claim losses on these sales.

In TurboTax you would  report it as investment sale.

1. Since you did not receive a 1099-B, answer “no” to the 1099-B question or select skip Import 
2. Select Other for What type of investment did you sell?
3. Select I inherited for How did you receive this investment? 

The basis of property inherited from a decedent is generally one of the following:

• The fair market value (FMV) of the property on the date of the decedent's death (whether or not the executor of the estate files an estate tax return (Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return)).
• The FMV of the property on the alternate valuation date, but only if the executor of the estate files an estate tax return (Form 706) and elects to use the alternate valuation on that return. See the Instructions for Form 706.You can deduct the selling expenses from the gross proceed.

 Sales expenses include:

• commissions
• appraisal fees
• broker's fees
• legal fees
• advertising fees
• home inspection reports
• title insurance
• transfer taxes or fees
• geological surveys
• loan charges (points) or other fees paid on the buyer's behalf
• any fees for a service that helped you sell your home without a broker (listing fees, promotional fliers, etc.)

[kipsterSC]

My mother passed away in 2024, and I inherited some money.  I received a Form 1099-R from the bank where I deposited those funds, and Box 2a is blank.  When filling-out the appropriate info on my tax form, my taxes went up; I thought that inherited funds are considered non-taxable.

[KrisD15]

To clarify, is the 1099-R reporting your distribution? What code is in Box 7? Did the account have earnings after the date of her passing? 

[kipsterSC]

Form 1099 has the code "4" in box 7.  Yes, the account earned interest after her passing, which I reported via form 1099-INT.

[KrisD15]

When you entered the 1099-R, with Code 4 in Box 7, TurboTax would know that this was an inherited IRA. 

The questions that follow ask about the Required Minimum Distribution for both you and your mother, as well as what you did with the remaining funds. 

Inherited IRA accounts are not taxed when received, however distributions can be. 

New rules are going into affect for IRA non-spouse inheritances. The account was to be depleted within 10 years, however now the beneficiary needs to make Required Minimum Distributions of their own each of those ten years as well as depleting it. 

This new regulation is being waived for tax year 2024, but you must make the RMD withdrawals starting 2025. 

In TurboTax, enter the 1099-R and continue through the interview. 

If you report that part of the distribution was your mother's RMD, that portion will be taxable. 

If you rolled over the complete balance, select No for her RMD and also for yours. 

Select "I rolled it over" for "What did you do with the money" 

The rolled-over balance will not be taxed. 

For Tax Year 2025 and beyond, you must make your own Required Minimum Distribution yearly until this account is depleted within 10 years of your mother's passing. 

We are sorry to hear of your loss. 

IRS link

[Arcia 27]

Will I need to include money that I received as inheritance in 2004 as income?

[Arcia 27]

A property was sold, and the proceeds were distributed in cash to the beneficiaries as per a will and state law.

[DoninGA]

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@Arcia 27 wrote:

A property was sold, and the proceeds were distributed in cash to the beneficiaries as per a will and state law.

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A cash inheritance is not reported on a tax return.