Tax on inheritance
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.
Q: Hello, can you tell me, do you have to pay taxes on inheritance? If so, do you know the percentage at which it is taxed?
A: Generally inheritances are not taxable to the recipient since the grantor's estate already paid any applicable taxes. The most notable exception is that if the money came from a qualified retirement plan, it is still considered taxable income to the beneficiary. You should have a tax professional take a look at the transactions to be certain. If you do not have a regular tax adviser, this OnlineAdviser service is available for a single hour review and consultation to address these tax concerns at minimal cost. Even if the inheritance is not taxed, it is possible that the inheritance might be put to use to reduce your own taxes and further improve your financial situation.
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