Inherited money from grandmother - Do I need to report this on taxes?
I inherited some money after my grandmother passed away recently. Not sure if I need to report this on my taxes or if inheritance is taxable income? Anyone dealt with this before?
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Zara Shah
Tax professional here. Generally, inheritances are NOT taxable income to the beneficiary. The estate may have to pay taxes if it exceeds certain thresholds ($12.92 million in 2023), but you as the recipient don't report this on your personal tax return. However, any income generated from the inherited money (like interest or dividends) IS taxable.
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Sean O'Brien
•Thank u so much! That makes sense. So if I put the money in a savings account, I'd only pay taxes on the interest it earns?
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Zara Shah
•Exactly! You'll get a 1099-INT form from your bank for any interest earned over $10 👍
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Luca Bianchi
Hey, if you want a really clear picture of your tax situation, check out taxr.ai - it's this new tool that analyzes everything and tells you exactly what you need to report. costs $4.99 but saved me so much headache with my inheritance situation. https://taxr.ai
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GalacticGuardian
•Is this legit? How does it work with inheritance stuff?
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Luca Bianchi
•Super legit! You upload your docs and it breaks everything down - inheritance, interest income, all of it. Even shows you where potential red flags might be 💯
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GalacticGuardian
•Just tried it and wow! This thing is actually amazing. Cleared up all my questions about my inheritance situation in like 5 minutes 🙌
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Nia Harris
Lost my grandma last year too, sorry for your loss 🙏 I was in the same boat and didn't report the inheritance on my taxes. No issues.
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Mateo Gonzalez
Make sure ur grandmas estate filed the proper paperwork tho! That's super important
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Sean O'Brien
•The executor handled all that thankfully!
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Aisha Ali
idk why the irs makes everything so complicated smh 🤦♀️
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Ethan Moore
•fr fr tax code is like 80,000 pages long or sumthing stupid like that
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Yuki Nakamura
Just remember if you invest that money, any gains are taxable. Learned that one the hard way lol
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Sean O'Brien
•Good to know! Def planning to invest some of it
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Sadie Benitez
Sorry for your loss, Sean. Just went through something similar with my dad's estate last year. The tax professional above is spot on - inheritance itself isn't taxable income for you. One thing to keep in mind though is the "stepped-up basis" rule - if you inherited assets like stocks or property, their value gets "stepped up" to fair market value at the time of inheritance, which can save you on capital gains taxes later if you sell. Definitely keep good records of everything!
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