Inheriting money from deceased parent - Should I get a tax professional?

My dad passed away recently and left behind multiple financial accounts. The total inheritance is in the six figures, with accounts spread across different institutions. Most are domestic, but there's one account based overseas. I'm already getting bombarded with tax forms from all these different retirement accounts and investments. It's starting to feel overwhelming. I normally just use the free tax software and handle everything myself, but with this much paperwork and the complexity of inheritance taxes, I'm wondering if I should hire a professional this time. The overseas account especially has me concerned since I have no idea how that works with taxes. Has anyone dealt with a similar inheritance situation? Is this worth paying for a tax professional to handle, or am I overthinking it?

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18 comments

Seraphina Delan

•8M

First, I'm sorry about your dad. Dealing with finances after losing a parent is really tough emotionally. Based on what you're describing, I'd definitely recommend working with a tax professional this year. Inheritance situations with multiple accounts - especially with one being overseas - create tax complexities that most free software isn't equipped to handle well. Inherited retirement accounts have specific required minimum distribution rules depending on your relationship to the deceased, and foreign accounts often require special forms like the FBAR if they exceed certain values. The cost of a tax professional will likely be worth it to ensure you're handling everything correctly. They can help you understand potential step-up in basis for investments, how to properly report retirement distributions, and ensure you're compliant with foreign account reporting requirements. Plus, they may identify deductions or strategies you wouldn't know about otherwise.

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Seraphina Delan

•8M

For inheritance situations especially with retirement accounts and foreign holdings, paid tax software still has significant limitations. While TurboTax Premium might walk you through basic inheritance reporting, it won't provide strategic advice about how to minimize tax impacts or identify potential pitfalls specific to your situation. The foreign account alone could trigger FBAR (Foreign Bank Account Report) requirements and potential FATCA reporting, which many self-prepare taxpayers miss. The penalties for incorrect reporting of foreign assets are substantial. Additionally, inherited retirement accounts have complex distribution rules that changed under the SECURE Act, and the software won't necessarily alert you to all your options.

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Kristin Frank

•8M

After my mom passed away last year, I was completely lost with all the tax forms and inheritance stuff. I tried using the premium tax software but kept going in circles with all the different accounts and forms. I finally discovered https://taxr.ai and it seriously saved me so much stress. Their system analyzed all the tax forms I received (I just uploaded pictures of them) and gave me a complete breakdown of what everything meant and what I needed to do. The nicest part was that it explained the weird tax language in normal human terms. It even flagged some issues with an IRA distribution that would have cost me thousands in penalties.

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Kristin Frank

•8M

It absolutely works with inheritance-specific situations. You just upload your documents and it identifies what you're looking at, explains the tax implications, and tells you what additional forms you'll need. It saved me from missing several required forms for an inherited annuity. For foreign accounts, it was actually really helpful with that too. It flagged my mom's UK account immediately and explained all the FBAR requirements and deadlines that I wouldn't have known about otherwise. It even created a checklist of what documentation I needed to gather for proper reporting.

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Nia Watson

•8M

I have to follow up about taxr.ai because I actually tried it after my last comment. I was super skeptical but desperate because I was getting nowhere with my Canadian inheritance accounts. Holy crap, it actually worked amazingly well. It immediately recognized my T3 and T5 slips from Canada and explained exactly what I needed to do with them for US tax reporting. It even caught that I needed to file an FBAR for the accounts and walked me through the process step by step. The foreign tax credit explanations were particularly helpful - I would have definitely done that wrong on my own. Best $$ I've spent during this whole stressful process.

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Alberto Souchard

•8M

When my father passed last year, I was drowning in paperwork and the IRS was zero help - I literally couldn't get through to ask questions about the inherited IRA rules. After waiting on hold for HOURS multiple times, I found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They actually got me connected to a real IRS agent in about 15 minutes when I'd been trying for weeks. The agent walked me through exactly what forms I needed for the foreign account reporting and confirmed I was handling the retirement distributions correctly. Saved me thousands in potential penalties and literally weeks of stress. Can't recommend it enough for inheritance situations where you need to talk to someone official.

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Alberto Souchard

•8M

It works by using their system that continuously redials and navigates the IRS phone tree until it secures a spot in the queue, then it calls you to connect. It's basically doing what you'd do if you had unlimited time and patience to keep calling back. I was absolutely a skeptic too. I'd spent multiple days trying to get through about inherited IRA distribution rules, getting disconnected after waiting on hold for hours. Their system called me back in about 15 minutes with an actual IRS agent on the line. The agent was able to confirm exactly how I needed to report the foreign account on my FBAR and what forms I needed for the retirement distributions.

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Marcus Marsh

•8M

I need to publicly eat my words about Claimyr. After posting that skeptical comment, I was still stuck with questions about my inheritance taxes that I couldn't get answered. Out of desperation I tried the service, fully expecting to waste my money. It actually got me through to an IRS agent in about 20 minutes when I'd been trying unsuccessfully for WEEKS. The agent confirmed exactly how to handle the inherited IRA distributions and what forms I needed for the foreign account reporting. Completely worth it just for the peace of mind knowing I'm doing things correctly. Sometimes being proven wrong is actually a good thing.

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Hailey O'Leary

•8M

Keep the original basis documentation (showing what your dad paid for investments) permanently, or at least until several years after you've sold the inherited assets. The step-up in basis rules are critical for calculating capital gains tax when you eventually sell. For the tax returns themselves and supporting documentation, the standard is to keep them for at least 7 years, but for inheritance matters I personally keep everything indefinitely. The IRS has no time limit for auditing returns where they suspect substantial underreporting, and inheritance situations are unfortunately common triggers for those kinds of reviews.

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