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My wife inherited $55,000 from her deceased father this year, how will it be taxed?

She received $10,000 last year from the bank that was executor of the estate, and another $10,000 when all was settled this year. Will she have to pay income tax on this money?

Jul 01, 2012 by Paul from Heeney, CO in  |  Flag
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3 votes

Most likely, no taxes are due(of course, you should always consult your tax professional). In 2011, there were no Estate Taxes due on any transferred assets under $5,000,000.

Comment   |  Flag   |  Jul 02, 2012 from Columbus, GA

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No, based on the facts you presented. Assuming that she inherited non-IRA accounts (which this sound like), then the answer is no.

FYI: If she had inherited an IRA, then she would pay taxes on any distributions she receives based on her age (under 59 1/2 would be considered an early distribution). If this were an inherited IRA, then she would need to receive a distribution based on a specific schedule tied to her age and actuarial life expectancy.

Comment   |  Flag   |  Jul 02, 2012 from Amesbury, MA

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Peter Cacioppo Level 16

Call the bank and try to talk to the person familiar with the distribution, after reading whatever was sent your wife earlier.

Comment   |  Flag   |  Sep 01, 2014 from La Jolla, CA

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Tunc Tanin Level 10

May be. If it was qualified money yes, if it was not then a portion of what she received may be taxable.

Comment   |  Flag   |  Sep 25, 2014 from Somerville, MA

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