Q:

Is an inheritance considered income by the IRS?

A:

Quick Answer

As of 2012, an inheritance is not considered income unless the amount received is greater than $5 million. The IRS states that inheritances do not have to be claimed as income, and there is no estate tax for the recipient. The estate of the deceased may be subject to both the estate tax and federal income taxes, depending on the value of the estate and the income claimed.

Continue Reading

Full Answer

The recipient of an estate inheritance of less than $5,120,000 is not liable for income, estate or gift taxes. Conversely, as of 2012, the living giver of a monetary gift of over $13,000 is responsible for paying gift taxes.

Legislature amends the value of gift and estate tax exclusions each year; it is advisable to contact the IRS directly when in receipt of large amounts of money.

Learn more about Income Tax
Sources:

Related Questions

  • Q:

    What does IRS stand for?

    A:

    IRS stands for "Internal Revenue Service." In the United States, the IRS is the federal agency that collects income taxes. "Revenue" in this instance refers to the income the government collects from taxes.

    Full Answer >
    Filed Under:
  • Q:

    What is the purpose of IRS Publication 525?

    A:

    IRS Publication 525 discusses varieties of taxable and nontaxable income such as wages, fringe benefits, bartering, partnerships, royalties, pensions, life insurance proceeds, welfare and public assistance. Employee compensation is one of the most common forms of taxable income, and normally an employer takes taxes out of an employee's net income.

    Full Answer >
    Filed Under:
  • Q:

    How do you get your refund from the IRS?

    A:

    Once tax return documentation is accepted, individuals can receive their federal refund by direct deposit or a paper check sent by mail. The government also provides the option of applying the refund towards a U.S. Series I savings bond.

    Full Answer >
    Filed Under:
  • Q:

    How do you contact the IRS?

    A:

    A person can contact the Internal Revenue Service toll-free at 800-829-1040, according to USA.gov. People using TTY devices should use 800-829-4059. The IRS mailing address is 1111 Constitution Avenue NW, Washington, D.C. 20224.

    Full Answer >
    Filed Under:

Explore