If you inherit an annuity, the same portion of each payment will be taxable or tax-free as was true for the original owner. If you inherit savings bonds, for example, you'll owe tax on all interest that accrued during the life of the previous owner. other tax-favored retirement plan accounts such as 401(k) accounts.This rule often comes into play for assets that have what's called "income in respect of a decedent."Ĭommon examples of assets of this type are: Some other assets come with a tax string attached-you're taxed on part or all of the value, just like the original owner would have been if they had lived. Is that correct?Ĭash, stock and real estate are not taxed as income when you inherit them, but you could have taxable gains when you sell the stock or real estate-depending on the circumstances. I heard that all inheritances are tax-free.
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