How much are you taxed on money that you inherit?

Answer by  Chaneygirl (1755)

You are not taxed on money you inherit. The estate pays the inheritance tax, depending on the value of the estate. If you have an IRA or other retirement money (non roth) that pass to you, you will pay tax on that. It will be taxed with your other income and without knowing that, its impossible to give an answer.

Answer by  Att4372 (1704)

You do not pay tax on money you inherit. The estate pays tax based on the total value of the estate. Federal tax begins on estates above $3. 5 million.

Answer by  flamiss22 (5081)

When one inherits money and if it s substantial amount there are taxes that have to be paid at tax times. The tax paid will be based on the amount that you actually get. Sometimes you are entitled to one time exemption that can reduce or eliminate the taxes altogether.

Answer by  cgroverla (516)

There is no federal income tax on property that is inherited, as long as that property would not be taxed to the donor. For example, if you inherit your parent's home, that is tax-free to you. But if you inherit your parent's traditional IRA, that is taxed to you because it would have been taxed to your parent.