Legal Question in Wills and Trusts in New Jersey

do I have to pay income tax
my mother left me beneficary of a policy valued at 15,000. I did not use the money as it paid her funeral expense and any other outstanding debts she had. I mailed the form to the irs a 1099 I think and didnt think anything more about it. I just got a bill for 5000 the irs says I owe them. because this amount changed my income. i thought you did not have to claim and pay tax on inherited money. especially money that was not intended for me but to settle her estate. please advise. The main question is do i have to pay the 5000? I wrote them a letter expaining and they mailed me a new tax form and said I had to fill it out again including the 15000 and they would adjust if nessessary. I really dont know what to do.

Asked on 5/19/07, 9:08 am

Glenn Brown Real World Law, P.C.

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Re: do I have to pay income tax

Generally no income tax is due on the money received from a life insurance policy.

Someone needs to see the actual paperwork to advise you properly. Something is missing from the info you provided.

Good luck to you.

Answered on 5/19/07, 7:35 pm

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